Earning calls for Q4 2019 have been frequent during the last weeks. Focusing on the FAANGs, overall performance was solid across the board. Further, the industry was given a special treat from Alphabet during its call on Monday – for the first time ever, YouTube´s contribution to Google´s total revenue was disclosed.
Q4 2019 has overall been a strong quarter for the FAANGs, though Facebook seems to struggle financially. Although its number of users continues to increase (currently at 2.5 billion active users per month), net income only grew by 7% YOY ($7.3 billion), a modest figure compared to 61% growth over 2018. Headcount at the Facebook office grew by 26% YOY, due to its increasing focus on privacy issues, causing a surge in expenses. Amazon had a strong quarter with revenue growth at 21% YOY. CEO Jeff Bezos stated that the company now has more than 150 million Prime members and that they watched twice the number of hours of original movies and TV shows on Prime Video in Q4 compared to 2018.
Apple reported its fiscal Q1 and disclosed revenues of $91.8 billion (+9% YOY) – surpassing analysts’ expectations. The increase in sales was mainly attributed to iPhones, Wearables and Services although the service segment (including Apple TV+) grew slightly below expectations, possibly affected by the launch of Disney+. Netflix disclosed a revenue increase of +31% YOY. In total, the service added 8.8 million subscribers – the majority, 8.33 of these, in international markets. Netflix continues to report a negative cashflow, but CEO Reed Hastings asserted that the company is slowly approaching a positive cash flow, repeating that cash burn peaked in 2019.
Newly appointed CEO of Google´s parent company Alphabet, Sundar Pichai, presented the Q4 results with an unexpected twist. For the first time since Google bought YouTube in 2006, Google disclosed how much of its revenue is made up by YouTube-hosted ads.
Google stated that during 2019, YouTube generated $15 billion (+36% YOY) in ad revenue, representing 10% of Google´s total revenue. Comparably, YouTube´s ad-business is nearly one fifth the size of Facebook´s and six times larger than predicted ad-revenue for Amazon-owned Twitch. Google further disclosed that YouTube´s Premium and Music Premium offerings hold more than 20 million subscribers, in addition to 2 million subscribers on its paid TV service. In the Nordics, YouTube´s daily reach amounts to 27% according to Mediavision’s figures, indicating that 5.3 million individuals (15-74 y/o) watch content on YouTube during an average day.
This week, Tele2 launched its new standalone streaming service Com Hem Play+ in Sweden. The service is said to enable the company to reach consumers that are not yet subscribing to any traditional pay TV offerings.
*Events where Mediavision will be presenting