Google parent company Alphabet does not break out earnings results from YouTube, thus leaving revenues generated by the video giant largely in the dark. But a new projection report from Eric Sheridan, analyst at global financial firm UBS, aims to shed some light on YouTube’s performance and future growth prospects.
Last year, YouTube ad revenues represented a relatively small portion of Google’s total ad revenues, according to a report by stock analysis company Amigo Bulls, compared with revenue derived from Google web search. While YouTube grossed $8.5 billion in 2015, according to Sheridan’s report, Google websites reportedly grossed $52.4 billion.
However, Sheridan believes YouTube could very well be central to Google’s next phase of growth. He anticipates YouTube will continue to grow at 21% for the next four years, and that by 2020, the site will have generated $27.4 billion in revenues. This is comparable to Facebook’s revenue estimates for 2016, which are currently pegged at $25.6 billion.
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This growth is attributed to the fact that 10 of the most popular science and food creators on YouTube have grown, in terms of subscriptions, in ways comparable to cable channels over the past five years, according to the below charts compiled by Barclays.
YouTube is also thriving amid high rates of unemployment among millennials, or the boomerang generation, Amigo Bulls reports, who have returned home to live with their parents and have limited income to spend on entertainment.