Alphabet’s YouTube revenue disclosure could pressure Instagram to share some money with creators, publishers
If Instagram decides to finally start sharing its advertising revenue with media companies and individual video creators, they may have YouTube to thank.
On Feb. 3, Alphabet finally shed some light on the size of YouTube’s advertising business. The holding company reported that the video platform company generated $15.1 billion in advertising revenue in 2019. A day after Alphabet’s disclosure, Bloomberg reported that Facebook-owned Instagram realized $20 billion in advertising revenue last year.
Not only does Instagram reportedly rake in more ad dollars than YouTube, but Instagram does not share a portion of that money with the creators and media companies that distribute content on its platform. That’s different from YouTube’s practices. In fact, the “majority” of YouTube’s advertising revenue goes to creators and media companies, Alphabet CFO Ruth Porat said during the company’s fourth-quarter earnings call.
Instagram has offered tools for media companies and creators so they can post content that marketers pay for. Nonetheless, Instagram also makes money when these marketers opt to promote their posts as ads on the platform, but it does not share that ad revenue with the media companies or creators.
Media companies and creators have already been calling for platform companies including Instagram to follow YouTube’s example and introduce a revenue-sharing program. These content producers argue that the material they post on these platforms helps in attracting and retaining audiences, which in turn brings in advertising. The back-to-back revelations about the value of YouTube’s and Instagram’s advertising businesses could amplify those pleas.
More in Media
Reuters and Time adopt bot-blocking whitelists to rein in AI crawlers
Reuters and Time adopt a ‘block-all’ AI bot strategy, part of a broader publisher move toward whitelist-only access.
Google’s AI opt-out leaves publishers with a choice they can’t safely use
The CMA has, on paper, given publishers a right to refuse AI in search. But because it’s opt-out, and Google is slow-walking the data needed to judge the impact, that right is barely usable, publishers say.
YouTube’s AI remix push exposes a looming reckoning for the creator economy
YouTube’s Gemini Omni integration has highlighted some of the major problems generative AI poses in the creator economy.