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YouTube Won't Sell For Less Than $1.5 Billion
Joel from Sydney writes "According to a report in the New York Post, YouTube has informed potential buyers it won't be sold for anything less than $1.5 billion. The report lists Viacom, Disney, AOL, eBay and News Corp as potential buyers. Given that News Corp purchased MySpace last year for $580 million, is this a realistic figure?" From the article: "YouTube's stated business model is to 'pursue advertising,' but potential advertisers might be skittish considering industry estimates that roughly 90 percent of the content viewed on its site violates copyright laws. And at least one giant, Universal Music, is threatening to sue the company if its artists' songs keep appearing there. As it tries to focus on videos that don't use content owned by media companies, it yesterday launched the YouTube Underground, a contest to 'discover the most talented unsigned bands and musicians on YouTube,' backed by Cingular Wireless, Gibson Guitar and ABC's 'Good Morning America.'"
It won't sell for under 1.5b. It won't sell at all. Welcome dot-com bust 2 point oh.
The masses are the crack whores of religion.
When you've gotten so big that people are afraid you're controlling free speech and the press, then I don't think $1.5 billion is too much to ask.
Remember, the CEO of News Corp is Rupert Murdoch. Everything you see with the Fox logo is his. Its yearly revenue is around $24 billion. "News Corp" is a nice generic name that no one remembers while it's holdings grow out of control. Whenever you see Fox or Myspace or anything listed in the link above, you should be thinking one thing: "It's all News Corp under the direction of one man."
Pretty scary when you think about it.
My work here is dung.
Let's see... Internet company... flaky business model... outrageous amounts of money... well, my time machine works -- I must be back in 1998!
GetOuttaMySpace - The Anti-Social Network
is this a realistic figure?
Why not? It's just a few thousand layoffs. Disney power-rammed their animation division into a toilet for no reason, then shit $7 billion into a Tiffany champagne glass to buy Pixar. $1.5 billion is chickenshit.
Pass the croutons.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
... so now we've got
;)
1. Create service
2. Get other people to violate copyright with your service
3. Avoid Lawsuits
4. ???
5. Profit (or at least $1.5B)
I'd really love to have seen their pitch to any VC firms
"If A equals success, then the formua is A=X+Y+Z. X is work. Y is play. Z is keep your mouth shut" - A Einstein.
for about $2B, then it's not so much. And Broadcast.com (Mark Cuban's "invention") didn't really work yet. And I'll bet he's grousing that his current HD venture can't get that figure because it's not as evolved, and certainly not as popular as YouTube.
The price is huge, but it's not out of line with web-based social properties. Not that it's fair.... but the future revenues if it's managed well could be very big.
---- Teach Peace. It's Cheaper Than War.
and the buyer should keep another $1.5bn to settle the lawsuits.
They're clearly idiots. They have a market position but little in the way of real IP as far as I can tell. 0.5bn for myspace was only on account of a particularly high grade shipment of psychedelics turning up at news international... If anyone's that dumb again, well, it's business darwinism.
They want their business model back.
-- Fugacity: Confusing chemists since 1908
Really, enjoy it while you can, because the record companies will sue YouTube into the ground. Soon.
So this company will not be worth anything in a year.
....pay for the bandwidth. How do they manage to pay for it now? I'd love to see some figures on their revenue vs costs.
Or, to put it another way, I think there are better alternatives to suing and the record companies have figured this out. When they sued Napster, Kazaa & eDonkey and then started suing users, I don't think their profits went up. I mean, they might have gotten a few million from the companies and a few thousand from the users that year. But they destroyed something that they could have taken advantage of. Most industries would kill for an infrastructure of people acting as their own marketing tools spreading their product around. Now, it was illegal because the product was being copied illegally. But if the record companies could have taken a look at the business model and adapted it to suit their needs and sued for the ability to call the shots instead of just pure cash, I think they would have come out further ahead in the long run.
You see, if the record companies looked at YouTube and tried to drive them in the ground, they'd only be trying to suppress something that has come about naturally. Why don't they just claim what is theirs and demand all the copyrighted material ad revenue goes straight to them? Why don't they try to work something out with YouTube in an attempt to generate a recurring income? I mean, surely YouTube can keep the quality down on the work or restrict it to certain songs so that people will feel compelled to purchase CDs/DVDs, can't they?
I think YouTube is like a wild stallion and the record industry is afraid of it. They can either shoot it dead (but that will just spawn more) or tame it and generate a steady income from it.
My work here is dung.
give me some of what they are smoking, zero revenues, zero profitability, zero commercial trade secrets/competitive edge.
for $500m I could replicate You Tube in 3 months.
dotbomb 2.0 - how short are peoples memories?
Dean Collins
www.Cognation.net
The trio of MySpace, Wikipedia and Youtube have been hyped up for a while (look at the alexa ratings, they are very similar but still small compared to the real titans Google and Yahoo). But consider they are mostly a 2005/6 fad. 2007 is when the bubble will pop.
.1 refering to patch to stop the hype and everything will be back to normal.
Wikipedia will pop in 2007 when more people discover the Wikitruth and enough college students fail their degree due to citing wikipedia in their papers. Wikipedia was a geek site anyway until Seigenthaler happened.
Youtube will get replaced by hundreds of other video sharing websites. There is only so many 79 year old men with a web cam. Once everybody has seen all the videos people will return to bit torrent for the copyrighted stuff and the video sharing sites will be mostly videos of their cats.
Myspace will crack as soon as all the emos get a life.
You heard it here first
In 2007. Web 2.1 will be launched, with the
The bandwidth costs for YouTube are $1bn a month so whoever buys it will need to make it produce revenues of at least that plus staff/infrastructure costs before they even think of recouping the purchase cost.
Scary.
I want a list of atrocities done in your name - Recoil
is to not have any money.
As soon as there is something to sue for they are gone.
They are just protecting thier business.
Roger Taylor (The drummer from Queen) wrote an excellent song about Rupert Murdoch, to be found on his 'Happiness' album.
Check out the Lyrics
And at least one giant, Universal Music, are threatening to sue the company if their artists' songs keep appearing there.
Collective nouns are treated as plurals, even if their construction suggests singular or uncountable.
As it stands right now, Youtube seems to be making a hellacious profit. Cnet estimated them at around $1 billion in value if bought, and the potential is there for much more. Any litigation can be easily handled, and bought off when you're worth that much. I forsee an out-of-court settlement between Youtube and a copyright holder, but ultimately won't hurt thier viability as a marketable asset. Warner and EMI are already on board to have music video's hosted, and that only makes Youtube more sellable.
I bring nothing to the table.
The GP is right, I could build a youtube clone in about a month, but what's the point if nobody looks at it.
Is it worth $1.5 billion for those people? Well the dollar is falling, that's inflation for you. You never know, perhaps potential buyers will make a lower counter offer.
Deleted
<Dr Evil> We will keep showing asians lip-synching Backstreet Boys unless you pay us... a kajillion trillion dollars!</Dr Evil>
I think there's some difference which could incline them not to sue after all.
If we describe peer to peer downloads vs. Youtube, they:
1. have a much higher 'ease to get' factor - you can download entire albums at a whim, and the bandwith is low. On YouTube you can at the most see one music video, which takes (at least some seconds more) to find, and it costs you bandwith bills. You can't get many at a time.
2. have a much higher 'satiation' factor - you can carry the song with you on a portable player very easily. Downloading videos from YouTube to watch is much less satiating, since it's cumbersome to save them, they take much more space, extracting the songs is messy, etc. Satiation, in the sense that you get bored of the song and find it less worth its listening time.
3. create much less 'attachment' - the industry does recognise that being 'exposed' to an artist makes you more likely to buy their songs, per all the promos and release of sample clips. Downloading songs does create attachment, they just think it's too little to outweigh loss in sales. Watching a music video (or a full album) takes a sliver more effort and creates a lot more attachment.
Pretty much, if I download a song through p2p, then in most cases I would see it as a bit wasted space on an album in the store. If I saw its music video and liked it, it would be a small positive attachment instead.
Of course, there's no guarantee they will think about this beyond a knee-jerk reaction..
While I understand that the price is set by the ability and willingness to buy on one and the willingness to sell on the other side, I just honestly ask where youtube's value is? What about it is "worth" 1.5b? Content? Hardly. Most of it is "rubbish". Rubbish that people watch, granted, but still mainly rubbish. Nothing you could syndicate, if only for copyright issues. Its userbase? How? They don't buy anything, they don't sell anything, they just hog the limelight in an attempt to gain 15 minutes of fame. Here today, gone tomorrow. Advertising capability? How? I never ever saw the youtube frontpage, and the video successfully distracts you from any flashy banners that could be on the page. Not to mention the convenient "leech the video" tools.
I'm honstly asking where youtube, as a name, content or concept, warrants 1.5b USD.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Which can be really dangerous. It might just backfire.
I had that experience myself, asking once for about 5 times the regular price on a service I really didn't want to execute. Guess what ? They said yes.
Moral of the history: if you are going to overprice so you get a "no", make sure your price is so high there is absolutely no chance they will say yes.
I should have asked 20x, not 5x. YouTube should be asking for $100bi is that is what they want (not to sell).
morcego
I'd take any offer over $50m. Youtube is Napster's legal problems with far less ground to stand on since they host the videos on their servers.
youTruck would be a much better name :p
of richest Americans to find out how much money they needed to get listed.
There are a lot of eyes looking at YouTube... supposedly 100 million videos watched a day. Even so I have my doubts as I feel the people that watch YouTube just want to watch videos and have no loyalty specific to YouTube. Admittedly they made web videos easy (no plug ins for QuickTime, Real, or MSN) and got people to embed videos on other sites. However I get the feeling that if YouTube craters due to copyright suits, or the company that buys them sticks ads all over everything, people will just start watching videos on some other site. So YouTube may be a good buy at first but then the parent company will inheret all their copyright problems and bandwidth expenses... so I feel the price is really high. I will predict it will be sold but for a much lower price. That said, if someone does buy YouTube for anywhere near $1.5 billion this will light a fire under Web 2.0 like Netscape's IPO in the ninetees. Welcome back the sock puppet and the chimps.
--------
Webomatica
Lisa: Wow, Dad, you're surfing like a pro!
Homer: Oh, yeah! I'm betting on Jai-alai in the Cayman Islands, I invested in
something called "News Corp"--
Lisa: Dad, that's Fox!
Homer: [shrieks] Undo! Undo! [hits key, sighs]
Thank you!
http://www.coderoshi.com/
At just $0.99m
With all the copyrighted material on YouTune, all you need is a few well calculated lawsuits.
I can see YouTube making a nice chunk of money, but 1.5 billion for a service that could easily be replicated doesn't seem realistic.
Even if YouTube lost a bunch of popularity, it would theoretically be left with at least *some* content it owned rights to. I thought part of their terms of service included the fact that they reserve the rights to whatever content you upload to them? Obviously, uploads of previously copyrighted works don't apply -- but there are probably loads of humorous "reality TV-esque" clips made by college students and the like that YouTube could sort though, package up, and resell.
Would that make them worth 1.5 billion? Nah... but it has some value you can't completely discount.
Which in turn represent US$43 000 000 000 000 000 in estimated lost sales.
or US$540 000 000 000 000 000.3 in lost profits
hey ! this is fun! US$230 002 000 100!
US$432 294 100! weeeeeeeeee!
Earlier this year a report about Google in the Economist claimed that some analysts felt that the high share price of Google was justified simply because they expected Google to end up with a minimum of 1% of the market for all internet distribution of video content. That was before YouTube caught on. Given that YouTube is now in a good position to grab onto a very large chunk of online video sales, and because many of YouTube's customers are young people who can easily be developed into a long-term loyal customer base, I think that 1.5 billion is a steal.
I support this attitude and would like to inform the potential employers I won't sell for less than $1.5 million.
"Blah blah blah." - [citation needed]
Look at how many groups are effectively making money off other people's copyrights. That may not be the declared intent of the websites like with Napster and such but the bulk of the business is copyrighted material. Yes so far they have yet to show a profit but that was always the intent and even though 1.5 billion is excessive they could probably get 500 mill and maybe even 750 mill for the company. Why is it okay for them to build a business off other companies material but evil for the copyright holders to do so? Seems like a double standard that weighs against anyone originating material. If I'm an artist creating a song or a movie why is it bad for me to sell it and wish to control the sales of my creation but okay for some one else to create a website and make money from providing my material to others? The middlemen already make the bulk of the money and now the artists are being told the middlemen should be the only ones allowed to make money. Trust me the distributors always make a profit but the artists rarely do these days. With film distributors they won't touch a film unless it's presold. A film maker has to take the risk of making the film with no guarantee he can sell the film so he could loose everything, both time and money. The geek community is backing the wrong horse. The distributors are the evil empire not the ones producing the content. One of the reasons for all the bad films is the distributors have too much control over what gets made and released. If it was purely market driven you'd see more good films. Most of the decent films are coming from independents but they are being starved out. Given the direction things are going in it will get drastically worse before it gets better.
It's about to go down in price. Google Video is about to release a new, less ugly version and then there's http://soapbox.msn.com/ and Live Video Search.
Slahdot is the fur coat.
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....
Considering the negatives involved, I'd take the risk and build my own YouTube network (with a shadow company) for 250mil. From a business standpoint, YouTube looks like the next PSINet.
Better yet, just create a simple site extension to iTunes for user content (hmm, iTV?), acceptable copyright monitoring and throw some bling Apple marketing behind it and a hook into myspace or similar--that sure settle this issue.
The Internet Archive, which is a nonprofit, is also in the free video archiving business. Their main concern has been storage, of which they now have petabytes. Making the system friendly to the casual user has been a lower priority, and the Archive has a tiny staff. But you can get an Archive account and upload your video right now. If you have anything of historical significance, please do so.
The Archive has had some problems with bandwidth, but they just moved to a new data center, and that's improving. Last year, they obtained an archive of Greatful Dead recordings, which can be played out as streaming audio. The Deadheads, with their short-term memory loss problems, would play the same stuff over and over again. This was sucking up most of the outgoing bandwidth and interfering with video playback.
The Archive will probably be around long after YouTube is gone. Among other things, there's a duplicate of the Internet Archive in Egypt.
Charge the actual amount that you'd be willing to do it for. If you weren't willing to do it for 5x then you should have asked for more.
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....
I'm pretty sure in 5 years it will be known by most as "Whotube? oh yeah that..." Longetivity sure is short lived in our modern web 2.0-sphere.
whoever pays 1.5b for that site, is going to need it!
the only permanence in existence, is the impermanence of existence.
Costs owed for excessive bandwidth = $400,000,000
Current value of impending lawsuits =$900,000,000
Payoffs to various politicians, judges and law enforcement = $150,000,000
Net value = $50,000,000*
* = value does not take into account private jets, ferarris, on-the-job chefs, Bawls dispensers or boardroom lapdances.
In America. From owning a restaurant in Eau Claire (Mandarin Club) to 1.5 billion asking price for a video hosting firm.
You go Steve!
So, which article did you try to post a pseudo-scientific bunch of mombo jumbo to?
Little Brother, watching the watchers
I only just noted the RSS feed truncated the title. I was all excited, expecting to read about how YouTube wouldn't sell for less than $1.
People are fundamentally fickle. YouTube isn't worth its price in marketshare because, like Napster, people change without second thoughts.
Organizations don't change, but people change.
Especially with Google in that domain, and they have $$$ to throw at legal content.
No, zero percent of the content violates copyright laws.
Copyright protects expression, not content.
Perhaps 90 percent of the expression, the video, is someone's copyrighted work.
1. It's a really, really shitty site populated mostly by teenage morons
2. It's probably a liability because OMG STALKERS SOMEBODY THINK OF THE CHILDREN
I like getting modded down when I'm right. It means I really am getting on someone's nerves. Thanks for confirming that I had a point, there.
My book, podcast
[sarcasm]
The USians are still vulnerable from events President William J. Clinton failed to mend. He didn't have a solution because he was distracted by Monica Lewinsky.
[/sarcasm]
For the perspective, consider Circular Reasoning, and all the evidence Democrats are the cause.
without prejudice