YouTube’s Revenue Will Top Disney’s This Year As It Becomes “The Home For All Things Video”, Analyst Says

YouTube‘s revenue will surpass Disney‘s this year, making it the top global player in media, according to a report by veteran Wall Street analyst Michael Nathanson.

With $54.2 billion in revenue last year, the company is on pace to become No. 1 by the end of 2025, he predicts in a new report issued Monday.

Because of its massive viewing, which has twice eclipsed that for Disney and other media giants according to Nielsen, the valuation for the former black sheep has continued moving skyward.

“If YouTube was a standalone business, public comps suggest the business would be worth $475 to $550 billion, or about 30% of Alphabet’s current valuation,” wrote Nathanson, a partner in MoffettNathanson, in his annual report on YouTube, which anoints the company “king of all media.” (The value of Netflix and Meta Platforms, for comparison, are in a similar neighborhood.)

Despite his rhapsody about YouTube’s scale, growth and potential, Nathanson in the report actually lowered his 12-month price target on parent Alphabet’s shares by $10, putting it at $210. He reiterated the firm’s “buy” rating on the stock, however.

Nathanson believes YouTube is just coming into its own as a seller of advertising in the living room. While the company has long touted growth of viewing of its content via a TV screen, confirming last month that it now has surpassed mobile, the ad marketplace is still catching up. Entrenched streaming ad purveyor Pluto is able to charge about 26 cents per hour of viewing, while YouTube is at about 18 cents, Nathanson estimates. “Given YouTube’s scaled reach and data advantage over other AVOD/FAST platforms, we believe YouTube is under-monetizing its engagement today and instead should be in a league of its own ahead of this comp group,” ahead of Tubi, Roku Channel and Pluto, the analyst writes.

In addition to ad revenue upside, Nathanson continues, “YouTube is also positioned to become the home for all things video.”

That projection is based on the company’s dominance across “three key buckets.” The report defines them as YouTube Premium & Music; YouTube TV, where the company recently surpassed 8 million subscribers, and “Other.” That last bucket includes YouTube Primetime Channels (including NFL Sunday Ticket), channel memberships, VOD, and creator monetization tools throwing off a share of proceeds to YouTube.