How Does YouTube Earn Money? YouTube Business Model

334 Comments / BUSINESS MODEL / By lakhan gupta

In this blog, I will tell you in detail How does YouTube earn money?The online video sharing platform originates from America and was created way back in 2005.

YouTube was invented by Chad Hurley, Steve Chen, and Javed Karim in February 2005 who were all early employees of PayPal.

YouTube is the world’s second-largest search engine and second-highest visited site after Google.

It was in the year 2006 that Google bought the site and converted it into one of its subsidiary services. The coverage of this video sharing portal is spread wide across the world excluding some regions. YouTube’s interface is available in 76 languages. YouTube presently holds 2 billion active users on a monthly count with over a billion hours of video watch time.

The platform has launched in over 91 countries.

500 hours of video are uploaded to this site every minute.

720,000 Hours of Video Uploaded Daily.

70% of YouTube views come from mobile devices.

The Second Most Popular Social Media Platform.

Every day people watch one billion hours of videos on YouTube.

How does YouTube earn money? The revenue model of YouTube

The business model of YouTube can be divided into 7 categories. Primarily all the content that is there on this portal is for free. Google uses its statistical analysis on user activities and hence makes money through targeted advertisements. So, the product that YouTube majorly sells is its users this is how does youtube earn money.

The second side of their business model is subscription-based earning & Premium features on the portal. At a nominal amount, users can sign up for some really handy and advanced features. Here’s a more elaborate look at YouTube’s business model with its 7 revenue model of YouTube.

1. Sponsored Advertisements

SERP Advertising or Sponsored Ads are videos that pay YouTube for increased visibility and traffic. Every time a viewer clicks that particular ad video, YouTube gets its share of the money.

2. Embedded Advertisements

If you have any viewing experience on YouTube, a vast majority of would have noticed those pre and mid-video advertisements which may or may not come with a skip ad button. Those are embedded advertisements and YouTube gets an income out of these based on the number of views every ad gets.

3. Landing Page Advertisements

If you scroll the homepage of YouTube, you would have noticed a big banner ad right at the top of the page. These advertisements are called landing page ads and they are videos plus pictures in the form of a banner usually exhibiting big brands and latest launches.

4. YouTube Premium Subscription

YouTube has created its premium subscription program which allows users to avail of added benefits for a very nominal cost. YouTube Premium is all about perfecting the vices that any viewer would dislike. Adding to its usability this subscription is applicable to all YouTube services including YouTube Music and also YouTube gaming.

Following are the added benefits that a YouTube premium Subscriber gets:

Videos without Ads
YouTube Music Access
Access to Premium Content on YouTube
Offline songs and Video
Active background play with screen off feature

Subscription cost for YouTube Premium is $11.99/month in the USA

5. Channel Membership Fee

It is not just an advertisement with which YouTube makes its money. A proportion of its income comes via the channel memberships feature which is a kind of sponsorship program for viewers. YouTube publishers can involve their subscribers by asking them for paid channel membership which lets them make much more money apart from just embedded ads. Content publishers on YouTube can integrate a join button and use it to offer special merchandise and perks to its viewers and subscribers at a nominal cost of $4.99 every month. YouTube earns thirty percent on this sponsorship fee paid by each subscriber.

6. YouTube TV

YouTube has launched an exclusive television streaming service only in the US by the name of YouTube TV. Subscribers can sign up by paying $49.99/month and stream channels like NBS, FOX, ABC, ESPN, Disney & more directly on YouTube. This TV streaming service is giving its competitors a run for their money because of its quality and cost-effectiveness.

7. Affiliate Earning

Ecommerce companies link their product advertisements to related videos for affiliate promotions. Products bought from the YouTube source are on commission and hence, the video portal gets a fair share for every successful sale.

So this is the complete business model and revenue model of youtube.

Thanks for reading this blog.

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