How Does YouTube Make Money?

YouTube is free to watch. Anyone can upload. And it pays creators billions. So where does the money come from?

In 2025, Alphabet said for the first time that YouTube's combined ads and subscriptions revenue topped $60 billion. That makes YouTube one of the largest media businesses in the world. This post breaks down where that money comes from, using Alphabet's own filings.

🎯 Quick Answer (30-Second Read)

  • Ads: $40.4 billion in 2025, up from $36.1 billion in 2024 (Alphabet 10-K).
  • Subscriptions: YouTube Premium, YouTube Music, YouTube TV and NFL Sunday Ticket. Alphabet doesn't break these out, but ads plus subscriptions exceeded $60 billion.
  • Creators get a share: through the YouTube Partner Program, creators earn a cut of ad and Premium revenue.
  • Why it works: creators supply the content for free, YouTube supplies the audience and ad sales, and both split the money.

YouTube in Numbers (2025)

$60B+
ads + subscriptions revenue
$40.4B
ad revenue (+12%)
$11.4B
ad revenue in Q4 alone
325M+
paid subscriptions across Google (incl. YouTube)
xychart-beta title "YouTube ad revenue ($ billions)" x-axis ["2024", "2025"] y-axis "$B" 0 --> 45 bar [36.1, 40.4]

Where the Money Comes From

flowchart TB YT["YouTube
$60B+ (2025)"] YT --> ADS["Advertising
$40.4B"] YT --> SUBS["Subscriptions
(~$20B, implied)"] ADS --> A1["Video ads
pre-roll, mid-roll"] ADS --> A2["Shorts ads"] ADS --> A3["Connected TV ads"] SUBS --> S1["YouTube Premium
+ YouTube Music"] SUBS --> S2["YouTube TV"] SUBS --> S3["NFL Sunday Ticket,
channel memberships"]

Alphabet doesn't publish YouTube subscription revenue. The ~$20B is implied by the gap between the "$60B+" total and reported ad revenue.

1. Advertising: The Biggest Engine

Advertisers pay to show ads before, during and around videos, in Shorts, and in search results. They're mostly sold through Google's ad systems, using the same targeting that powers Google Search ads. Two trends matter most:

  • TV screens: more YouTube watching now happens on living-room TVs, where advertisers pay TV-style prices.
  • Shorts: short videos compete with Instagram Reels and TikTok, and YouTube has been adding more ads to them.

2. Subscriptions: The Fast-Growing Second Engine

  • YouTube Premium: no ads, background play, downloads, and YouTube Music included.
  • YouTube Music: a Spotify competitor.
  • YouTube TV: a live TV service in the US.
  • NFL Sunday Ticket and other add-ons.
  • Channel memberships, Super Chat, Super Thanks: fans pay creators directly, and YouTube takes a share.

3. Sharing Revenue With Creators

YouTube's model only works because creators keep uploading. Through the YouTube Partner Program, eligible creators earn a share of ad revenue from their videos, and a share of Premium revenue based on how much Premium members watch their content. Shorts creators earn from a pooled share of Shorts ad revenue.

Key takeaway: YouTube doesn't pay for most of its content upfront like Netflix does. It shares revenue after the fact. That turns content costs into a variable expense that only grows when revenue does.

YouTube vs Netflix: Two Different Bets

YouTube Netflix
Who makes content Millions of creators Studios Netflix pays upfront
Content cost Revenue share (variable) Big fixed bets on shows
Main revenue Ads, then subscriptions Subscriptions, then ads
2025 revenue $60B+ (ads + subs) $45.2B

The Costs Behind the Revenue

  • Creator payouts: the biggest cost, as creators get a large share of ad revenue.
  • Infrastructure: storing and streaming an enormous library of video worldwide.
  • Music and content licensing: labels, sports leagues and TV networks.
  • Moderation: reviewing content and enforcing policies at scale.

Frequently Asked Questions

How much money does YouTube make a year?

Alphabet reported that YouTube's ads and subscriptions revenue exceeded $60 billion in 2025. YouTube ads alone brought in $40.4 billion, up from $36.1 billion in 2024. Subscription revenue isn't reported separately.

How do YouTubers get paid?

Creators in the YouTube Partner Program earn a share of ad revenue from their videos and a share of YouTube Premium revenue based on Premium members' watch time. Shorts creators share in a pool of Shorts ad revenue. Fans can also pay through memberships, Super Chat and Super Thanks.

Is YouTube profitable?

Alphabet doesn't report YouTube's profit separately; it's included in the Google Services segment, which is highly profitable. YouTube's revenue-sharing model means its biggest cost, creator payouts, rises and falls with revenue.

Conclusion

YouTube makes money from ads ($40.4 billion in 2025) and a fast-growing subscription business, together topping $60 billion. Its secret is the creator revenue share: millions of people make content for free in exchange for a cut, while YouTube provides the audience, ad sales and infrastructure.

Sources

Last verified: 2 November 2026.

Related reads: How the YouTube Algorithm Works · How Does Amazon Make Money? · How Does Microsoft Make Money? · Why Free Apps Cost Billions to Run

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