YouTube reported Q4 advertising revenue of $10.5 billion, up from $9.2 billion a year ago, after posting $8.9 billion in Q3. A Nielsen Gauge report shows that YouTube now makes up over 11% of all TV viewing, a figure that has raised questions about the platform’s growing influence in the streaming market.
Philipp Schindler, Google’s Chief Business Officer, said, “YouTube advertising revenues was driven by strong spend on US election advertising with combined spend from both parties almost doubling from what we saw in the 2020 elections.” Also added, “Creators are now prioritizing high quality viewing experiences that truly shine on TV screens, inspiring even more viewers to tune in. In fact, the number of creators making majority of revenue from TV is up over 30% year on year.” He added that investments in podcasts are changing the game for creators, with shows like Club Shay Shay and Lex Fridman moving toward video formats. He further stated, “YouTube is now the most popular service for podcasts listening in the U.S.” after noting that in 2024, people watched over 400 million hours of podcasts on living room devices each month.
Additionally, Google’s subscriptions, platforms, and devices business which includes YouTube TV, NFL Sunday Ticket, and YouTube Premium generated $11.6 billion, up from $10.8 billion last year. At the same time, Alphabet reported total revenues of $96.5 billion and a net income of $26.5 billion.
Sundar Pichai, CEO at Google said, “Q4 was a strong quarter driven by our leadership in AI and momentum across the business. We are building, testing, and launching products and models faster than ever, and making significant progress in compute and driving efficiencies. In Search, advances like AI Overviews and Circle to Search are increasing user engagement. Our AI-powered Google Cloud portfolio is seeing stronger customer demand, and YouTube continues to be the leader in streaming watchtime and podcasts. Together, Cloud and YouTube exited 2024 at an annual revenue run rate of $110 billion. Our results show the power of our differentiated full-stack approach to AI innovation and the continued strength of our core businesses. We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025.”
While these figures are impressive, the heavy reliance on political advertising and the plan to spend $75 billion on capital expenditures in 2025 have drawn scrutiny. Critics argue that such large investments, combined with a shift toward TV-quality content and a focus on politically driven revenue, may challenge the long-term stability of the business model.