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YouTube is by far one of Google’s most successful products with billions of monthly users and trillions of hours of entertainment, information, and knowledge. As such, it’s not surprising that YouTube has continuously grown in revenue ever since it launched, but recently for the first time in history, it seems that YouTube is experiencing a decline in ad revenue. For 3 consecutive quarters between 2022 and 2023, YouTube ad revenue has declined as advertisers pulled back due to recession and high inflation fears. This has raised the question of whether this is just a temporary pullback or if we have simply reached peak YouTube. This question becomes harder to answer because YouTube’s ad revenue is also being hurt by an X factor: shorts. It’s no secret that shorts are far less profitable than long-form video, so by pushing people to watch shorts, YouTube is unintentionally cannibalizing their own revenue. This video explores some reasons why YouTube’s ad revenue may be declining and what this could mean for the future of YouTube.
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Timestamps:
0:00 - YouTube’s Revenue
2:13 - The Great Chasm
6:55 - The Solution?
10:39 - The Great Pivot
Thumbnail Credit:
Mateusz Wlodarczyk/NurPhoto
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