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YouTube, a subsidiary of Alphabet (GOOGL, Financials), is expected to surpass Disney in 2025 to become the top media company by revenue, according to analysts at MoffettNathanson. The video platform, launched two decades ago, has evolved into a critical revenue engine for Alphabet and a cornerstone of the digital creator economy.
Analysts value YouTube as a standalone business between $475 billion and $550 billion, highlighting its scale, user engagement, and monetization strength. The site is currently the second-most visited globally behind Google, based on Similarweb data. Over 20 billion videos have been uploaded to the platform since its launch.
YouTube now contributes alongside Google Cloud to more than 30% of Alphabet's overall revenue, analysts said. The platform's revenue streams include advertising and subscription-based services such as YouTube Premium, YouTube Music, and YouTube TV. MoffettNathanson estimates YouTube Premium and Music collectively had 107 million paying users as of 2024, with projections reaching 145 million by 2027. YouTube TV is forecast to reach 11.5 million subscribers in that period.
Despite growth, YouTube faces challenges. The growing popularity of short-form video platforms such as TikTok prompted Alphabet to prioritize YouTube Shorts, though analysts said monetization remains limited. It's probably helping them drive engagement, but I don't think it's an added benefit to revenues, MoffettNathanson's Michael Nathanson said in a CNBC interview.
The company remains under antitrust scrutiny. A U.S. federal judge recently ruled that Google maintains illegal monopolies in the online ad market, raising the possibility that regulators could target YouTube for divestiture. Gartner analyst Andrew Frank told CNBC that Google could face pressure to relax control over parts of its media assets as a result.
YouTube has paid $70 billion to creators between 2021 and 2024, CEO Neal Mohan said. This creator payout model, alongside user-generated content, allows Alphabet to avoid the production costs associated with traditional media competitors.
The platform was founded in 2005 by Jawed Karim, Steve Chen, and Chad Hurley, and was sold to Google in 2006 for $1.65 billion. Its first video, Me at the Zoo, marked the beginning of a new era in user-driven digital content. YouTube has since become central to media distribution and the broader tech ecosystem.
This article first appeared on GuruFocus.