YouTube at MoffettNathanson Conference: AI and Monetization Drive Growth

On Thursday, 15 May 2025, at the MoffettNathanson 2025 Media, Internet & Communications Conference, YouTube (NASDAQ:GOOG) shared insights into its strategic direction as it celebrates its 20th anniversary. CEO Neil Mohan highlighted the platform’s evolution and future plans, emphasizing both the challenges and opportunities ahead. Key areas of focus included AI-driven innovation, monetization strategies, and enhancing user experiences.

Key Takeaways

• YouTube’s revenue exceeded $50 billion, up from $40 billion in 2023.
• Shorts monetization in some regions matches or surpasses traditional formats.
• AI is pivotal in content recommendations and advertising solutions.
• YouTube TV and Premium subscriptions are growing, with over 8 million and 25 million subscribers, respectively.
• Connected TV engagement is robust, with YouTube as the leading platform.

Financial Results

• Overall Revenue: YouTube’s revenue reached over $50 billion, showcasing significant growth from $40 billion in 2023.
• Shorts Monetization: In certain markets, including the US, Shorts revenue per watch hour is on par with or exceeds traditional monetization methods.
• Advertising Growth: YouTube ads saw a 10% increase year-on-year, driven primarily by direct response and brand advertising.
• Demand Generation: AI-powered campaigns improved cost efficiency by 26% year-on-year.
• Creator Payouts: Over $70 billion was paid to creators and partners from 2021 to 2023.

Operational Updates

• Connected TV: YouTube is the top streaming service on connected TVs in the US, with over a billion hours of global engagement.
• Shorts and Podcasts: Shorts saw a 20% increase in engaged views, and 70% of channels upload Shorts. Podcasts engage over a billion users monthly.
• AI Investments: AI plays a critical role in recommendations, content policy enforcement, and creative tools.

Future Outlook

• Creator Support: Continued investment in tools and formats for creators, from short-form to long-form content.
• Connected TV: Ongoing innovation to enhance the connected TV experience and grow viewership.
• AI-Driven Innovation: Focus on AI for creation and distribution, including multitrack audio translation.
• Subscription Growth: Investment in YouTube Music and Premium, with new offerings like Premium Lite.
• Sports Partnerships: Leveraging sports content, such as the NFL Sunday Ticket, to boost viewership.

Q&A Highlights

• Channel Bundles: Emphasis on product innovation over specific channel lineups for YouTube TV.
• Ad Load: User experience is prioritized, with exploration of deeper ad pods for fewer interruptions.
• NFL Sunday Ticket: Integration with the creator ecosystem for enhanced viewing experiences.

In conclusion, YouTube’s strategic focus on AI, monetization, and user experience positions it well for future growth. For more detailed insights, readers are encouraged to refer to the full transcript.

Full transcript - MoffettNathanson 2025 Media, Internet & Communications Conference:

Michael, Host: Thank you for being here. Neil, thanks for being here. Before we get started, I am given the the the role of the safe harbor spokesperson. So some of the states statements that mister Mohan makes may make today could be considered forward looking. These statements involve a number of risks and uncertainties that could cause actual results to differ materially.

Please refer to Alphabet’s forms 10 ks and 10 Q, including the risk factors discussed in its form 10 ks filing. Any forward looking statements that Neil makes are based on assumptions as of today, and Afflebet undertakes no obligation to update them. Okay. Alright. So now, my introduction for Neil.

For those of you that don’t know, CEO of YouTube. Prior to becoming CEO in 2023, Neil served as YouTube’s chief product officer responsible for the company’s forays into streaming, shorts, subscriptions, podcasting, and growing contributions to the creator economy and scale trust and safety issue, efforts. Before joining YouTube, Neil led the product development team and strategy at DoubleClick, then all oversources acquisition and integration with Google. So, Neil, thank you for being here. Once again, we really appreciate it.

Neil Mohan, CEO, YouTube: Thank you for having

Michael, Host: me, Michael. It’s great to be here. So YouTube is celebrating its twentieth year anniversary this year. What has surprised you most about the platform during your tenure there? And what are your key priorities to keep the product momentum going?

Neil Mohan, CEO, YouTube: Sure. Yeah. So happy birthday, YouTube. Very excited to very excited that it’s our it’s hard to believe that it’s our twentieth anniversary. You know, I think what I would say, whether it’s a surprise or not, I think sort of the biggest kind of thought I have on reflection, and I’ve been involved with YouTube for a very, very long time, is just, you know, it was a simple website that started where you would upload grainy videos of yourself, you know, me at the zoo and others like that.

And you fast forward two decades later to today, and it is a place, this incredibly vibrant creator economy ecosystem. Our creators are really the startups of Hollywood just to carry that Silicon Valley analogy forward. They are, innovative and disruptive. They have full studios themselves. I visited some of them, employ lots and lots of people, and they’re pushing the boundaries in terms of entertainment and culture.

They are the reasons why YouTube is the epicenter of culture across the world. And so it’s just amazing to see that transformation. In terms of our priorities, the way that I like to think about the YouTube business is, you know, across multiple sort of interconnected pieces of flywheel, if you if you will. And it starts as, I was just describing with our creators. And so, how do we make it so that they can continue to build an audience, build a community on YouTube?

That is the secret sauce of YouTube. You come to YouTube to connect with your favorite content, your favorite creators every single day. And how do we help them grow their business? They’re entrepreneurs as well. So that’s really the first leg of the flywheel.

So creation tools, supporting multiple formats, everything from fifteen second shorts to fifteen minute, you know, traditional sort of vlog format to fifteen hour livestreams, so creators. The second, of course, is, as I said, you know, we all as fans and viewers come to YouTube to connect with these creators. So how do we create new innovative formats? You know, one of our biggest priorities has been connected TVs. How do we invest in that from a user standpoint, viewer standpoint?

Shorts, of course, is a big big priority for us. Podcasts, of course, is something that we’ve been investing in, so so viewers. And then, kind of the third leg of that stool of that flywheel is really monetization. And we really are fundamentally a twin engine monetization capability with our AVOD business, but also our now our SVOD business across YouTube Music and Premium, YouTube TV, Sunday Ticket, etcetera. And, that monetization sort of drives that flywheel back again, in terms of, attracting new creators, which attracts more viewers and kind of kind of going around.

So those are those are those are the kind of the three legs of our of our flywheel, if you will, and those are my priorities.

Michael, Host: Okay. Can we talk a bit about engagement and viewership? I I think people are still surprised when they see how large YouTube is on a connected TV. You’re the biggest the biggest viewing platform by size, much bigger than Netflix at this point. Can you help us unpack what’s driving that consumption on CTV?

What what’s at the bottom of it?

Neil Mohan, CEO, YouTube: Yeah. I like to I like to talk about our our, position in connected TV as as really like an overnight success that was many years in the making. You know, it has been an area that we’ve been investing in, for years now, actually, prior to COVID, and that is, through product innovation, bringing the magic, immersive nature, interactive nature of YouTube to connected TVs, which was, you know, pioneering at the time, partnerships with device manufacturers, OEMs, etcetera. And that’s really been a big area of investment for us to make the viewing experience first class on, connected TVs. But as you point out, we’ve been the number one streamer, in The US, for the last couple of years, on connected TVs.

Last couple of months, it’s really been across streaming, broadcast, and cable, all combined, in terms of the number one distributor. And, over a billion hours of engagement time, watch time, happens on connected TVs all over the world. And in The US, a few weeks ago, we announced that it’s the primary way that people consume YouTube. So, you know, you often think about YouTube as, you know, what’s in your pocket on your mobile phones. Of course, that is a important and growing surface for us, but connected TVs now are the primary way that people watch YouTube, in in in the in the home.

So that has been a big priority for us and, a real area of growth.

Michael, Host: You mentioned Shorts before. I know that’s a priority as you as you said. Can you give us an update on viewership trends in Shorts? And again, what’s driving the growth? I know that’s been a a pivot for you all.

Neil Mohan, CEO, YouTube: Yeah. Really, what I would say about Shorts so we’ve seen about, 20%, year on year growth in engaged views in Shorts. So con as of q one, so very strong continued momentum in terms of the viewer side. And so what that tells me is that, that is a format that our viewers enjoy and wanna consume. They do it alongside, traditional sort of long form content on YouTube.

So it’s all really part of the part of the experience. And I would say that, a couple of things really drive that to to your question. The first is, especially for younger audiences, viewing video is increasingly participatory in nature. They wanna jump in themselves and participate in that creation process. And Shorts just makes that easy and and straightforward.

So, you know, you open up the app, you hit that plus button at the bottom of YouTube, and you can start making a Short. So that’s one. The second is that it’s like a building on that, it’s a it’s an on ramp for, creativity on YouTube. We have some of our biggest creators today starting as shorts creators. So Alan Chikantow, I mentioned studios in Hollywood.

He has a 10,000 square foot studio, in LA, produces amazing content, employs lots of people. He started as a Shorts creator. Adam W is another example of that. In fact, 70% of, channels uploading to YouTube upload Shorts. Okay.

Michael, Host: Cool. And then you touched on this too is podcast. Right? So you’ve called that that as an area you’re seeing a high level of user engagement. Right?

What’s the opportunity with podcast? I know we’re all focused on it. So give us your sense of how how big the opportunity is there for

Neil Mohan, CEO, YouTube: Yeah. I mean, podcasts have certainly been in the zeitgeist for the last few months. And, again, just like I said on the connected TV side, it’s one of those sort of overnight successes at YouTube that’s been years in the making because we’ve been thinking about it for a long time. And we have now over a billion users every month consuming podcast on YouTube. So incredibly proud of the success there both on be on behalf of viewers, but also our our podcasters.

I’d say a few a couple things that have been driving that on YouTube. The first is, turns out that lots of viewers don’t want to just listen to podcasts. They wanna watch them. We first saw that obviously during COVID when everybody was at home, but that trend has really continued. In fact, lots and lots of podcast comment content on YouTube is watched in the living room on big screen.

So video is really, turns out, incredibly important for podcasts. The second, is discovery. So really helping podcasters grow their audience, which, of course, is our bread and butter with our traditional creators. And so that just really works for podcasters. We’ve and we’ve and then the third final piece is that we’ve really invested in the the podcast list listening or viewing experience, both in the, YouTube main app, but also in the YouTube music app.

So those have been driver drivers of it. And now there’s a real, ecosystem just like there is for creators. You know, everything from, you know, Joe Rogan to Alex Cooper to Rotten Mangoes, to every sort of genre of podcast that’s out there.

Michael, Host: And so you mentioned how important creators are to your business. We have a panel later today, a cheap plug on that, one thirty on the creator economy. So could you talk a bit about the competition for creators? Right? So you guys are clearly the biggest.

What are you seeing in terms of competition, and what are you doing to make sure that that creative community stays with you and is happy to to always work with YouTube?

Neil Mohan, CEO, YouTube: Yeah. That’s great. And I ran into Colin and Samira yesterday. I think that’s gonna be a great session. Their insights are always super, super interesting.

I would say every time I talk to creators, no matter where I am in the world, whether it’s LA, I was in Mumbai a couple weeks ago, they really view YouTube as their home. It is the home base from which all of the opportunities that they have outside of YouTube derive. And in fact, Jimmy Donaldson, mister Beast, was at our upfront last night, and he has in his offices kind of these five rules of success. And the number one pillar he has is YouTube first because he knows that all of his success, obviously, on YouTube. He’s our biggest creator, but off YouTube really derives from his investment and continued focus on YouTube above and beyond everything else.

And I hear that repeatedly from our creators. As I said, these creators, YouTube really is the epic enter of culture today all over the world, especially amongst young viewers, and that stems from what our creators are doing. So it, you know, it stands to reason that other, other services, etcetera, are interested in them because they really are setting the culture. And what we do for them is what I said earlier, Michael, which is focused on two things, helping them build their audience and community. They know that their most authentic, most engaged fans are on YouTube.

That’s home base for them, so continuing to grow that. And then the second, of course, is monetization. You know, we, have always prided ourselves in the fact of being this creator economy. I think from ’21 through 2023, which is the last time we looked at this, paid out over $70,000,000,000 to creators, partners, our our ecosystem there. And over the last ten years, that number has grown every single every single year.

And so growing audience and then growing the business is why creators feel like YouTube is their home.

Michael, Host: So you last time you were here, it was early days, but I think this is the question we’re getting more and more. What do you think the future development application of multimodal Gen AI will do for your creative universe. Right? So you see the tools that are coming out. What do you think the impact’s gonna be on the business?

Neil Mohan, CEO, YouTube: Yeah. I think that’s a that’s that’s a super interesting question. As you can imagine, Michael, that’s obviously lots of conversations within YouTube of that every single day. The first thing I’ll say on that is that’s not a new area of focus for YouTube. We’ve been investing in AI for years and years.

Everything from what you experience every when you open up the app on your phone, on your television in terms of the recommendations that you see has been AI powered. A lot of our content, policy enforcement, AI, powered. Tools like Content ID that enforce rights on YouTube, investment in AI. So we’ve been doing that for years. In terms of air new areas that I’m excited about, particularly for for creators, is creation itself.

So when you, again, open up the app, hit that plus button, you’re gonna see you you’re seeing more and more applications of AI there. Couple of examples that I’m very excited about is a product called DreamScreen. That is being able to, in a matter of seconds, typing in a text prompt into YouTube and generating an image or a video using and this is a collaboration between YouTube and Google DeepMind, taking their VO model and incorporating it into features on YouTube. So creation, is is an area of strength for us, and that’s where AI, and and then, our investment there is gonna is gonna pay off. The other thing that creators are really excited about is, again, growing their audience distribution.

So one, really powerful example of AI there is something that we call multitrack audio. So today, given the global nature of YouTube, one of the biggest barriers of connecting a creator or a creative idea with their audience regardless of where they are in the world is language. But what if we could actually take every video on YouTube and translate that into, not just a couple of languages, but many, many languages and do it at such high fidelity, capturing the creator’s voice, etcetera, that’s a really powerful application of AI that creators are excited about. And then the final piece, is back to where I started, which is things like recommendations. By, investing in Gemini, we can have a deeper understanding of the video and the viewer of the video and combine those things to actually provide much better recommendations, particularly in scenarios where the viewer is a casual viewer, where we might not have lots of watch history, for example, or other information.

And so improving recommendations and therefore improving the product experience of YouTube using Gemini is a fundamental use case of AI that I’m excited about.

Michael, Host: The thing about technology, it happens gradually. You’ve been investing forever and then suddenly. So do you think we’re at the dawn of of this new age of create you know, the kind of the the creator world with as as they start discovering more and more tools. Right? You know, we’re we’re all waiting for that explosion point in terms of the better and better content generation from these creators.

Neil Mohan, CEO, YouTube: The the way I like to describe it, in terms of YouTube’s position there is we’re in this sort of kind of very unique position, which is on the one hand, we invest deeply in this technology, collaborations with Google DeepMind, investment in Gemini, and those use cases on on on YouTube. On the other hand, we are facing and working very closely with the creative industry every single day. And so I really view AI as a technology that is going to empower human creativity. It is going to put these tools in the hands of a lot more people. And I think we’re going to see, therefore, kind of a renaissance in terms of creativity itself, storytelling that’s gonna be powered by AI.

Michael, Host: Got it. So that’s the engagement piece. It’s going really well. It’s about monetization, which is going well as well. Shorts monetization, can you share an update on how YouTube shorts has performed on engagement?

And also, it’s been called out as a headwind to monetization. What have been the challenges there? What factors do you need to solve for to drive further monetization?

Neil Mohan, CEO, YouTube: Yeah. I mean, so, you know, the first the first part of that puzzle, of course, is what we just talked about, which is engagement and viewership. And as I said, 20% growth in engaged views as of q one twenty twenty five. So despite, our our numbers there, that growth continues, really all over the world because it is a format that viewers really, appreciate. So that’s the first thing.

In terms of then the next layer of monetization, it’s really about, the fact that Shorts allows for, you know, on average more ad opportunities because of the feed nature of the product. But, also, this is where some of the AI pieces come in in terms of investing in, the right ad products. So using AI for advertisers to be able to take creative that already exists and translate it to that Shorts format as one example. AI for better targeting. So improving monetization as a result of of better ads products is important.

And in this is something that we’ve been at work on for, as you know, for a couple of years now. I’ve seen really nice success. In fact, we recently hit a a a big milestone for Shorts, which is, in a number of countries, including The US, the the revenue per watch hour, so kind of our core RPH metric, monetization rate metric, is now equal to what it is for traditional in stream on on YouTube. And in fact, in in some places, it’s ahead. And so really, really excited about that.

It’s something that we have been working on for a while, it’s a testament to both the viewer side, but also the quality of the ad products that we build for our advertisers.

Michael, Host: So let’s talk about the advertisers for a second. Can you give us any update on your progress of driving more performance based advertisers becoming less reliant on brand?

Neil Mohan, CEO, YouTube: Yeah. I mean, that that also has been a a multi year effort for us. In fact, in our most recent results, the 10% year on year growth in YouTube ads driven by, you know, direct response followed by followed by brand. So performance is definitely a core part of our portfolio that we offer advertisers. Of course, you know, we have such a variety of surfaces and use cases and formats across YouTube that our goal is to be able to cater to whatever use case the advertiser has.

Everything from connected TVs where brands can tell, tell their stories about their brands and what they stand for, through our non skippable ad formats, to everything that I just talked about in terms of shorts monetization and everything in between. So we are working on both brand as well as direct response. I’ll just give you two very quick examples. Just last night on the brand side, we announced a sponsorship package where around key cultural moments where, as I said, you know, many of them happen on YouTube, whether it’s the Met Gala, whether it’s, you know, the PGA championship or what have you. You can get a takeover where your brand shows up in YouTube search results.

You have meaningful share of voice across all the content that is generated around that moment. You can do channel takeovers there as well. And so that’s something that our brands are very excited about. Also, formats like using QR codes or shoppable connected TV, where through a QR code, you can see something on your television screen and be able to actually then consummate the purchase on your phone. So really trying to innovate across the entire funnel for advertisers both on connected TVs, but also on short.

Michael, Host: So that was all my questions to ask you about action oriented campaigns on CTV because personally, I like to be in the environment of watching something and not leaving. So you’re solving for that by using a phone versus going click to a some destination. Right? So it’s more multi screen in that case.

Neil Mohan, CEO, YouTube: And by the way, it it, that happens that reduces the friction, because it is just simply, just like you see here, just like on the QR code there. It’s very simple to actually, you know, make that click happen. And so that’s one example. Another example, is something that we have been, we announced a few months ago we’ve been working on called pause ads. So that’s the idea that when you’re on your living room screen and you pause the video that you’re watching, there’s a squeeze back, type of experience for users, and then you can see an ad, that’s playing.

And so that’s that’s another example of, of a use case that, you know, brands are interested in, but also performance advertisers are interested in. So you should expect that type of, innovation.

Michael, Host: So let’s talk about AI and ad. You talked about how it’s helping other parts of the ecosystem for YouTube. Given the massive number of impressions that are generated on YouTube, how are you adding value through, you know, to those impressions through technology to support healthy pricing for your creators and to to drive better ROI for your advertisers? Right? So what what have been the innovations using AI?

Neil Mohan, CEO, YouTube: Yeah. So the first is act just like I described the use of AI for creation amongst creators, you worse I’m seeing that on the advertiser side as well. So how do we make that creation process? Ultimately, it’s about that creative that pulls in all of us as potential consumers, easier and more powerful through AI. So being able to take a creative concept or asset that you have and turn it into all of these different formats and surfaces across of across YouTube in a very seamless manner.

And so that is a, I think, very compelling use of AI, and can shave, you know, lots and lots of time and effort, off of that creative process. So that’s that’s one area. The second is, on the targeting and quality side of the of the ads itself. So better targeting, more efficient targeting, that has been an area that we have been investing in. A big area of focus connected to your earlier question, Michael, on on performance advertising is our our campaign type called demand generation, demand gen.

And that is using AI to improve efficiency and efficacy of the ad campaigns that run, across YouTube. And, we’ve seen a 26% improvement in cost per dollar year on year as a result of these investments, including investments in AI. So those are a couple of examples on the creation side, but also on the targeting side where AI plays a big role.

Michael, Host: Okay. Question you get that often is ad load. Right? So do you think there’s room to increase the ad load without harming consumer experience across all your your touch points?

Neil Mohan, CEO, YouTube: Yeah. So the first thing I’ll say and, you know, before my time at YouTube, I was responsible for, a lot of our ads products, at Google. So I I think about this a lot, and I would say the rule has always been focus on the user experience first. And that, in my experience, is not contradictory with advertiser ROI or what have you. So we really always start with that.

That is about ad load. That’s about ads quality, all of those things. And that is the fundamental principle at YouTube, which is, it has to be something that is relevant and useful and interesting to our users. Having said that, there there like I said, I don’t think that’s contradictory with delivering results for our advertisers. In fact, I think they’re self reinforcing.

And a very concrete example of that is what we have been working on on connected TVs, on living room devices around advertising. And so, you know, when you’re in that mode, when you’re sitting on your on your couch and watching YouTube in in sort of that lean back mode, What if we could actually, have fewer ad introduction, ad interruptions, but do it in a way where they are deeper? So pods. So deeper pods, fewer interruptions. And so that is an example of one that allowed us to actually increase the number of ads, you know, per hour, however you wanna measure it, but also improve user satisfaction.

So those two things both rose as a result of that, and, that’s an example of how we think about user quality and advertiser results hand in hand. Right. You know what?

Michael, Host: Kill the golden goose, which is I can tell you I can tell you all about that in media. Talk to you about subscriptions. You guys have done a great job growing that business. I know you’re very proud of how big it’s become. We’re a YouTube TV family.

Many people in the room love YouTube TV, let me ask

Neil Mohan, CEO, YouTube: you about that. Send me your feature requests.

Michael, Host: Yeah. I have them. More more range of playoff games. You can’t control that. So so so we expect YouTube TV to be the single biggest pay TV provider in three years time.

We could be wrong, it’d be two two years time. So with that said, we have a few questions that we always debate inside our firm. Right? Why not call the channel the channel lineup into a more targeted sports news bundle and drop many of the legacy cable networks that are no longer being funded adequately by their parent companies?

Neil Mohan, CEO, YouTube: Yeah. I mean, I guess what I would say there, Michael, is just kinda going back to the origin of YouTube TV and why we, started it in the in the first place. It really was about real really reinventing sort of that whatever legacy or traditional TV experience. Like, I, am a sports lover. I love watching, sports.

How would I want that television experience to be? And so the reason I always like to start with that is because you should think about how we how we invest in YouTube TV through that lens, which is, really through the product innovation lens. And that is the way that we’re gonna look at it. That’s where, our, success comes from. We have over, 8,000,000 subscribers on on YouTube TV.

And so features like multi view, key plays Yep. Those are areas that you should continue to see us invest in. In fact, you know, one of the feature requests we get is people love multi view. They want more choice. So experimenting around more user choice around those types of things.

And so that’s what I think ultimately it’s that product and feature innovation as opposed to, you know, specific channel lineups, for example, that that I think, are important to our growth. And that’s really the way that you should expect us to to look at that product.

Michael, Host: How about the move to skinnier bundles? Right? So, you know, that if you asked if you tested the room, we all want 50 channels, $50. Right? That’s something that I think we all sign up for.

So how do you how do you think about offering a cheaper cheaper, skinnier bundle at a lower price?

Neil Mohan, CEO, YouTube: Yeah. I know. Probably don’t have anything to say on that, today. I mean, we’re always looking at, what our channel mix looks like. We wanna deliver, you know, the best value to our, subscribers.

We get feedback on a regular basis. But I have to tell you, like, it really oftentimes comes back to the product experience itself, the features themselves. Of course, we’re there to watch the content, but how you watch the content, I really think is important to Yeah. To users. And so that’s that’s a big area of focus.

Michael, Host: Yeah. Not to joke, but the features you’ve introduced, it’s it’s a great product. Right? And people who have it swear by it. And once you once you sample it, you can never imagine people going back to the old world.

Neil Mohan, CEO, YouTube: We’re very proud of that product.

Michael, Host: Yeah. It’s great. Yeah. On that point, let’s talk about Sunday ticket and sports rights. This is gonna be a third year carrying the Sunday ticket.

You just announced a big deal with the NFL for the first game of the year this year. Has the product met your expectations? And maybe you could talk about, you know, why and how you’re thinking about this new game that you’re

Neil Mohan, CEO, YouTube: Yeah. So, I mean, I think I think they’re they’re related in some ways. And so we’re very, very excited about our our partnership with the NFL, this exclusive game that’s gonna be carried on on YouTube during kickoff weekend, the Brazil game. We announced the the matchup last night, actually, at our up fronts. Roger came in announcement announced it, chargers versus the chiefs.

And so super, super excited about that. And what I think, at least, I’m particularly excited about, because this is what played out with Sunday Ticket, is that we are going to do it in a uniquely YouTube way. And so it’s beyond it’s beyond YouTube, YouTube TV. Game is gonna be available in front of the paywall to billions of users all over the world. And so I’m very excited about that.

I know the NFL is extremely excited about that sort of global reach that YouTube will be able to provide there. And tying it back to your Sunday Ticket question, I would say we’d like to do with this game what we have done with Sunday Ticket, which is product and technology innovation. That’s what YouTube stands for. So things like multi view. How do we enhance the actual football watching experience, sports watching experience because it’s on YouTube?

That’s super, super important. Because we wanna super serve those sports fans that are on YouTube. We have thirty five billion hours of watch time of sports content on YouTube annually. You know, consumption of sports on living room in YouTube is growing 30% year on year. And so we wanna super serve those fans.

The second thing that I will say is, our creators. What makes watching sports like the NFL Sunday ticket on YouTube, particularly unique is our creator ecosystem. And to the NFL’s credit, they have really leaned into that. And so one small example is this idea of watch with. So, you know, our sports fans, particularly young sports fans, love their favorite creators, sports creators or what have you.

What if you could actually watch your favorite game alongside your favorite creators? And that turns out to actually be a winning product combination. In fact, in Brazil, speaking of this Brazil NFL game, we carry live, live, soccer game soccer matches there. And we did a partnership with a big YouTuber, KazeTV, and it turns out that that is not just a delightful experience when you watch it alongside Kaze, but it also drives viewership because you are now inheriting Kaze’s huge audience as well. And so, whether it’s the Brazilian, domestic leagues or FIFA, they really lean into that creator integration.

So that’s been our experience with Sunday Ticket. We’re, you know, I’m very happy with how that experience has been going. I know the NFL is very happy with with Sunday Ticket on YouTube, and so you should expect to see, you know, a continuation of that.

Michael, Host: On that point, do do you expect other leagues? You know, we had the NBA here yesterday. There some leagues are being challenged by their the RSN model being being, you know, challenging itself. So how do you what do you think of possibility of working with other leagues on products like a Sunday ticket or league passes? Is that something that that you you think will happen and you have tolerance for?

Neil Mohan, CEO, YouTube: I mean, we’re very we’re very focused on making our existing partnerships successful. When we, you know, make a bet, we really wanna see them through and be a success for the partners, but most importantly for our joint fans. And so that’s our focus. You know, we’ll look at, sports opportunities through those lenses that I described. Does it super serve our fans?

Is there some unique technological sort of innovation that we can bring to it? And how do we enhance and integrate our creator ecosystem to make that a better experience? And then going back

Michael, Host: to the NFL game, appetite for other things like that, putting in front of your a paywall. Is that is that, know, this is the the first major one of its kind. But is this a test case for you to see how much how well can we scale this and how well we monetize this?

Neil Mohan, CEO, YouTube: Yeah. We’re always learning. Every time we try these new things, you know, our kind of mantra at YouTube is we wanna continue to push the frontier in terms of creativity and entertainment and culture, and this NFL game is squarely another example of that.

Michael, Host: Okay. So going back to subscriptions, the NFL at Sunday ticket was an important way for YouTube to enter the channels business, right, with prime time channels. Can you talk about your ambitions here? And, no one seems better positioned than you, I believe, to be an aggregator of all these channels in one place. So so how are you seeing this market developing?

What are the gating factors?

Neil Mohan, CEO, YouTube: Yeah. So so the for those of you that aren’t familiar, prime time channels is our a la carte, video service subscription capability within the main app of YouTube. Sunday Ticket is an example of that. So one of the innovations we brought to Sunday Ticket is you could buy it as part of an add on to YouTube TV of that bundle, but you could also buy it a la carte standalone as a standalone SKU in prime time channels. And so that business is a relatively new one for us.

We are investing in it for back to kind of the overall vision that I described right at the top, which is we wanna we wanna serve all of those video use cases, everything from fifteen second shorts to, you know, four hour NFL games to fifteen hour gaming livestreams. And so having primetime channels is a way for us to accomplish that on the user side. We have, 45 channels now really spanning, the gamut of video subscription services. And, you know, we’re happy with, the response so far, but that’s it’s a relatively new business for us. And and, you’re right.

Sunday ticket was was an important part of that.

Michael, Host: Can we talk about another subscription business which doesn’t get as much attention maybe, but it’s larger? YouTube Music and Premium. You announced a 25,000,000 subscribers. Can you talk about what’s driving that growth? What regions of the world are most important to you?

And just give us a sense of anything under the hood on that because it’s such a large business right now.

Neil Mohan, CEO, YouTube: Yeah. I mean, look, that that is a a business that we’ve been investing in for a very long time, nearly a decade. And you mentioned the milestone of a 25,000,000 subscribers. That is a a global product. We wanna continue to invest in it everywhere.

We the way that we look at that is, first and foremost, it’s just about user choice. Can we provide a an offering? This was, you know, when it started was ad free background offline, right, as the features that you get for all of your YouTube content on the main app, on the music app, you know, catering in particular to music lovers on YouTube. That’s obviously a very big vertical on YouTube. But we’ve added dozens of features since the initial launch.

We’re gonna continue to add features, higher quality audio, faster playbacks up to four x playbacks for premium subscribers. So continuing to innovate in terms of user choice and user value we’re adding there, that allows us to, you know, match price with the value that we’re that we’re providing as well. That so I’m very happy about that. We wanna building on that, we wanna add new SKUs. So one new SKU that I’m very excited about is called premium light.

So that is a more affordable subscription SKU where you get, the ads free experience on, the non music part of the YouTube corpus of videos. And so we’re seeing if that introduces a price point and an offering that works for for consumers, so continuing to innovate in that space. And it turns out that when we have a premium user that is a user that contributes more back to our creator ecosystem, to our partners, to, you know, YouTube’s business. So, you know, the kind of the the gross profit profile of that type of a user is meaningfully better than it is on a just a just an ads alone type of a user. So that’s why we’re very happy about that business.

Michael, Host: Okay. So in our last question, let’s let’s get to profitability. Can you talk a bit about how you think about managing the business from a financial and returns perspective?

Neil Mohan, CEO, YouTube: Yeah. I mean, in order to keep that flywheel that we talked about at the start really working for our ecosystem of creators and advertisers and viewers, it’s really important to think about our business in a very disciplined way. And so it starts first and foremost with making long term bets, investing long term bets. So everything from, you know, a lot of them that we talked about, the living room, podcasts, shorts. We’re gonna continue those investments.

AI, that’s really, really important to the long term growth. Then, of course, revenue and monetization. We just announced on our q three twenty four earnings call that overall revenue of YouTube is over 50,000,000,000. That’s up from the 40,000,000,000 that we announced here with with you back in 2023. So continued focus on revenue across AVOD, SVOD we’ve talked about, but also new areas like shopping, channel memberships, direct fan funding opportunities.

So trying to grow that piece, but also focus on things like on the gross margin side. So just a quick example of that is, for example, the revenue share that we offer on shorts is different than it was on sort of traditional VOD. And the reason is it’s a reflection of sort of the creation costs, etcetera, that go into shorts, but it results in an improvement on the on the gross margin side. And then, you know, in terms of kind of further down the statement in terms of just overall sort of operating expenses, of course, we wanna continue to be disciplined there. So, you know, moderating things like headcount growth, vendor costs, using AI, back to your point around AI, around efficiencies.

So that’s really how we look at this. And all of these things, you know, result in our contribution back to to Google services. So that’s sort of how I think about growing the business and financial discipline all at the same time.

Michael, Host: Well, Neil, thanks for being here. We really appreciate it. Keep on going.

Neil Mohan, CEO, YouTube: Alright. Yeah. Thank you. Take care, everybody. Thanks, Michael.

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