U.S. premium subscribers expected to reach 46 million by 2025
YouTube this month hit $3 billion in lifetime consumer spending globally, right behind Tinder and Netflix.
It’s a signal that YouTube’s memberships, creator rewards and subscriptions for ad-free viewing and music are on the rise. The lifetime spend from 2010 to 2021 retrieved from data firm App Annie includes just iOS revenue, so total spending with Google Play included would surpass $3 billion.
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“Driven by various paid membership channels and premium subscriptions, the milestone highlights the value of the YouTube experience and the willingness of consumers to pay a premium for more enhanced features,” Lexi Sydow, head of insights at App Annie, told TheWrap. “As the platform that democratized both content creation and consumption, YouTube also cultivates some of the most time spent per user globally.”
In the last year, YouTube’s consumer spend rose to $1.19 billion from July 2020 to June 2021, according to App Annie. Overall, consumer spend has been growing on both iOS and Android throughout 2021. Spending grew 40% year-over-year to $21 billion on iOS and $11 billion on Google Play.
This September, YouTube said it passed 50 million subscribers across its music and premium services when counting free trial signups. This is up from 30 million in Q3 2020 and 20 million in Q4 2019, according to analytics firm Ampere Analysis. eMarketer also projects premium subscribers to continue growing in the U.S. to some 46 million by 2025.
A YouTube rep declined to comment.
“While YouTube has not given much color on where these subscribers are based, or whether they are using the services for video or music, this certainly shows a willingness for consumers to pay for a premium YouTube service,” said Toby Holleran, research manager at Ampere Analysis. “With the price at $11.99 per month in the U.S. … if just half of its subscribers are in these higher (revenue) markets, the company could easily exceed $3 billion in annual revenue with 50 million subscriptions.”
App purchases on YouTube include the premium service to remove ads, channel memberships to support individual creators, and various rewards including Super Chats and Super Stickers used to support creators in a livestream. The most popular content categories are comedy, music, entertainment and “how to” videos, according to YouTube.
The increases in spending are also likely boosted by the investments YouTube has made to attract content creators in recent years. In August, YouTube said it has paid $30 billion to creators over the last three years. Facebook, Snap and TikTok have rolled out similar creator funds recently.
It’s also worth noting that the YouTube app was ranked No. 1 for all live streaming apps by consumer spend, with iOS and Google Play revenue combined. During the pandemic, more users directly created videos and engaged on livestream with followers on their mobile devices.
“YouTube’s platform embraces trends and features that became increasingly popular during the pandemic including live streaming, cross-topic exploration and community engagement,” Sydow said.
YouTube launched its livestream feature back in 2011, but Google spokesperson Mariana De Felice said live videos really accelerated during the pandemic as events and gatherings were put on hold. More than half a million channels did a livestream on the platform for the first time in 2020 — and the total livestreams surged by 45% in just the first half of 2021, according to the company.
Research firm Omdia has been tracking similar increases in consumer activity on YouTube. Based on its report last quarter, YouTube was the top video service in the U.S. — more watched than Netflix and Amazon Prime — across eight countries. And the cord-cutting trend has only benefited services like YouTube.
“YouTube gets forgotten when it comes to video consumption and entertainment. It is becoming that gap to fill for people, especially for the younger demographic,” Sarah Henschel, media analyst at Omdia, previously told TheWrap.
Not to mention, the company’s earnings have been beating Wall Street expectations across the board. In Q2, the video service, which generates a sizable income from ads, saw ad revenue jump to more than $7 billion from $3.8 billion the previous year. And its parent company Alphabet is seeing soaring income with a record revenue of $61.9 billion and profits of $18.5 billion in the second quarter.