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YouTube logs another quarter with declining ad revenue

The streaming platform's ad revenue was down 15 percent compared to the previous quarter.

The streaming platform's ad revenue was down 15 percent compared to the previous quarter.

YouTube’s streaming TV marketplace YouTube Premium Channels. (Image courtesy YouTube/Alphabet, Graphic edited by The Desk)

YouTube experienced another financial quarter with weak advertising revenue, its parent company Alphabet revealed on Tuesday, with the company posting a quarterly and year-over-year decline.

In the three-month quarter that ended March 31, 2023, YouTube pulled in $6.693 billion in revenue, a 15 percent drop from the $7.963 billion reported at the end of December 2022 and a year-over-year decline of 2.6 percent.

YouTube’s advertising revenue woes are part of a broader trend in which companies have pulled back on their marketing budgets due to economic uncertainty, including a potential recession.

The ad revenue segment attributed to YouTube includes pre-roll and in-content video ads that appear on most videos published through YouTube, as well as some ad inventory on broadcast and cable channels distributed through its cable-like streaming service YouTube TV.

Alphabet doesn’t break out how much revenue YouTube TV earns separate from YouTube. The company recently announced it was raising the base subscription price of YouTube TV by 12 percent, with customers now paying $73 a month for entertainment, cable news and live sports offered by partners like the Walt Disney Company (ABC, Disney, FX, ESPN), Fox Corporation (Fox News, Fox Sports 1), Comcast’s NBC Universal (NBC, MSNBC, Bravo, E!), Warner Bros Discovery, Paramount Global (CBS, Comedy Central, MTV), AMC Networks and others. YouTube TV last reported around 5 million customers who are paying for the service or using it as part of a free trial.

In February, YouTube CEO Susan Wojcicki resigned after spending more than nine years in the role and much of her career at Google, the company that acquired YouTube in 2006. Neal Mohan, YouTube’s chief product officer, was promoted to CEO as part of the transition.

While YouTube still commands a decent share of the online video space, its position as the leader in streaming video has started to erode as younger consumers gravitate toward apps like TikTok and features like Instagram Reels.

YouTube has tried to compete against TikTok, Instagram and others by introducing YouTube Shorts and compelling some of its online creators to make content specific to that feature. Some creators now receive a payment when their short-form videos generate revenue for YouTube. Around 50 billion views are logged on YouTube Shorts content each day, the company said.

On Tuesday, Alphabet Chief Financial Officer Ruth Porat said YouTube’s advertising business showed “signs of stabilization,” with Alphabet CEO Sundar Pichai looking to the future of the product.

Specifically, Alphabet executives are excited about the upcoming National Football League season, when YouTube and YouTube TV will become the exclusive provider of the NFL Sunday Ticket. The package, which offers Sunday afternoon out-of-market games aired on CBS and Fox stations, was previously exclusive to satellite broadcaster DirecTV; its migration to YouTube and YouTube TV marks the first time the package will be offered to consumers exclusively through a streaming service.

NFL Sunday Ticket costs $350 per season when purchased as part of a YouTube TV subscription, or $450 per season when purchased through the YouTube app’s PrimeTime Channels marketplace. YouTube TV and YouTube PrimeTime Channels also offer a version of the package that includes NFL RedZone for $40 more, and both services are knocking $100 off the price of NFL Sunday Ticket if customers pre-order it before June 6.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).