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  1. #1
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    YouTube Is Doomed
    Despite massive growth, ubiquitous global brand awareness, presidential endorsement, and the world’s greatest repository of illegally-pirated video content, Google’s massive video folly is on life-support, and the prognosis is grave. Believers would have us think that Google (GOOG) will sustain YouTube, indefinitely if necessary.

    .........

    According to a report by Credit Suisse, YouTube is on track to lose roughly $470 million in 2009. No matter Google’s $116 billion market cap: a half-billion dollar loss on a single property, even one as large as YouTube, is a bitter pill to swallow.

    ..........

    YouTube cannot maintain its current course and remain a going concern. Google can continue to fund the experiment for a period of time, but at some juncture, shareholders will ask hard questions about why Google is sacrificing half a billion dollars to support a project whose chances of providing a return, at any point, is dubious at best. Advertising cannot solve the problem, at least not in its current form, and not in the near term. With a diminishing field of options, a massive, growing, cost center, and an economy in recession, Google will need to make some hard decisions about the future viability and business model of its prodigal child. Source
    One of the most popular answers for putting YouTube in the black is to remove all the user-generated content - Isn't that what grew the damn thing into what it is today?
    Continued Success,

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  2. #2
    http and a telephoto
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    Quote Originally Posted by Haiko de Poel, Jr.
    One of the most popular answers for putting YouTube in the black is to remove all the user-generated content - Isn't that what grew the damn thing into what it is today?
    Exactly. Podango disappeared with all their user generated content, YouTube can do the same.

    I am not sure *why* it loses so much money, but maybe they need to "police" the posting of copyright protected material better. The current advertising attempts don't work because people go to watch videos, not to click on ads. Weren't they working on a way to allow people to sell access to their videos? Taking a cut of that, being the "etsy" or Cafepress of video content could be an answer.
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  3. #3
    ABW Ambassador Doug247's Avatar
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    Man I really hope they can get something figured out. As a musician I enjoy browsing others covering stuff like Rush and Led Zep.
    Thanks,
    Doug

  4. #4
    Prince of Content Vinny O'Hare's Avatar
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    Youtube wont be going anywhere, that money lost is chump change to Google. Once it figures out how to monetize it, it will bring in serious money.
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  5. #5
    Domain Addict / Formerly known as elbowcreek Thomas A. Rice's Avatar
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    At this point, if they charged a small annual fee, it would help them out in a number of ways:

    1. Filter out those who can't spend money.
    2. 100 million people paying $10 a year puts them well into the black.
    3. By filtering out those who won't spend money, you also significantly reduce bandwidth costs.
    Following everyone else is a GREAT way to become average.

  6. #6
    Affiliate Network Rep John@AffiliateFuture.com's Avatar
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    another option would be to charge people who upload content similar to what flickr does with their pro model. the site wouldn't be what it is without all of the user generated content but if you want to submit more than the basic clip or occasional photo (in flickr's case) you gotta pay...

  7. #7
    ...and a Pirate's heart. Convergence's Avatar
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    Be interesting to see how their overhead is laid out. $470 million LOSS is huge - means their overhead is greater than $470 million (as they have to have some sort of revenue).

    EDIT: Just saw in the article:

    Credit Suisse estimates YouTube will manage to rake in about $240 million in ad revenue in 2009, against operating costs of roughly $711 million, leading to a shortfall of just over $470 million. This half-billion dollar loss comes after more than a year of feverish experimentation in various forms of advertising, cross-product embedding, licensing and partnership deals.
    Salty kisses, Sandy toes, and a Pirate's heart...

  8. #8
    ABW Ambassador Rehan's Avatar
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    Quote Originally Posted by loxly
    I am not sure *why* it loses so much money, but maybe they need to "police" the posting of copyright protected material better.
    According to the original report, of the $711 million in expenses, $360 goes to bandwidth and $265 to content licensing... Labour is probably a much smaller portion.

    I agree that Youtube won't be biting the dust anytime soon. They've still got plenty of other ways to monetize it before they resort to killing it off.
    --

  9. #9
    ABW Ambassador meadowmufn's Avatar
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    They should just have monthly subscriptions for video submitters that are tiered based on the number of videos they want to host there, with the most basic accounts being free (say, 3-5 videos). If I had a dozen or so videos I wanted to share there, I'd have no problem paying a monthly subscription.
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  10. #10
    ABW Adviser Panel Dynamoo's Avatar
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    Monetisation is a problem on YouTube, I get about 8k - 10k views per day, but there are only a tiny handful of videos that I am eligible to run ads on. For example, if I'm talking about a product, by the letter of the YouTube partner agreement I have to take all the photos myself rather than use press images.
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  11. #11
    ABW Ambassador Sam Bay's Avatar
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    Quote Originally Posted by Dynamoo
    Monetisation is a problem on YouTube, I get about 8k - 10k views per day, but there are only a tiny handful of videos that I am eligible to run ads on. For example, if I'm talking about a product, by the letter of the YouTube partner agreement I have to take all the photos myself rather than use press images.
    Yes, before youtube makes money, google should ensure that video publishers make money from their videos so they're motivated to put out content good enough that people won't mind watching TV-style ads in them. Those rolling adsense ads in bottom are annoying, to say the least. They should adopt hulu-like advertising, and also offer content related ads for smaller advertisers.

    Youtube has very good technology, a great brand and enormous reach (even the president uses it). All they got to do this improve quality and find that advertising balance. They certainly got much better chance than twitter

  12. #12
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    I always wondered how much google made off of adsense ads surrounding youtube videos embeded on 3rd party sites.

  13. #13
    Half a Bubble Off Plumb RemodelingGuy's Avatar
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    Perplexed
    I'm perplexed.

    HOW IN HADES could they lose such a huge some of money???

    They must have staff overseeing staff, overseeing staff, overseeing staff and so on ..... Fire somebody all ready.

    If they are losing buckets of cash, there has to be a reason.

    Charge for the business and how-to videos.

    They are priceless if used correctly by the advertiser ( video maker ) and they are giving it away for free.

    I use the how-to's all of the time.

  14. #14
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    I would guess bandwidth no employees. Google has always been light there. People like to Bandwidth after such an amount is free, but it isn't - it is just so large you can't comprehend it.

    As we see with some cable operators capping bandwidth, bandwidth has a breaking point.

  15. #15
    Full Member TerriFalcone's Avatar
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    I don't see why they can't charge a nominal fee for postings. We might not get those occasional wonderful performances by very young musical talents in the developing world and that would be a pity but a lot of kids from Los Angeles to Tokyo still have a bit a disposable income.
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  16. #16
    ABW Ambassador Joshua's Avatar
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    I'd have to think that one of the things driving them further into the red is the free HD videos. Uploaders don't have to pay to provide the higher quality, and viewers don't have to pay to watch it, while at the same time costing Google more money.

  17. #17
    ABW Ambassador danay's Avatar
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    I dunno about that. I suspect pirated content is a major pull for people who visit youtube, and charging for uploads would take the anonymity factor out, which would mean less pirated content and less visitors.

    maybe, maybe not.



    Quote Originally Posted by John@AffiliateFuture.com
    another option would be to charge people who upload content similar to what flickr does with their pro model. the site wouldn't be what it is without all of the user generated content but if you want to submit more than the basic clip or occasional photo (in flickr's case) you gotta pay...
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  18. #18
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    YouTube needs to go to a model like flickr or PhotoBucket. You can use the service for free but the images you upload can be dowloaded only so many times a day. Likewise, YouTube could limit the times a video is viewed, the quality of the video and the length of time the video can be for the free portion of the site, while paid content providers could have unlimited views, HD video and longer video times.

    I don't know how many times I've heard people complain about the 1gb/10 minute limit on videos... I'm sure some of them would be willing to pay, especially someone promoting themselves/their website/blog/etc.

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