As Alphabet reported fourth quarter earnings Tuesday, the company didn’t share many specifics for its first year of YouTube’s NFL Sunday Ticket offering, but executives said they’re pleased with signups for the football package, while also citing fast-growing YouTube viewership on connected TV.
Google subscriptions platforms and devices revenue reached $10.8 billion in the quarter, up from $8.8 billion in Q4 2022. On the earnings call Alphabet CEO Sundar Pichai said Google subscription revenue reached $15 billion annually. Subscription growth was driven by YouTube, in particular Music and Premium, as well as live TV streaming service YouTube TV and Google One. The company didn’t break out subscription revenue for its virtual MVPD YouTube TV specifically, but executives cited positive customer feedback on the viewing experience, including its multi-view, unlimited DVR capabilities and lack of latency or lag time.
As usual, Google-parent Alphabet also didn’t disclose new subscriber figures for YouTube TV, which had an estimated 6.5 million subscribers as of the end of Q3 2023 after adding 600,000 in the quarter, according to Leichtman Research Group.
During the earnings call Tuesday, Philipp Schindler, chief business officer for Google, said “we’re pleased with the NFL Sunday Ticket signups” both as an add-on to the YouTube TV pay TV bundle as well as a standalone option via YouTube Primetime Channels – without disclosing any additional details.
The first season of the football package “gave creators new opportunities to create content and feed user engagement across traditional user content and professional sports content,” he added.
On the advertising side YouTube ads generated $9.2 billion in revenue in Q4, up 16% year over year, from $7.96 billion in the same quarter of 2022.
And with YouTube TV and YouTube Primetime Channels the new home of the NFL Sunday Ticket package, Schindler, said sports content on YouTube is pulling in new and existing advertiser interest. He cited more than 90 Upfront and scatter market advertiser partners in its first year across the NFL Sunday Ticket for in-game advertising both. He also noted that advertisers can buy from an NFL lineup as part of the YouTube Select portfolio, that enables them to reach football fans across YouTube, whether they’re watching live NFL games, NFL highlights or post-game commentary on YouTube channels.
“We saw a lot of demand across the ad market around our YouTube Sunday Ticket offering here,” he added.
Bringing sports into the fold with NFL games also fits into what analyst Colin Dixon previously noted is Google’s “one-stop-shop” video ambition for YouTube.
On the viewership front, Schindler said YouTube continued to grow watch time, “with strong growth in Shorts and connected TV.” Shorts continues to be a priority, where it’s averaging 70 billion daily views. However, its connected TVs in the living room “where viewership is growing the fastest,” Schindler said.
Supporting that one-stop shop ambition, the executive pointed to investments to improve the CTV experience including interactive features tailored to TVs, creator content, NFL Sunday Ticket the Sunday Ticket – which he said supports the company’s long-term strategy - and a range of live sports and studio content via YouTube TV and Primetime Channels.
“Put this all together and YouTube is a must-have app on every connected TV,” Schindler continued, while later adding that NFL Sunday Ticket “really helped solidify” that position for YouTube.
And while subscription revenue rose, advertising still constitutes the bulk of monetization for YouTube. As it relates to CTV, since last year YouTube has rolled out CTV formats like pause ads and 30-second non-skippable ad formats, a send-to-phone experience that lets people use a second screen to engage with ads, as well as CTV ads for YouTube shorts globally.
Google is also leaning into AI to power video formats and other capabilities that executives said help let advertisers do more with less.
Asked by analysts on the call about the opportunity for connected TV outside of the U.S., Schindler pointed out that YouTube continues to be a leader in TV watch time in the U.S., where he said, “it’s not just one audience group diving deep, it’s really all audiences.” As for CTV internationally, he acknowledged it’s “something we are closely looking at” but had nothing more specific to share at this point.