Apple's removal of built-in YouTube iOS app contributes to tripling of mobile ad sales

Posted:
in General Discussion edited January 2014
In an interview on Thursday, YouTube's vice president of sales Lucas Watson disclosed that mobile ad sales have tripled over the past six months, suggesting the removal of Apple's ad-free version formerly baked into iOS was a key factor in driving revenue.

YouTube


Mobile ads contributed an estimated $350 million to YouTube's revenue over the past half year, reports Bloomberg, as about one quarter of the Internet video service's 1 billion users consumed content from mobile devices.

While not mentioned by Watson, a key driver to the boom in ad revenue could be Apple's decision to deprecate its in-house YouTube app from iOS. In response to the move, Google launched a standalone YouTube app in Apple's App Store just days before iOS 6 debuted in September of 2012 which, as AppleInsider reported at the time, freed the company to show ads ahead of popular videos.

?The commercial business has exploded,? Watson said. ?It?s a huge part of our business, and we know that?s where it?s headed.?

The publication cited estimates from Wedge Partners Corp. analyst Martin Pyykkonen, who said YouTube generates roughly 10 percent of Google's total revenue. Further, the analyst estimated mobile ads account for 20 to 25 of YouTube's ad sales, meaning the sector contributed as much as $350 million to the Internet search giant's reported $14 billion in sales last quarter.

As part of its countdown to the App Store's 50 billionth download, Apple in May announced the most-downloaded apps of all time, with YouTube showing up at the number four spot for free apps.
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Comments

  • Reply 1 of 52
    slurpyslurpy Posts: 5,385member


    Holy shit. Stats like this just so the massive difference in usage between iOS and Android devices. It's unreal. Android fanatics keep gloating about how Android sales are destroying iPhone sales, yet howcome when a youtube app comes out on iOS ad revenue is TRIPLED?

  • Reply 2 of 52
    gtrgtr Posts: 3,231member
    Take the money, Google, and stick it aside for a rainy day.

    Because your business practices are making many of us hear thunder in the distance...
  • Reply 3 of 52
    red oakred oak Posts: 1,100member
    Google now has the ability to track, store, and monetize your YouTube experience

    Apple did not allow this before in the native app

    The contrast between the companies could not be more made more stark than this example
  • Reply 4 of 52
    jd_in_sbjd_in_sb Posts: 1,600member
    "While not mentioned by Watson, a key driver to the boom in ad revenue COULD be Apple's decision to deprecate its in-house YouTube app from iOS."

    The body of the article is far less certain than the title of the article. You might update the title to read: "Apple's removal of built-in YouTube iOS app could be contributing to tripling of mobile ad sales"
  • Reply 5 of 52
    rob53rob53 Posts: 3,272member
    @jd, Google replace Apple's YouTube app with one of its own, which made the money. That's what the article is about.

    To fight Google, Apple should offer a no-cost ad-free video service with their own app. This might challenge YouTubes dominance and cut into googles income. Of course google would probably sue Apple over this. I still don't understand why people think Apple has to allow any app on their system. After all they own it not third party programmers.
  • Reply 6 of 52
    allenbfallenbf Posts: 993member
    Pretty interesting stuff. I doubt Apple cares, but they really did Goog a favor by booting them out of iOS.
  • Reply 7 of 52
    techboytechboy Posts: 183member
    What this really proofs, is how much internet content iPad users are consuming as Apple has been saying all this time.
  • Reply 8 of 52
    dasanman69dasanman69 Posts: 13,002member
    rob53 wrote: »
    @jd, Google replace Apple's YouTube app with one of its own, which made the money. That's what the article is about.

    To fight Google, Apple should offer a no-cost ad-free video service with their own app. This might challenge YouTubes dominance and cut into googles income. Of course google would probably sue Apple over this. I still don't understand why people think Apple has to allow any app on their system. After all they own it not third party programmers.

    The big problem with that is only iOS users would be able to upload/view videos whereas youtube allows multi platform uploads/views.
  • Reply 9 of 52
    dasanman69dasanman69 Posts: 13,002member
    red oak wrote: »
    Google now has the ability to track, store, and monetize your YouTube experience

    Apple did not allow this before in the native app

    The contrast between the companies could not be more made more stark than this example

    What was meant to hurt Google is actually helping them plus it threw iOS users under the bus.
  • Reply 10 of 52
    buckalecbuckalec Posts: 203member


    Queen takes Knight - Apple I believe would have accessed the pro's & con's in immense detail, who knows what is next...

  • Reply 11 of 52
    jragostajragosta Posts: 10,473member
    dasanman69 wrote: »
    The big problem with that is only iOS users would be able to upload/view videos whereas youtube allows multi platform uploads/views.

    Yeah, Apple would never make a cross-platform app. *cough* iTunes safari *cough*
  • Reply 12 of 52
    realisticrealistic Posts: 1,154member
    I wonder if Apple had negotiated a cut of the ad revenue from Google for iOS devices and that is why Apple killed off the baked in app. Just curious but that would make more sense to me over just killing off the baked in app. I am pretty sure Apple had to pay something to Google for ad free access to youtube.
  • Reply 13 of 52
    dasanman69dasanman69 Posts: 13,002member
    jragosta wrote: »
    Yeah, Apple would never make a cross-platform app. *cough* iTunes safari *cough*

    And how well did Safari work out?
  • Reply 14 of 52
    applesauce007applesauce007 Posts: 1,700member


    Apple should replace Google Search with Siri / Yahoo Search so that Google can get more revenue. lol

  • Reply 15 of 52
    sockrolidsockrolid Posts: 2,789member


    Originally Posted by dasanman69 View Post



    What was meant to hurt Google is actually helping them plus it threw iOS users under the bus.


     


    Ah, but Apple can and will hurt Google if the "iRadio" rumors are true.  It's supposedly a free iAd-subsidized music streaming service.


    As opposed to Google's All Access, which is $10 a month but ad-free, like Spotify.  The first casualty of "iRadio" will be Pandora,


    which is supposedly the reigning free ad-subsidized music streaming service.


     


    And how will this hurt Google?  By eventually dominating the free-with-ads streaming audio market.  Never forget that 96% of Google's


    revenue comes from ads.  Taking away ad revenue from Google hurts them directly.  Every day that Google lacks an ad-driven streaming


    music business, Apple will increase their "iRadio" user base, advertisers will flock to Apple's service, and Apple will earn advertising


    dollars that Google isn't.  


     


    Of course, it remains to be seen whether or not the $120/year for Google All Access will make up for that lost ad revenue.  But my guess


    is that Apple's free service will generate a larger subscriber base than Google's pay model.  Ironic that Google would drop the ball like that.


     


    Of course, it's a big wide world of music out there.  Plenty of room for both free-with-ads and pay-without-ads business models.


    And it's an even bigger world of movies and TV out there.  Establishing iAd in "iRadio" could pave the way for video iAds in "iTV."


    You know, where the big money is.  The money Google has no clue how to get (see "Google TV.")

  • Reply 16 of 52
    jragostajragosta Posts: 10,473member
    dasanman69 wrote: »
    And how well did Safari work out?

    I don't know - and don't care.

    You claimed that any Apple service would apply only to iOS users - and that is demonstrably false.
  • Reply 17 of 52
    davendaven Posts: 707member
    I have Mc Tube and the only ads I see are the Mc Tube ads that aren't google ads. Plus I kept the old version of Mc Tube so I can cache videos. Bottom line is that I'm better off than I was before Google forced Apple's hand.
  • Reply 18 of 52
    anantksundaramanantksundaram Posts: 20,407member

    Quote:

    Originally Posted by dasanman69 View Post




    Quote:

    Originally Posted by jragosta View Post



    Yeah, Apple would never make a cross-platform app. *cough* iTunes safari *cough*




    And how well did Safari work out?


    What does that stupid question have to do with the point he's making?

  • Reply 19 of 52
    solipsismxsolipsismx Posts: 19,566member
    dasanman69 wrote: »
    And how well did Safari work out?

    It depends if you think their goal was to dominate the browser market on Windows (which I think is unlikely) or if it was for web developers to have a Windows-based test environment for the growing WebKit-based browsers per Chrome's success (which I think is likely).

    But all that's beside the point as jragosta's comment was making a cross-platform app, not about its success.
  • Reply 20 of 52
    dasanman69dasanman69 Posts: 13,002member
    sockrolid wrote: »
    Ah, but Apple can and will hurt Google if the "iRadio" rumors are true.  It's supposedly a free iAd-subsidized music streaming service.
    As opposed to Google's All Access, which is $10 a month but ad-free, like Spotify.  The first casualty of "iRadio" will be Pandora,
    which is supposedly the reigning free ad-subsidized music streaming service.

    And how will this hurt Google?  By eventually dominating the free-with-ads streaming audio market.  Never forget that 96% of Google's
    revenue comes from ads.  Taking away ad revenue from Google hurts them directly.  Every day that Google lacks an ad-driven streaming
    music business, Apple will increase their "iRadio" user base, advertisers will flock to Apple's service, and Apple will earn advertising
    dollars that Google isn't.  

    Of course, it remains to be seen whether or not the $120/year for Google All Access will make up for that lost ad revenue.  But my guess
    is that Apple's free service will generate a larger subscriber base than Google's pay model.  Ironic that Google would drop the ball like that.

    Of course, it's a big wide world of music out there.  Plenty of room for both free-with-ads and pay-without-ads business models.
    And it's an even bigger world of movies and TV out there.  Establishing iAd in "iRadio" could pave the way for video iAds in "iTV."
    You know, where the big money is.  The money Google has no clue how to get (see "Google TV.")

    If I remember correctly you previously predicted Google's doom during the Oracle suit. I don't see how a ad driven radio would hurt Google since Pandora is the same thing and available on both platforms. If that hasn't hurt Google then 'iRadio' won't either.
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