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Will YouTube Begin Printing Profits in 2016?

Source: YouTube.

YouTube looms large

To be sure, YouTube has all the makings of a competitive titan in the streaming music and video spaces. However, the platform will also need to navigate a few key obstacles in order to become a financial force in both streaming music and video.

For starters, YouTube is largely associated with free or, more correctly, ad-supported content. Although certainly not a given, it will be interesting to see whether Alphabet's media platform can convince consumers to gravitate toward paid subscriptions. Timing could also prove an impediment. Though hoards of users access YouTube's free service, its competition, Pandora and Spotify in streaming music, and Netflix and Amazon in streaming video, have been acquiring subscribers for years now. Although it also enjoys a huge installed base, many suspect Apple Music faces an uphill battle in on-demand music simply because it's unfortunately late to Spotify and Pandora's party.

Overall, given its sheer size and the unique, but much beloved, user-generated content it controls, YouTube's competitive threat shouldn't be underestimated by investors in Pandora, Amazon, or Netflix. I'm cautiously optimistic that Alphabet's emerging media powerhouse has the size and ability to create compelling subscription offerings in both music and video.

While we're clearly in the early innings of this storyline, there's plenty of reason to believe 2016 could be the year YouTube finally taps into its outsized profit potential.

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The article Will YouTube Begin Printing Profits in 2016? originally appeared on Fool.com.

Andrew Tonner owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Amazon.com, Apple, Facebook, Netflix, and Pandora Media. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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