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Google Losing Up To $1.65M a Day On YouTube
An anonymous reader writes "The average visitor to YouTube is costing Google between one and two dollars, according to new research that shows Google losing up to $1.65 million per day on the video site. More than two years after Google acquired YouTube, income from premium offers and other revenue generators don't offset YouTube's expenses of content acquisition, bandwidth, and storage. YouTube is expected to serve 75 billion video streams to 375 million unique visitors in 2009, costing Google up to $2,064,054 a day, or $753 million annualized. Revenue projections for YouTube fall between $90 million and $240 million."
Maybe this is in part because, as Al writes, "Researchers from HP Palo Alto studied videos uploaded to YouTube and found that popularity has little to do with quality or persistence."
Youtube is failing because all of the stuff worth watching was coincidentally all the stuff they removed for DMCA-related reasons.
On top of that, the few videos that I like that they didn't remove are much harder to find using the new search system. When I youtube, I'm looking for something specific and I don't want to have to wade through hundreds of teenagers' insignificant opinions, cretinous hammy behavior, or unimaginative video collages.
The "you" in Youtube will be the death of it.
Isn't the simplest answer the Google made a mistake? They originally came up with a novel way to do search and have made a ton of money off of it. It doesn't mean that everything they do is genius.
Honestly, looking at Google's repertoire of products, most of them don't make money. Only the advertising seems to.
Which is as long as Google can stay on top as search engine king, they can fund these unprofitable pieces of software, be it Chrome, or Gears, or Docs, or whatever... but if they slip in ad revenue, or they have a couple of shitty quarters, I can see some big trouble for Google.
Say what you will about MS, but they have profit centers throughout the company, and have a hoard of cash to boot. Not a bad idea for Google to follow suit in.
The price is always right if someone else is paying.
Obligatory Zapp Brannigan (Futurama) quote... "If we hit that bull's eye, the rest of the dominoes will fall like a house of cards. Checkmate."
No they wouldn't. Google has an estimated $15.85B cash on hand, at least as of Dec 31, 2008. (http://finance.yahoo.com/q/ks?s=Goog) At a rate of $2M a day, they have enough cash to last them more than 21 years, and that's if they don't bring in a single dollar in the meantime.
Jealously hoarding mod points since 2007.
Sure it does.
Total cost/visitor= $1-$2 /day = ~1,027,397 ( 375MM / 365 )
Total visitors
Total cost/day = $US 1,027,397 - 2,054,794
The article says up to $1.65 million per day which, on high traffic days, that users/day number is obviously higher. If you take the revenue projections then you get, on the high end, $US 712,328/day and on the low end $US 246,575/day.
2,054,794 - 246,575 = 1,,808,219.
So you're right, the article is wrong. YouTube could be losing up to ~ $US 1.8MM / day.
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So stuff that a big huge corporation put together and protects with draconian copywrite a DMCA is only worth it? Individuals can't come up with good ideas and offer them for free?
Here are 2 examples that completely blow that out of the water:
http://www.youtube.com/user/davidspates
http://www.youtube.com/user/Peacer
And the second guy recently got a job with some major media group because of the talent he showed on youtube!
Here's another example, but it may not be to everyone's entertainment tastes but you can't dispute the quality of the actual animation is great:
http://www.youtube.com/user/MondoMedia
And here's some "big media" content actually provided without those draconian restrictions:
http://www.youtube.com/user/BritainsSoTalented
http://www.youtube.com/user/JanisDigitalMedia
The first one is the most subscribed channel on youtube. The second is content for a local radio station in philly. I find both of these sub par compared to the previous links, but hey people want to subscribe to them, and the owners must be leveraging some kind of success out of them.
So I directly challenge that the assertion that the only good stuff on youtube is the stuff taken down by DMCA. I think the only stuff you ever bothered to look for was stuff you already saw on TV.
Oh... and did you forget the Monty Python channel? If you don't think that's worth it, then I demand Taco ban your IP immediately for proclaiming such heresy!
"All great wisdom is contained in .signature files"
There is no other organization in the world that cares more about Google's expenses than Google. If Google was in fact drowning itself in expenses that it couldn't possibly recoup then it would never implemented youtube's support for high definition clips. I mean, why would they implement a feature that in the end is nothing more than implementing the exact same service while spending about 4 times the bandwidth?
Moreover, it's somewhat amusing how someone can proudly claim that someone is spending millions while at the same time confessing that it is basing his calculations on absolutely zero hard facts or figures. They don't know how much google earns from youtube, they don't even know the order of magnitude Google's bandwidth expense is in. Yet, they try to calculate things.
It starts to get really silly when their calculations, based on nothing more than whims and assumptions taken out of thin air, are presented as $1,406,720 or $1,659,945. That means that they present a result which is the fruit of pure imagination in the form of a number with 7 significant digits. I can't measure anything with that kind of exactness even if I'm holding it in my very hands. Impressive.
To sum things up, nothing to see here.
Slashdot, fix your code or at least hire someone who is competent at it to do it for you.
Cheap-cheap-cheap(Cogent, HE, etc.) bandwidth at commits larger than 1 Gbps are around $4-6/Mbps single-homed. I don't care who you are: even with a 50 Gig commit you're still looking and $8-10/mbps for a decent multi-homed BGP mix.
With the high-quality vids they are posting, $1-$2/visitor could be very real. I do own an ISP so take my word on these numbers, the figures I used are current as of this month.
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Is it still obligatory if it's a comic that doesn't get linked very often?
http://www.giantitp.com/comics/oots0135.html/
But maybe I shouldn't link to them, their servers are notoriously slow.
they don't need to be. bandwidth is expensive. Too many people see "unlimited" cable and dsl connections and think that they understand what the costs involved are. Only now when companies are capping broadband throughput, and people are like "lolquetf?", are we seeing any discussion on it.
Bandwidth is expensive. No, it's not getting cheaper because our needs are growing faster than the cost/value the technology provides.
And no, you can't get unlimited storage and unlimited transfer for $5/mth. You get unlimited so-far-as your speed is reduced to 5KB/sec and can only store .txt files with a limit of 1000 files. You can have all the unlimited 5KB/s downloads you want....welcome to unlimited flavor country!
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loose != lose
And what would you use?
Veoh, for instance, started putting unskippable ads at the beginning of some videos. Megavideo went farther and put a 72-minute limit on watching video before you have to take a 54-minute break, unless you pay.
We can see that YouTube's competitors are starting to put in more ads and restrictions, so YouTube has an opportunity to follow suit and scrape in some more cash.
However, perhaps Google is thinking long-term and values visitors over revenue. It might be a sort of investment - keep the videos free-to-watch and their beginnings unskippable-ad-free, then try to rake in cash with more ads once YouTube becomes popular enough and other sites become restrictive enough in comparison.
Member of the 7 Digit UID Club
RTFA. The 1.65M$/day figure is $2M/day in operating costs minus $0.35M/day revenues from the site (third-party estimates, so yeah, YMMV). It's not "revenue they never had," it's operating costs that are not recovered from revenues.
Are you adequate?
Hulu's player is also complete crap. I need to be able to watch my show without having it constantly rebuffer.
Sure it's the player and not your connection? Mine rebuffers occasionally, but not terribly frequently.