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YouTube and Google Subscription Services Hit $15 Billion in 2023 Revenue

Alphabet’s suite of digital subscription services — including YouTube Premium, YouTube Music, YouTube TV and Google One cloud storage — generated $15 billion in revenue for 2023, according to CEO Sundar Pichai.

The $15 billion revenue figure from subscriptions is up fivefold since 2019, Pichai told analysts on Alphabet’s Q4 2023 earnings call. The company did not provide a breakdown of revenue by service, nor did it update the number of subscribers it has.

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“YouTube is the key driver of our subscription revenues,” Pichai said. “YouTube Music and Premium have real momentum. They are engaging passionate users and driving great returns for the music industry and creators.”

YouTube TV “also is doing well,” he said. Pichai said that NFL Sunday Ticket, the out-of-market games package which became exclusively available in the U.S. on YouTube for the 2023 season, “has found its perfect home on YouTube.” Google is reportedly paying the NFL as much as $2.5 billion per year over the course of the seven-year Sunday Ticket pact, and it’s possible the internet giant views it as a loss leader.

“NFL Sunday Ticket supports our long-term strategy and really helps solidify YouTube’s position as a must-have app on everyone’s TV set,” Philipp Schindler, chief business officer of Google, said on the earnings call. He said the company was “pleased” with sign-ups for the football package on both YouTube TV and standalone YouTube but he didn’t provide a number for Sunday Ticket customers in the year-one season. Schindler added that the company is looking “closely” at the possibility of expanding Sunday Ticket to markets outside the U.S.

In November 2022, the company said YouTube Music and YouTube Premium topped 80 million paying subscribers combined. As of June 2022, it said YouTube TV had more than 5 million customers (including those on free promo trials).

On average, each YouTube Premium subscriber boosts earnings for content creators, music and media partners, and YouTube itself, Schindler said.

For Q4, Alphabet’s cost of revenues (excluding traffic acquisition costs) was $23.6 billion, up 5%, with the increase primarily driven by content-acquisition costs associated with YouTube subscription offerings, according to Ruth Porat, president and chief investment officer of Alphabet and Google (previously CFO).

For Q4, YouTube’s ad revenue was $9.20 billion, up 15.5% year over year and in line with Wall Street expectations; that does not include subscription revenue. Overall, Alphabet beat expectations with revenue of $86.31 billion (up 13.5%) and earnings per share of $1.64.

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