Is YouTube Doomed? YouTube is on track to lose roughly $470 million in 2009 - High-Def Digest Forums
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Old 04-09-2009, 06:41 AM
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Default Is YouTube Doomed? YouTube is on track to lose roughly $470 million in 2009

http://www.businessinsider.com/is-youtube-doomed-2009-4

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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. Proponents of online advertising argue that increased understanding of the medium will lead to more advertising dollars at better CPMs, lifting all boats in a sea of monetization. In the short term, however, neither celebrity presidents, a rabidly growing customer base, nor a brand which has in three short years injected itself into the global cultural lexicon can forestall the inevitable: YouTube is soaring towards the future like a pigeon towards a plate glass window.

The problem lies with the bean-counters. 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. Even Eric Schmidt, talking to the New York Times about the YouTube acquisition, was quick to say that, going forward, Google would “be more careful with potential large expense streams, which are of uncertain return.”
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Old 04-09-2009, 07:39 AM
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and ????

and so what ???


who actually cares what happens with YouTube ?? it has nothing to do with HiDefinition - ADDED - do you actually BUY anything off YouTube ???? Purchase any Blu-rays or DVDs from it ??


If anything - it was the GREED of the past few years where GOOGLE spent $1.65 BILLION on YouTube.

So - do you CLICK on the adverts - to help out poor Google to pay its bills on this expensive folly ??

How many YOUTUBE videos do you watch each day ?? or even bother watching ??? Gee - another kid doing something stupid, or someone has used their phone to capture someone falling over.

Its just another example of the greed and money that has been spent by corporations in the past few years to achieve something that was probably never achievable - gaining profit thru web advertising.

Go on.... go to Youtube now.. and CLICK on one of those advertising links...... Google desperately NEEDS the money

FROM YOUR ARTICLE LINK
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One thing is clear: 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.
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Old 04-09-2009, 07:53 AM
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It's a bandwidth cost thing. Because they recently added better quality streams (iphone uses them), their bandwidth costs have gone up. Some of that could be new equipment they had to buy, which means they may not incur the same costs lter this year. However, a chunk of that operating cost has to be bandwidth and/or storage related.

When it comes down to it, noone has come up yet with a consistent formula for actual real costs /GB of network traffic that has to be paid somehow.

Youtube is paying for this bandwidth directly since they are serving video, contrast that with the sneaky vudu, who rely on the p2p way to get their customers to deal with the bandwidth issue themselves.

Youtube could change to a p2p mode - that should reduce their bandwiodth costs.
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Old 04-09-2009, 09:12 AM
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Kinda relevant in that if YouTube can't make money then other downloading streaming sites may have an issue. It also highlights the fact that Internet media competes with free.
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Old 04-09-2009, 09:36 AM
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Originally Posted by tonyjg View Post
and ????

and so what ???


who actually cares what happens with YouTube ??
It's relevant because of the number of posts we have seen in the past stating that Blu-ray is doomed or just a stop gap measure because the future is streaming and digital downloads.

If YouTube as the biggest name in streaming media in the US are loosing so much money then what does that say for all the smaller streaming companies.
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Old 04-09-2009, 09:45 AM
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Originally Posted by Kosty View Post
Kinda relevant in that if YouTube can't make money then other downloading streaming sites may have an issue. It also highlights the fact that Internet media competes with free.
In fairness, for the founders, youtube is already wildly successful. They sold youtube to GOOG for $1.65B.

The concept of youtube was brilliant, and the execution by the founders were flawless. It's only as a going concern (basic P&L) that youtube has a problem. This is typical of dotcoms.

The fact that GOOG is a bagholder of such epic scale now means that youtube will join the history books on the best dotcom stories. Those three kids robbed GOOG blind.

I'm still trying to figure out how they can grow ad revenue by 200%. It doesn't seem possible even in the best of times, let alone now.
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Old 04-09-2009, 09:58 AM
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It is only a matter of time before Youtube will have to charge to gain access to some or all content in order to make money. I believe Hulu will do the same thing, and that Netflix will start charging for streams.

This whole free downloading thing reminds me of:
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Old 04-09-2009, 02:35 PM
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Hmm I wonder how Youku does it..
http://en.wikipedia.org/wiki/Youku
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Old 04-09-2009, 02:37 PM
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Quote:
Originally Posted by ack_bak View Post
It is only a matter of time before Youtube will have to charge to gain access to some or all content in order to make money.
Sony, Google’s YouTube In Talks to Put Full-Length Films on Web

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April 9 (Bloomberg) -- Sony Corp.’s entertainment division said it is in talks to post movies on Google Inc.’s YouTube video-sharing Web site.

“We are having conversations with YouTube,” Paula Askanas, a spokeswoman for Sony Pictures Television in Los Angeles, said yesterday in an interview. She declined to provide additional details.

No major U.S. movie studio posts full-length films on YouTube. Sony Pictures offers 60 older films, including “Stripes” and “Groundhog Day,” as well as vintage television shows, at its Crackle.com Web site. Hulu.com, whose owners include NBC Universal Inc. and News Corp., shows advertising- supported full-length movies.

Hollywood studios, under attack from film piracy, are trying out older movies on the Internet as they search for ways to accommodate viewers’ changing demands without cutting into revenue from DVDs and pay-television. By putting content on YouTube, the Internet’s most-viewed video site, studios gain access to a larger audience.

“YouTube can help promote their videos,” Jeremiah Owyang, an analyst at Cambridge, Massachusetts-based Forrester Research Inc., said in an interview.

YouTube wants “more high-quality content,” Owyang said. “They really want to up their game.”

Chris Dale, a spokesman at San Bruno, California-based YouTube, declined to comment yesterday on talks with Sony or any other studios for feature films. The Web site already carries long-form content from independent filmmakers, Dale said.

Professional Content

Google, the Mountain View, California-based company that also owns the most-used Internet search engine, rose $3.35 to $362 yesterday in Nasdaq Stock Market trading. The shares have gained 18 percent this year. Sony’s American Depositary Receipts fell 28 cents to $23.36 and have increased 6.8 percent this year.

YouTube, mostly filled with user-generated content, is seeking agreements with film and television studios to add clips of professionally produced programs.

“They want to move out of their Webcam scenario and more into the Web TV category,” Owyang said. “The more content they can index, the better.”

CBS Corp., controlled by Sumner Redstone, puts clips and full television episodes from its broadcast network and from the Showtime cable channel on YouTube. Walt Disney Co., based in Burbank, California, last week agreed to put ABC and ESPN clips on YouTube.

Mainstream advertisers prefer professionally produced content to home video. YouTube shares revenue from advertisements that appear alongside those clips.

Viacom Inc., also controlled by Redstone, is suing Google for allegedly not removing copyrighted material from YouTube that users posted from the company’s Comedy Central and MTV cable channels and its Paramount film studio.

Sony, based in Tokyo, and the world’s second-largest consumer-electronics manufacturer, acquired Crackle, then a video-sharing Web site called Grouper, in August 2006 for $65 million.
Fitting that Sony would be the first major studio to hook up with youtube...

Quote:
Originally Posted by ack_bak
I believe Hulu will do the same thing, and that Netflix will start charging for streams.
Speaking of Hulu...

Disney-Hulu Deal Done (DIS)

Quote:
A deal to bring Disney into the Hulu fold is "basically done," a single source familiar with the discussions tells us.

PaidContent reported that if Disney were to do a deal, it would take a 30% stake in Hulu and become and equal partner to NBC Universal and News Corp. That means like NBC and News Corp before it, Disney would agree to spend $50 million marketing the site.

Providence Equity Partners will hang onto its 10% share.

YouTube, which is launching a premium content-friendly version of its site April 16, made a hard run at Disney at the 11th hour, but only managed to come away with short form content.
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Old 04-09-2009, 03:27 PM
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Originally Posted by mikemorel View Post
Sony, Google’s YouTube In Talks to Put Full-Length Films on Web



Fitting that Sony would be the first major studio to hook up with youtube...
Yes they are in talks with Youtube to host old movies there. You think Sony is doing this for free or do you think YouTube is going to pay for that content? My guess? Sony is going to make some money here. Whether that be a direct payment or proceeds of any ad revenue that is recognized from their movie viewing.

In other words. YouTube could lose even more than $470 million this year if this deal goes through.

Quote:
Speaking of Hulu...

Disney-Hulu Deal Done (DIS)
Yep. And just like I said, it is just a matter of time before Disney, Fox, NBC, etc all start charging you money to watch their content. At least for select content.

I know you like to get all your content for free Mike, but these content providers are out to make money. Hulu, Netflix streaming, YouTube, etc are all in the infancy/BETA stage. If enough people start moving away from paid content (ie cable/sat/optical media/paid downloads) to watch movies on free sites, the content providers will do something about it. Like charge you a per view fee or a monthly fee.

I know you cannot understand this, but that is the reality.
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