The MBW Stat Of The Week is a weekly series in which we highlight a single data item that the worldwide music industry should be aware of. Cinq Music Group, a technology-driven record label, distribution, and rights management organization, is a sponsor of Stat Of The Week.
YouTube (and Google's) parent firm Alphabet made $8.63 billion in advertising revenue in Q4 2021, according to figures released last week by the video platform's (and Google's) parent company Alphabet (ended December).
It was also a significantly higher quarterly revenue number than Netflix ($7.71 billion) generated during the same period.
When you break down YouTube's $8.63 billion Q4 revenue, you'll see that the site made an average of $2.87 billion each month from advertising in the fourth quarter, in the final three months of 2021 – that’s $93.8 million per day.
YouTube's overall ad business hauled in $28.84 billion in the first 12 months of 2021, after generating $20.21 billion in the first nine months and $8.63 billion in Q4.
It's worth noting that this overall ad revenue figure of $28.84 billion excludes revenue from global subscribers to YouTube Music and YouTube Premium during the year.
It's also nearly double the equal amount ($15.15 billion) that YouTube made from adverts just a year ago.
In September, YouTube stated that it had reached 50 million members, including trialists, for YouTube Music and YouTube Premium. (YouTube Music is a standalone subscription platform that may be purchased alone or as part of a YouTube Premium membership.)
YouTube reported in June 2021 that it has paid more than $4 billion to the music industry in the prior 12 months.
In November, MBW forecast that YouTube’s annual ads business would be bigger than the trade revenues of the entire global recorded music industry in 2021.
That appears to be a foregone conclusion now: According to the International Federation of the Phonographic Industry (IFPI), the global recorded music industry would produce $21.6 billion in total revenues in 2020.
To surpass YouTube's $28.84 billion in annual ad revenues in 2021, the global record company would have to have had annual revenue growth of 33.3 percent or greater the previous year.
Two of the record industry's top businesses - both of which had fantastic annual earnings in calendar 2021 – suggest that's a feasible, but it could be a stretch.
According to MBW's projections, Sony Music Group's recorded music business grew 33.0 percent year over year in calendar 2021. In the same period, Warner Music Group's recorded music segment reported a 20.6 percent year-over-year increase in income.
By the end of Q1 2022, the IFPI is scheduled to confirm the global recorded music industry's annual trade turnover for 2021.
Google/Alphabet Chief Financial Officer Ruth Porat said on Alphabet's earnings call this week that YouTube's advertising sales of $8.6 billion in Q4 2021 reflected "performance in both direct response and brand advertising."
"The reduction in the growth rate compared to the third quarter of 2021 was mostly due to lapping a significant recovery in brand in the fourth quarter of 2020," she added.
The latest ad income figures come after YouTube CEO Susan Wojcicki sent an open letter to the platform's creators detailing the platform's "priorities for 2022."
Wojcicki noted in the letter that the number of YouTube channels around the world making more money is growing the number of YouTube channels around the world making more than $10,000 a year was up 40% year over year.
However, she didn’t specify how many YouTube channels were earning that sum annually.
