Slashdot Mirror

← Back to Stories (view on slashdot.org)

Google Losing Up To $1.65M a Day On YouTube

Posted by timothy on from the lancelot-galahad-and-I-Jump-out-of-the-rabbit dept.

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."

10 of 290 comments (clear)

  1. Garbage In, Garbage Out by eldavojohn · · Score: 5, Interesting

    Content Acquisition - $710,000
    Revenue Sharing - $66,000
    Administrative Costs - $252,000

    I might be able to see the bandwidth costing a million dollars a day but could someone explain how Credit Suisse and comScore came up with these numbers?

    --
    My work here is dung.
    1. Re:Garbage In, Garbage Out by Anonymous Coward · · Score: 1, Interesting

      Credit Suisse - would love to have disclosure to know if they shorted GOOG before posting this 'analysis'

  2. it is worth it by acidrain · · Score: 3, Interesting

    YouTube positions Google to try and be the next iTunes, to turn Android into the next iPhone and be the place where video and audio providers need to be to sell their content. I'm sure Google knows this and considering the economic realities of the day are looking at ways to move in on Apple. I mean really, why else would they be burning that much money folks. There has to be more of a plan when it comes to Google and media than to spend 5 billion waiting for bandwidth to become cheaper.

    --
    -- http://thegirlorthecar.com funny dating game for guys
    1. Re:it is worth it by h3llfish · · Score: 3, Interesting

      The whole thing reminds me of Yahoo's acquisition of broadcast.com. In 2001 (or so) Yahoo figured that the world was very nearly ready to get all of their video online, and that someone was going to get astonishingly rich providing it to them.

      Of course, most observers now think that Yahoo flushed a massive amount of dough down the drain. Even today, no one is making huge dough selling video online, although several companies are still trying.

      Years later, Google repeats the error. In fact, Google is repeating several of Yahoo's errors, and I expect will share a similar fate: rapidly decreasing relevancy, but enough strong core businesses to keep chugging along, hoping to stumble into a new cash cow.

      If a company has a huge pile of money, they can keep throwing darts at a board until they hit the domino, and the whole house of cards tumbles... Checkmate!

  3. the search could stand some improvement by Presto+Vivace · · Score: 3, Interesting

    And I think The Onion said it all.

  4. Re:to put in perspective by Shakrai · · Score: 3, Interesting

    That's around $185 per second. That's quite a bit.

    Not really. GM is losing around $540 per second if you break out the $4,200,000,000 quarterly loss they posted. Youtube's only problem is they aren't losing money fast enough to justify stealing money from the citizenry to stay afloat......

    --
    I want peace on earth and goodwill toward man.
    We are the United States Government! We don't do that sort of thing.
  5. A D V E R T I S I N G by p51d007 · · Score: 1, Interesting

    Just do like a lot of other websites do. Insert a 30 second commercial that you can't skip through (like you use to be able to), before you allow the video to play.

  6. Re:REALLY now? by AmiMoJo · · Score: 5, Interesting

    Youtube isn't failing at all. It has become the number one video site.

    Sure, it is loosing money today. But tomorrow, bandwidth and storage will be cheaper, and Youtube will still be number one. They got in early and conquered the market.

    --
    const int one = 65536; (Silvermoon, Texture.cs)
    SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
  7. Re:Youtube and the death of the advertising model by digitalgiblet · · Score: 3, Interesting

    I'm more optimistic about the survival of something like Hulu. They have ads you cannot skip, but they usually have FEWER ads than the same show when broadcast.

    We are still in the early stages of figuring out how business models will work in the Internet world.

    The cost of distributing content has fallen so dramatically that it is practically zero (or gets closer each day), but although the cost to produce content has fallen, it has not fallen by the same orders of magnitude.

    As a generalization I'd say most Internet users prefer something free to something with a cost of a fraction of a cent IF the free item is perceived to have at least 25% of the quality of the non-free item.

    Quite a conundrum. You can't spend millions of dollars to produce something that will not yield more than you spent. The puzzle is how to get someone to pay (consumer? advertiser? government? alien illuminati?)

  8. Re:REALLY now? by Anonymous Coward · · Score: 2, Interesting

    Bullshit.

    Granted, there is a lot of "noise" to filter out on youtube because of the people who use it as a video journal or blog. But I think the home-made stuff is what is appealing. The DMCA-protected copyright owners can pay for their own video hosting for all I care.

    I go to youtube to see videos of people's RC car mods or other such DIY crap, not commercial videos.