Google's Profitability Trends May Decline Due To YouTube Content Investment
- YouTube’s top content producers are being bought by other companies, and they may eventually sell content to other buyers.
- YouTube responds by investing into top content producers, as it has a lot at stake due to the popularity of the app.
- YouTube’s content investment makes sense strategically, as it needs to retain its core user base.
- Content investment will diminish the gross margins of YouTube, and will slow the rate at which gross profit grows.