youtube shorts
Image by Tumisu from Pixabay

In a heated race for short-form video dominance, Google’s YouTube Shorts is sprinting to the front with over 2 billion logged-in monthly users, as announced by Google on July 26. YouTube Shorts outpaces rivals like TikTok and Instagram Reels — 1.67 billion and 1.63 billion respectively — boasting huge user growth from the 1.5 billion monthly users recorded last year.

The continual introduction of new features and product updates by these tech giants speaks volumes about the fierce competition in the market.

Just this week, YouTube announced that it’s experimenting with a feature that allows viewers to create Shorts from comments below the videos they’re watching. Further strengthening YouTube’s position, during the announcement of its Q2 2023 earnings, Google reported a 4% year-on-year increase in YouTube’s ad sales, reaching $7.67 billion.

The growth rate surpassed analyst estimates and is a significant increase from the previous year. Building on the success of its ad business, Google is expanding its premium ad service, YouTube Select, with the addition of 30-second, non-skippable ads. The company introduced advertising on Shorts late last year.

YouTube Joins Forces with NFL and Warner Bros. Discovery

YouTube is stretching its revenues further beyond ad revenue, introducing multiple offerings. The platform began NFL Sunday Ticket pre-sales in April, setting up streaming for the fall season. In a partnership, YouTube and Warner Bros. Discovery have teamed up to provide a Max-NFL Sunday Ticket bundle on YouTube TV.

Google disclosed that YouTube is reaching over 150 million viewers via connected TV screens in the U.S. and is experiencing a surge in international growth.

Google held back from updating the number of paid users across YouTube Premium and Music, which stood at 80 million last year, however. The premium plans have seen a price hike, with the individual premium and Music plans increasing by $2 and $1, respectively, in the U.S.

YouTube Shorts Boosts Alphabet’s Bottom Line

Alphabet, Google’s parent company, reported revenues of $74.60 billion and a net income of $18.37 billion, or $1.44 per share for the quarter ending June 30. These figures show a marked increase from the $69.7 billion recorded in Q2 2022. Google Cloud services contributed $8.03 billion, while ‘Google other revenues’ – which includes revenues from the Play Store, hardware, and non-advertising YouTube revenue – touched $8.14 billion, up from $6.55 billion in Q2 2022.

Sundar Pichai, CEO of Alphabet and Google, credited the company’s success to its leadership in AI and engineering innovation. “With fifteen products that each serve half a billion people, and six that serve over two billion each, we have so many opportunities to deliver on our mission,” Pichai stated.

In an executive shuffle, Alphabet promoted Ruth Porat, from chief financial officer to president and chief investment officer. Porat will oversee divisions such as self-driving company Waymo, health-focused Verily, and Google Fiber, while continuing to steer the company’s 2024 and long-range capital planning processes. The search for her successor as CFO is ongoing. Porat’s decision to increase prices on services was a response to “significant subscriber growth.”

Porat commented on Alphabet’s growth strategy, saying, “We continue investing for growth, while prioritising our efforts to durably reengineer our cost base company-wide and create capacity to deliver sustainable value for the long term.” Following these announcements, Alphabet shares rose nearly 7% in after-hours trading.

In short, Google’s YouTube Shorts is surging ahead in the short-form video arena, with its user base increasing to over 2 billion. This is a significant stride in a highly competitive industry and strengthens Google’s position in the global market. YouTube’s ad revenue growth proves its growing influence, while partnerships with NFL and Warner Bros. Discovery reflect an ambitious strategy to diversify its service offerings.

Coupled with the reach of YouTube on connected TV screens and the executive shuffle in Alphabet, these developments underscore Google’s aggressive expansion and commitment to delivering value to its stakeholders. It’s a race of rapid strides, and Google seems to be setting the pace.

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