OT: YouTube not profitable?

[fiamme red]

Strange, but true.

http://www.slate.com/id/2216162/pagenum/all/

Everyone knows that print newspapers are our generation's horse-and-buggy; in the most wired cities, they've been pummeled by competition from the Web. But it might surprise you to learn that one of the largest and most-celebrated new-media ventures is burning through cash at a rate that makes newspapers look like wise investments. It's called YouTube: According a recent report by analysts at the financial-services company Credit Suisse, Google will lose $470 million on the video-sharing site this year alone. To put it another way, the Boston Globe, which is on track to lose $85 million in 2009, is five times more profitable—or, rather, less unprofitable—than YouTube...

[Pete Serotta]

red for fiamme :beer:

[fiamme red]

red for fiamme :beer:Thanks, Pete. :beer:

[csm]

I've always wondered how these internet things make money. turns out most probably aren't.

[fiamme red]

I've always wondered how these internet things make money. turns out most probably aren't.I'd bet that even a forum as popular as this one isn't a big source of revenue for Serotta. Not sure if they lose anything by it, though. ;)

[Lifelover]

I've always wondered how these internet things make money. turns out most probably aren't.

I'm with you. It's easy to see how a search engine like Google can generate cash from advertising, but who logs on to youtube and than clicks over to an add.

[onekgguy]

I don't know why the people at YouTube don't simply charge a fee the same way Flickr does for their 'pro' accounts. I'd happily pay $25 or more per year to have them host my videos. Sure, the vast majority of people wouldn't want to pay but perhaps they could do what Flickr does and have a free version which is somewhat limited.

You can now upload 1 gb files to YouTube. I don't understand why they're allowing that if they're having the financial problems they are. That doesn't make much sense. Allow paying members that option but not those using the site for free. I dunno. I hope they figure it out because I'd sure hate to see it go bye-bye.

Kevin g

[MattTuck]

I'd bet that even a forum as popular as this one isn't a big source of revenue for Serotta. Not sure if they lose anything by it, though. ;)

Not sure they make anything... all their advertisements are their own... unless they've got some dotcom style accounting going on, this is strictly a public service for them.



As far as youtube is concerned, once they find a way to monetize the advertising around video, they'll make huge amounts of money.

[Climb01742]

another interesting example is twitter. if twitter weren't free, my humble guess is it wouldn't exist. how they ever make money will be fascinating.

youtube, though, seems different. i read that youtube is becoming the first place people search, before google. i could see an ad-supported model, particularly video ads, short and very targeted. google is all about targeted.

[Lurch]

Google has some wicked smart folks there. I assume they are following the drug dealer model of getting folks hooked, then sneaking in some service fees, pro member services, and increased advertising.

Look how much insane money MySpace made after starting out free and then selling add space.

[BumbleBeeDave]

Google has some wicked smart folks there. I assume they are following the drug dealer model of getting folks hooked, then sneaking in some service fees, pro member services, and increased advertising.

Look how much insane money MySpace made after starting out free and then selling add space.

We have a winner!

They are following the Microsoft model. Get the near-monopoly first, then . . .

They also probably have no problem getting venture capital based on potential alone. I've been to other web sites where you can't watch the news report or whatever until they've gone through an ad--and there doesn't seem to be any way to fast forward through them. You can either sit through it or abort the video. It's especially annoying when you're watching video from a faraway city newscast and you have to sit through an ad for Bubba's Fried Chicken, Fu-Kin Chinese food ("It's Fu-Kin good!") or whatever . . . places you're never going to go shop in a million years.

I've also been to other web sites with videos where ads pop up from the bottom of the screen while you're watching the video. Incredibly annoying and they often obscure content on the screen that may be crucial to whatever you're watching, but again there's no way to get rid of them without just not watching the video.

Would anyone like to place a sucker bet with me that YouTube will start doing both of these at some time in the future?

Aw, c'mon . . . I need the money . . . ;) :D

BBD

[Karin Kirk]

Would anyone like to place a sucker bet with me that YouTube will start doing both of these at some time in the future?


OK, I'll bite. I'll bet you a pair of zebra-striped socks that YouTube will never resort to such cheesy tactics for ad placement. Part of the reason that Google and YouTube have become the go-to place for their content is because of the lack of such annoyances.

I think ads are in YouTube's future, but I'd expect them to follow the same model as Gmail and Google: discrete, targeted and non-annoying.

[William]

There are already pop-up ads on YT videos. Right now you can close them. And they don't pop up all the time..seems to be on certain videos only.


YARP!




William

[Lurch]

Google is also the master of making money for weighting search engine results in their regular day job. I'm sure for some of their "premier" members they would probably offer this sort of model as well. If you search the top viewed videos, a bucketful of them are music videos. I'm sure there is potential there for financial opportunities with Music Companies or Movie Studios wanting a bump to make sure their videos are slightly more prominent.

Marketing dollars are moving online in subtle ways.

[swt]

There are some subtleties about how CS did the cost estimates for transit and peering which could lower that number, but IMO there's still a lower bound that's in the hundreds of millions based on storage and compute needs alone.

It's not clear that google can tolerate another loss leader like their search engine. I've not been a big fan of google's overall strategies. At the end of the day, their ability to develop alternative revenue streams to ads has been zilch, despite millions/billions in M&A and development. Also, their nice-guy PR is just a facade, which is pretty depressing for many of us doing the hard slogging against the monopolies in telecom.

But right now, the three biggest things on the Internet: Twitter, Facebook and Youtube are all sucking multi-hundred million dollar wind right now, and that can't probably go on much longer.