YouTube launched its first paid streaming service, YouTube Red, in 2014 in order to offset income losses caused by adblocking. However, it took more than six years after rebranding as YouTube Premium for the site to begin producing consistent and sustainable revenue from its Premium users.
According to figures provided by the HelpCenter app, YouTube Premium subscriptions in the United States are expected to surpass 23.6 million unique users by the end of 2021, with income reaching $282.96 million in the US alone. With a monthly membership price of $11.99 for YouTube Premium, this marks an outstanding +18 percent year-over-year growth (YoY).
Additionally, Premium subscriptions are expected to hit 25 million unique users and $300 million in revenue by the end of next year. By 2024, the sum will reach $334.52 million, with roughly 28 million sign-ups. Revenues are predicted to continue growing steadily after 2023. eMarketer provides data on unique subscribers.
The primary reasons for video streaming’s growing popularity
Along with encouraging development in the United States, YouTube Premium has surpassed 50 million subscribers globally since the beginning of September, surpassing a significant milestone.
YouTube Premium, which costs $11.99 a month, is an all-encompassing video and music service that includes ad-free videos, audio videos (music continues to play even when the app is dismissed), YouTube TV, and the ability to download videos. Additionally, it includes YouTube Music, which would normally require a separate subscription cost.
YouTube Premium’s recent success can be ascribed to a variety of factors, including the effect of COVID-19 and a number of technological improvements. This rise was almost certainly fueled by both Covid-related and non-Covid-related variables.
Global video streaming revenue was over $50 billion in 2020 and is predicted to grow at a 21% compound annual growth rate between 2021 and 2028, reaching nearly $224 billion in value. This expansion was fueled in large part by a surge in smartphone and internet usage.
Numerous causes linked to new technology solutions, such as live streaming, music streaming, the adoption of cloud-based solutions, and high-quality streaming, may all be contributing to YouTube Premium’s rapid revenue and subscriber development.
In terms of market share, the US and Canada account for 39% of the video streaming market. Additionally, the subscription model accounted for 43% of revenue for total video streaming services in 2020; both of these factors would account for the 18% year-over-year revenue rise in the United States (YoY).
Additionally, YouTube Premium membership includes access to the company’s music streaming services, which might contribute to revenue growth from premium sign-ups. Between 2021 and 2027, the music streaming business as a whole is predicted to increase at a healthy 9.8 percent.
The COVID-19 pandemic has increased extreme growth
Consumer behavior has been irreversibly altered as a result of the COVID-19 epidemic. It has had a significant impact on how individuals communicate with one another and how they spend their free time, particularly as more people work from home.
While video streaming services were prominent prior to the pandemic, their growth has accelerated dramatically as a result of the COVID-19 outbreak. People stayed at home as a result of many countries declaring nationwide lockdowns and enforcing stringent travel bans to halt the spread of the illness. This resulted in a surge in the use of digital services such as social networking and online video streaming. Consumer involvement with social media video platforms such as YouTube has increased considerably.
Whether this growth is primarily driven by the all-encompassing features (ad-free videos, original films, YouTube TV, and music streaming for $11.99), changes in consumer behavior as a result of the COVID-19 pandemic, or technological advancements, revenues from YouTube Premium subscriptions in the United States are expected to continue growing at a steady rate.