Google’s Subscription Bet Pays Off as YouTube Revenue Crosses $60 Billion

YouTube is slowly becoming one of Google’s most important businesses. Alphabet revealed that YouTube generated $60 billion in total revenue in the last financial year, including advertising and subscriptions. This marks a 17 percent increase compared to the previous year. At the same time, Google said it now has 325 million paying users across YouTube Premium and Google One, up from 300 million just three months earlier. These numbers clearly show that subscriptions are now a serious growth engine for Google.

For a company that has depended heavily on advertising for decades, this change matters. Advertising is still growing, but it is no longer the only pillar. YouTube’s ad revenue rose 9 percent year-on-year to $11.38 billion in the fourth quarter. While this figure fell slightly short of analyst expectations, the long-term trend remains positive. More importantly, subscription revenue brings stability. It is predictable, recurring, and less exposed to economic slowdowns than ads.

YouTube Premium is playing a key role here. Google did not share exact numbers for YouTube Premium alone, but confirmed strong traction for its $8 per month ad-free plan. When scaled across hundreds of millions of users, even a low-priced subscription becomes a massive revenue stream. This is also why Google is expanding YouTube TV. Sundar Pichai confirmed that new genre-based YouTube TV plans are coming soon, offering more flexibility and choice for subscribers.

This signals a clear strategy. Google wants YouTube to function like a hybrid platform. Part social media, part streaming service, and part subscription business. This diversification reduces risk and strengthens YouTube’s position as a long-term asset.

Short-form video is another area where YouTube is quietly making progress. YouTube Shorts recorded around 200 billion average daily views during the quarter, a figure that has remained flat year-on-year. At first glance, this looks like stagnation. But Google revealed a more important detail. In some countries, ads on Shorts now generate more revenue per hour than traditional in-stream ads. This means Shorts is no longer just a defensive product against TikTok. It is becoming a meaningful monetization channel.

Viewers watched more than 700 million hours of podcasts on their TVs in a single month. This highlights a shift in viewing behavior. YouTube is increasingly being consumed in the living room, not just on mobile devices. Longer watch times on TV usually lead to better ad performance and stronger audience loyalty.

AI is deeply tied to this growth. Google said more than one million channels are now using YouTube’s AI creation tools. In addition, 20 million users used Gemini-powered content discovery features in December alone. For Google, AI is not just a buzzword. It helps creators produce content faster, improves content discovery, and keeps users engaged for longer periods.

The impact on creators, however, is more complex. Subscription growth is good for platform stability, but it also moves power further toward YouTube. Premium users do not see ads, which changes how ad revenue is distributed.

Shorts monetization improvement is positive, but it also increases competition. As more creators chase short-form reach and AI tools lower the barrier to entry, standing out becomes harder.

In the long run, AI tools will raise the baseline quality of content. But they will not guarantee success. As creation becomes easier, originality becomes more valuable. Algorithms will continue to reward watch time and retention, not volume. Human personality, trust, and storytelling will matter more than ever.

From a business perspective, Google is making the right moves. By combining ads, subscriptions, Shorts, podcasts, TV viewing, and AI tools under one platform, YouTube is becoming Google’s most resilient business. It is less vulnerable to ad market swings and better positioned for long-term growth.

Over the past few years, the platform has paid creators, artists, and partners more than $100 billion through ad revenue sharing, subscription cuts, Shorts bonuses, and licensing deals. This shows that as YouTube grows, creator payouts also grow. So, the growth of YouTube is also the growth of millions of creators who work hard to make quality content. But the next phase will reward depth, not volume.