YouTube reported a decline in advertising revenue by 2.6% year-over-year in Q1 2023 to $6.69 Billion, amid the ongoing economic uncertainty, for the third consecutive quarter. The company reassured investors during the earnings call that the platform will focus on its success with Shorts (a short-form video feature).
YouTube is using Shorts to hold onto viewers and extend watch time. Google says YouTube Shorts generates more than 50 Billion daily views on average. Sundar Pichai, CEO of Google and Alphabet, said the number of channels that were uploaded to Shorts in 2022 daily grew by over 80%. He said those posting weekly on Shorts saw the majority of new channel subscribers coming from their Shorts posts.
Philipp Schindler, Google’s chief business officer, said they are seeing strong watch time, growth and monetization is also progressing nicely. He explained that people are engaging and converting on ads across Shorts at increasing rates. But the platform has been seeing swift competition from rival platforms like TikTok and Instagram. “In YouTube ads, we saw signs of stabilization and performance, while in-network there was an incremental pullback in advertiser spend.”
Pichai said on the call that YouTube TV and YouTube Primetime Channels subscription services have great momentum. He highlighted that YouTube’s announcement of pricing for the NFL Sunday Ticket out-of-market games package was poised to draw in new subscribers but the package will cost $100 lower per season for YouTube TV subscribers.
