YouTube estimated to lose $470mil in '09

[LethalWolfe]

Slate.com: Do You Think Bandwidth Grows on Trees?

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.

The whole article is very good an illustrates that being popular isn't the same thing as being profitable. And while popular is good, it doesn't pay the bills.


Lethal

 

[Dr.Pants]

Damn. Well, Youtube is going to have to innovate; I would expect the layout to most defiantly change. Maybe Youtube/Google would start charging for video uploads after a certain amount of space got taken up on their server, for example. Or paying to link a video to w/e webpage. Still, its had a good run. I'd prefer it over other streaming video sites.

EDIT - just saw page two, and I'm practically repeating the last two sentences. Still, YouTube IS going to have to change to remain a service

 

[11800506]

There was an article similar to this in the NY Times (I think) sometime in the last week. They mentioned that bandwidth costs outweigh advertising revenue. The article also mentioned how Youtube only puts ads on pages with commercial content.

With the decrease in revenue, I think soon we'll start to see Youtube putting ads in more places to further proliferate them throughout the site.

 

[jayeskreezy]

They should take note from Vimeo...just limit the amount someone can upload weekly to 500mb and charge for people to do more than that....call it a premium acct.

 

[LethalWolfe]

From what I've read they are trying to get more deals w/studios to stream content legally. Ad revenue only works if advertisers want to attach their logo to your product and your customers want to sit thru ads. Neither really seems to be the case for YouTube.


Lethal

 

[mikeinternet]

From what I've read they are trying to get more deals w/studios to stream content legally. Ad revenue only works if advertisers want to attach their logo to your product and your customers want to sit thru ads. Neither really seems to be the case for YouTube.


Lethal

I've been hearing the same thing.

How is Hulu making out?

 

[LethalWolfe]

Financially speaking Hulu, which turns a profit, is doing vastly better than YouTube. The whole legal, online video thing is still just a tempest in a teapot really. IIRC only about 1% of people watch their TV shows and/or movies online and online distribution accounts for just a fraction of a percent of the revenue of a major movie studio. This numbers will of course change in time, but people claiming the studios and networks "don't get it" aren't being realistic. "Old media", in terms of video, still generates insanely more money than "new media" does so companies aren't going to ditch profits for loses just so they can be on the bleeding edge of technology.


Lethal