That's remarkable. There are a number of other, smaller (but still big) sites which function in the same way. Daily Motion, for example. They can't be bleeding money. What are they doing that YouTube isn't. Investigate it again!
Also, I never did get the memo which explains why Google Videos sends users to all these sites other than YouTube. Disinterestedly indexing the web, I suppose.
Kim, back in ye olde 2009 one of our ThinkerNetters set out to do the work and find out just how much it was costing Google to host YouTube, and the answer was that the company was losing $1.65M/day on it. I'm sure there would be an updated figure now, but Google hasn't nailed down the perfect revenue model since then, and you can bet that if they were having financial success with YouTube we'd hear about it. Google is anything but modest!
A belated question, I suppose, but why isn't ad revenue sufficient? There are certainly plenty of ads. Is YouTube, even with the content being provided free by users, so expensive to host?
It may not be a goldmine, but I am surprised it's bleeding cash.
Re: "But that kind of strategy costs a lot of time and money. Why would Google spring for it, if it could throw out the line, see who bites, and haul it back in if need be, leaving users scratching their heads?"
Hey, this works for me if this is the strategy Google prefers, as it allows our points to be proven right time and time again! I personally think the time has come and gone to turn YouTube into a profitable medium... but it's fun to watch Google try.
Agreed, Nicole. It would be better for Google/YouTube to start a separate business specializing in rentals, one that leverages the YouTube brand without blending with it confusingly.
But that kind of strategy costs a lot of time and money. Why would Google spring for it, if it could throw out the line, see who bites, and haul it back in if need be, leaving users scratching their heads?
YouTube has a business model. It's: "If you collect enough vomit in a bucket, the Law of Averages dictates that someone will eventually come up to you and offer to pay you for doing such a good job collecting vomit."
Note that this is different from the most common social networking startup model, which is: "If you collect enough vomit in a bucket, the Law of Averages dictates that someone will eventually come up to you and offer you $10 billion for the bucket."
Well here we have a perfect example why figuring out a business model should NOT be an afterthought. Among many other problems Google now has with YouTube, it has a huge rebranding problem. What is YouTube? YouTube was never branded as a rentals service, and getting users to think of it as such is going to be a really hard sell because that's not what it is. Coming along at this point, this late in the game, and saying, "we're also going to add this service because we'd like to stop bleeding cash" (paraphrasing) isn't enough to change users' view of the service.
The media exec continue to swing between the ad sponsored content and rentals but I have a feeling that an in between approch is the best solution for their misery.Ad sponosored content are too irritating while rentals price are not affordable for many a pockets.
Agreed, Kim. It seems that YouTube rentals could wind up being relatively ineffective - or worse, confusing -- to users of the site.
I haven't been impressed with the way Google has handled YouTube. I'm not impressed with Google's business planning at all. So why should I have faith in this particular move?
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