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YouTube continues to see ad revenue decline, 2.6% drop YOY

Alphabet reported Tuesday its latest earnings, citing that YouTube saw ad revenue fall 2.6% year over year as advertisers pulled back from the platform due to economic uncertainty. YouTube only raked in $6.69 billion in advertising revenue for the first fiscal quarter of 2023 compared to the $6.87 billion during the same period last year.
Despite the disappointing number, YouTube managed to slightly beat analysts’ expectations of $6.6 billion.
This is the third quarter in a row that YouTube’s ad revenue decreased. The downward sliding figures are a cause of concern for content creators, who look to ad revenue to earn income.
The company attempted to offer reassurance during Tuesday’s earnings call, choosing to focus on its success with the short-form video feature Shorts.
“Last year the number of channels that uploaded to Shorts daily grew over 80%. Those posting weekly on Shorts saw the majority of new channel subscribers coming from their Shorts posts,” Sundar Pichai, CEO of Google and Alphabet said.
As the platform experiences intense competition from rivals like TikTok, the company continues to focus on the Shorts to boost its growth. In November 2022, YouTube rolled out Shorts to smart TVs. Google announced in February that Shorts has reached 50 billion daily views.
“We’re seeing strong watch time, growth… monetization is also progressing nicely. People are engaging and converting on ads across Shorts at increasing rates,” added Philipp Schindler, Google’s chief business officer.
YouTube also reiterated plans to ramp up its efforts to make YouTube more shoppable. The company partnered with Shopify last year to enable YouTubers and merchants to feature products on their channels.
“Shopping on YouTube… It’s still super early days. One highlight last year, we brought shopping to more creators and brands by partnering with commerce platforms like Shopify. Now more than 100,000 creators, artists and brands have connected their own stores to their YouTube channels to sell their products. We’re excited about the potential ahead,” Schindler said.
The company confirmed to TechCrunch in November that it plans to add shopping features to Shorts.
Overall, parent company Alphabet reported $69.8 billion in revenue for the first quarter of 2023, a 3% increase from the same year-ago period.
YouTube CEO Susan Wojcicki stepped down from her role in February, taking on an advisory role across Google and Alphabet. Neal Mohan, chief product officer, is the new CEO.
In January, Alphabet cut 6% of its workforce, which affected 12,000 employees.

YouTube Shorts begins testing shopping features and affiliate marketing

YouTube continues to see ad revenue decline, 2.6% drop YOY by Lauren Forristal originally published on TechCrunch
YouTube continues to see ad revenue decline, 2.6% drop YOY

YouTube relaxes controversial profanity and monetization rules following creator backlash

YouTube announced today that it’s relaxing the controversial profanity rules that it introduced toward the end of last year. The company says the new rules ended up creating a “stricter approach” than it had intended. The new update to the policy allows creators to use moderate and strong profanity without risking demonetization.
The original policy that was introduced back in November would flag any video that used profanity in the first 15 seconds of the video and make it ineligible for monetization, which meant that YouTube wouldn’t run ads on such videos. The change was retroactive and some creators said they had lost their monetization status as a result.
YouTube said back in January that it planned to modify the new rules.
Although the new relaxed rules don’t revert these changes back to the platform’s old policy, YouTube is making some changes that will allow creators to be eligible for limited ads if they use strong profanity within the first few seconds of a video. Under the November update, such videos would have received no ad revenue. The company also notes that video content using profanity, moderate or strong, after the first 7 seconds will be eligible for monetization, unless used repetitively throughout the majority of the video. Once again, such videos would have received no ad revenue under the November update.
YouTube said that it will re-review videos from creators who had their monetization affected by the November policy.
The company also clarified how profanity in music is treated, and noted that moderate or strong profanity used in background music, backing tracks, intro/outro music can now earn full ad revenue. Previously, such content would have received no ad revenue. In addition, the use of any profanity in titles and thumbnails will still be demonetized and cannot run ads, as was the case before the update in November.
The new policy goes into effect starting today. It’s worth noting that although the new policy doesn’t address all of the concerns that creators had and is still somewhat vague, it should make it easier for a big chunk of creators to continue monetizing their videos without having to make major changes.
It’s clear that YouTube is trying to make its massive trove of videos more age appropriate and advertiser friendly, but retrofitting new monetization rules onto a platform like YouTube is a delicate balance, as the past few months have shown.

YouTube plans to modify profanity rules that prompted creator backlash

YouTube relaxes controversial profanity and monetization rules following creator backlash by Aisha Malik originally published on TechCrunch
YouTube relaxes controversial profanity and monetization rules following creator backlash

Roku soars past revenue expectations as it bets on streaming devices to boost growth

Over a month after Roku announced its first Roku-branded TVs, which will launch in the U.S. in spring 2023, the hardware company reported its quarterly earnings this afternoon, which showed Roku beat its own revenue expectations, reporting a total net revenue of $867.1 million for Q4.
The company previously cautioned investors of a shaky fourth quarter, predicting total revenue at around $800 million, a 7.5% decrease year over year. In Q3, Roku had total revenue of $761 million. Analysts predicted a year-over-year decline of 7% to $804.19 million.
However, the company’s Q1 2023 guidance is still cautious of the current macroenvironment. Roku predicts a total net revenue of $700 million.
Also, Roku recently announced that it surpassed 70 million active accounts globally in 2022, an impressive milestone for the company. It had 65.4 million active accounts in Q3. For comparison, rival Tubi, Fox’s free ad-supported streaming TV service, revealed yesterday that it reached 64 million monthly active users.
Plus, Roku had a 19% year-over-year increase in global streaming hours, with a total of 87.4 billion streaming hours in 2022 and 23.9 billion for the fourth quarter.
Despite the growth in accounts, Roku continued to see operating losses widen to $249.9 million, compared to a loss of $147 million in the prior quarter. Due to the economic challenges, Roku wrote in an SEC filing in November that it planned to cut 200 jobs in the U.S. between Q4 2022 and Q1 2023.
“We plan to continue to improve our operating expense profile to better manage through the challenging macro environment while building on our platform’s monetization and engagement tools and partnerships,” the company wrote in its letter to shareholders. “Through a combination of operating expense control and revenue growth, we are committed to a path that delivers positive adjusted EBITDA for full year 2024. Our platform and industry leadership positions us well for reaccelerated revenue growth as the ad market recovers and the shift to TV streaming continues.”
The company added that Roku’s operating system (OS), which will power the forthcoming Roku-branded TVs, grew to 38% of units sold in the U.S. Q4 2022, per NPD. This means Roku OS continues to be among the top-selling smart TV OS in the U.S. The new Roku-branded TVs, announced last month, were another significant move for the company.
Roku recently closed a few deals with major companies to boost its streaming business. For instance, the company closed a deal with Warner Bros. Discovery, getting 2,000 hours of movies and TV shows, including HBO’s “Westworld,” “The Bachelor,” “Cake Boss” and “Say Yes to the Dress,” among others.
Earlier this week, the company struck an exclusive programming deal with Pocket.watch, a kids and family entertainment studio, to bring more children’s content to the Roku Channel.
Also, Roku partnered with DoorDash earlier this month to give customers a free six-month subscription to DashPass and launched interactive shoppable ads for DoorDash businesses on Roku devices.

Roku ends 2022 with new milestone, tops 70M active accounts

Roku unveils its first-ever TVs designed and built by the company

 
Roku soars past revenue expectations as it bets on streaming devices to boost growth by Lauren Forristal originally published on TechCrunch
Roku soars past revenue expectations as it bets on streaming devices to boost growth

Tubi reaches 64M monthly active users as ad-supported streaming grows

Fox’s free ad-supported streaming TV (FAST) service, Tubi, reached 64 million monthly active users, the company announced today. The last time the company reported its subscriber base was in May 2022, when Tubi had 51 million. When Fox purchased the streaming service in 2020, Tubi then had 25 million monthly active users.
Fox recently reported quarterly earnings, which showed significant viewership growth at Tubi. Its total viewing time was up 44% year over year, with over 5 billion hours streamed in 2022. It’s likely Tubi viewership will increase even more since the streamer struck a deal with Warner Bros. Discovery, gaining more than 2,000 hours of WB-branded content.
Tubi claims to have the largest free streaming content catalog, with over 50,000 titles and more than 200 live TV channels.

Tubi reports record growth, expands original content and linear channel offerings

The latest monthly active user figure was reported alongside Fox’s annual research report, “The Stream: 2023 Actionable Insights for Brands,” which shows an increased interest in cheaper ad-supported plans. The company predicted that by 2024, one in three U.S. consumers would stream AVOD (ad-supported video-on-demand). This is likely due to subscription video-on-demand (SVOD) services hiking up their prices. Netflix and Disney+ were the most recent SVOD streamers to launch ad tiers.
Fox predicts that AVOD growth will increase by 9% in 2023 and 24% between 2022 and 2026 in total. Meanwhile, SVOD growth will remain “relatively flat,” the company wrote.
“As subscription costs continue to rise, nearly one in three streamers plan to reduce spending on streaming services this year,” said Mark Rotblat, chief revenue officer at Tubi, in a statement.
The report also stated that, within the past year, Tubi content was watched by one in five AVOD subscribers.
It’s pretty easy to see why AVOD services — especially free services — are becoming more and more favorable as they are closer in proximity to the cable experience, without the long-term contracts or hefty fees. Sixty-three percent of survey respondents said that free AVOD services are attractive because they typically offer more flexibility than cable and satellite TV and provide a more customized viewing experience.
Also, 45% of respondents said that they value streaming services with fewer ads. Tubi has arguably one of the lightest ad loads across AVOD services, citing between four and six minutes of ads per hour. However, the report found that less than one in five customers are still unsatisfied with the length of ad breaks on Tubi, but still prefer lighter ad loads compared to traditional TV, which has about nine or ten minutes.
For comparison, Peacock keeps the ad load around five minutes per hour. Disney+, Netflix and HBO Max aim for about four minutes.

Fox-owned Tubi expands its free streaming service to five Latin American countries

Tubi reaches 64M monthly active users as ad-supported streaming grows by Lauren Forristal originally published on TechCrunch
Tubi reaches 64M monthly active users as ad-supported streaming grows