Video on demand is booming across the globe, but it is the digital-only business model that is driving the growth.
And in the past few years, the digital platform YouTube has become a significant player in the global remunerative remunerator marketplace.
A new study from research firm NPD Group (via Reuters) finds that the YouTube video remittance industry is now worth $12.6bn.
The study also found that the amount of revenue earned by video-on-demand companies in the first six months of 2017 was $6.9bn, up from $3.9 billion in 2016.
“YouTube is growing at a rate faster than most of its peers,” NPD analyst John Della Volpe said.
“The video-based remunerability model has proven to be a profitable model for the video-focused video business, which is driven by the ability to deliver compelling content and earn a fair and reasonable rate.”
The report found that in the last six months, YouTube earned a $6bn profit on revenue of $8.3bn, a rise of nearly 40 per cent compared to the previous year.
That includes $2.6 billion in revenue from ad revenue.
That compares with $1.8bn in 2016 and $1bn in 2015.
The NPD report does not quantify the value of the revenue that the video sharing platform was able to earn from its ad revenue in 2017.
The average advertising dollar spent by a U.S. YouTube user in 2017 was about $7.80.
While there are a number of reasons why YouTube’s ad revenue is growing, the study suggests that the growing popularity of video on demand in 2017 is also helping YouTube to grow its revenue base.
YouTube’s revenue has doubled in the five years to the end of 2016, rising from $4.1bn to $8bn, the report found.
In 2017, the company spent $5.3 billion on ad revenue, which amounted to nearly $3 per U.T. user.
“This is a much higher number than it was in 2016, but still represents a healthy revenue stream,” Della Vampole said.
While ad revenue from YouTube has grown, the overall remunerated remunerating of YouTube is actually down slightly from the same period in 2016 due to a fall in ad revenue recorded in the second half of 2017.
In the first half of the year, YouTube reported $1 billion in ad revenues, down $2bn from $2 billion in the same time period in 2017 and down from $7 billion in 2017 to $6 billion.
YouTube is also not reporting any revenue from subscriptions.
“Subscription revenue has fallen in 2017 due to lower subscriber growth, but subscription revenue will increase in 2018 as more advertisers begin to choose the subscription model,” the NPD study said.
According to NPD, the average YouTube user spends $8 on YouTube in total per year.
The researchers say that video sharing platforms such as Facebook, Twitter, and LinkedIn are all growing at an average of $1,500 per user.
However, the authors say that there is a risk that some users will spend less than that.
“As a result, the remunerators of all video sharing websites are likely to continue to grow,” the report said.
The research comes as the YouTube team works to ensure that the platform continues to attract more advertisers.
YouTube has been under increasing pressure to address the issues raised by the video streaming service’s ad-based business model.
The platform has been hit by a slew of lawsuits from advertisers, as well as by a series of legal actions from rivals.