Google’s YouTube Scooping up the Ad World at High Margins, Says Nomura: "... analyst Anthony DiClemente with Nomura Equity Research today offers up his model for what revenue may be at the company’s YouTube property, which is benefiting from share shift in advertising to online, and has “the healthiest margins in streaming video.”... DiClemente notes the business has much higher profit margins than Google overall...Google’s YouTube is in the front lines in offering video content against which brands can advertise, writes DiClemente... We expect premium content and increased engagement from MCNs [multi-channel networks] to drive higher views per user and more overall viewing of YouTube videos, growing at an accelerating pace through 2017E. Facebook (FB) is the seond-biggest online video destination, he notes, and is trying to lure away YouTube’s advertisers. But the market is big enough for multiple contenders... DiClemente also compares YouTube to Netflix: next year, YouTube may have $5.88 billion in revenue, just behind a $6.1 billion he projects for Netflix. But because YouTube is mostly user-generated, it’s not as expensive as Netflix’s content acquisitions, giving YouTube a 59% Ebitda margin versus just 10% for Netflix. Google stock today is up $2.74, or half a percent, at $596.03."
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