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Google Losing Up To $1.65M a Day On YouTube

timothy posted more than 5 years ago | from the lancelot-galahad-and-I-Jump-out-of-the-rabbit dept.

Media 290

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."

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REALLY now? (4, Funny)

courseofhumanevents (1168415) | more than 5 years ago | (#27572633)

"Researchers from HP Palo Alto studied videos uploaded to YouTube and found that popularity has little to do with quality or persistence." Let me be the first to say "I told you so."

Re:REALLY now? (4, Informative)

Ethanol-fueled (1125189) | more than 5 years ago | (#27572753)

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.

the search could stand some improvement (3, Interesting)

Presto Vivace (882157) | more than 5 years ago | (#27572801)

And I think The Onion [theonion.com] said it all.

Re:REALLY now? (5, Insightful)

Opportunist (166417) | more than 5 years ago | (#27573007)

Youtube is failing because all of the stuff worth watching was coincidentally all the stuff they removed for DMCA-related reasons.

And how exactly did they generate revenue before the DMCA takedowns?

Re:REALLY now? (0)

Anonymous Coward | more than 5 years ago | (#27573175)

Wouldn't that mean that people would stop going to YouTube, thus decreasing their bandwidth costs? Sure, it wouldn't be profitable, but that doesn't appear to be the issue. Also, I don't disagree that YouTube has probably decreased in popularity due to the removal of those videos, but I don't think this is really related to what's being discussed here. The real question is why they can't make up the ad revenue with so many visitors. I'm sure there's a reasonable answer, but I'm just not well-versed enough in the land of web advertising.

Re:REALLY now? (4, Insightful)

frieko (855745) | more than 5 years ago | (#27573341)

But is Youtube actually failing? Or is $2m a day money well spent when it comes to keeping the word 'Google' on the tip of everybody's tongue? /thinkingoutloud

Re:REALLY now? (5, Insightful)

Bert64 (520050) | more than 5 years ago | (#27573397)

And is that based on what google pays for the bandwidth, or what anyone else would have to pay for it? Considering google with their size and scope basically get bandwidth for free because it's in everyone's interest to peer with them.

Re:REALLY now? (4, Insightful)

Idiomatick (976696) | more than 5 years ago | (#27573351)

Well. I agree that the DMCA BS is terrible. But I don't think that has any bearing on their profit margin. If they are losing money per view... DMCA is probably saving them money by slowly killing youtube. I understand your aggression but clearly it is misdirected.

Re:REALLY now? (5, Interesting)

AmiMoJo (196126) | more than 5 years ago | (#27573519)

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.

Re:REALLY now? (5, Funny)

eldavojohn (898314) | more than 5 years ago | (#27572763)

"Researchers from HP Palo Alto studied videos uploaded to YouTube and found that popularity has little to do with quality or persistence." Let me be the first to say "I told you so."

The researchers found some very useful information though--like the fact that a man getting kicked in the testicles is just as funny or maybe even more funny in grainy home video than in high definition. After performing principal component analysis on several testicle injury clips rated across thousands of users, they found--surprisingly--that the most important variables are (1) how wide the victim's eyes opened upon impact, (2) how loud of a scream the victim emitted upon impact and (3) how long the victim lay motionless on the ground after initial agony.

Re:REALLY now? (1)

cbiltcliffe (186293) | more than 5 years ago | (#27572769)

That was my first thought, too.

Just as the majority seem to have an appetite for garbage television, and garbage music, they also have an appetite for garbage Youtube videos.

Yes, I'm being pompous, condescending and arrogant. Got a problem with it?

Re:REALLY now? (4, Insightful)

eldavojohn (898314) | more than 5 years ago | (#27572841)

Yes, I'm being pompous, condescending and arrogant.

I believe the word you were looking for there is "subjective."

Got a problem with it?

Not really. As long as you don't try to push your ideas on me and demand YouTube focus on your personal priorities and tastes in video, everything is fine and I encourage you to express your opinion.

Re:REALLY now? (1)

maxume (22995) | more than 5 years ago | (#27572899)

You aren't very good at it, so yes, I do have a problem with it.

Re:REALLY now? (1)

ArcherB (796902) | more than 5 years ago | (#27573067)

That was my first thought, too.

Just as the majority seem to have an appetite for garbage television, and garbage music, they also have an appetite for garbage Youtube videos.

Yes, I'm being pompous, condescending and arrogant. Got a problem with it?

Garbage television? You mean this [wikipedia.org] ?

Garbage Music? Like this [rollingstone.com] ?

If so, then Yes! I do have an appetite for Garbage.

A D V E R T I S I N G (1, Interesting)

p51d007 (656414) | more than 5 years ago | (#27572919)

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.

Re:A D V E R T I S I N G (1)

cronco (1435465) | more than 5 years ago | (#27573065)

Cause that would SURELY make people stay with youtube and not find some other, non-commercial ridden site.

Garbage In, Garbage Out (5, Interesting)

eldavojohn (898314) | more than 5 years ago | (#27572637)

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?

Re:Garbage In, Garbage Out (1, Insightful)

ZenDragon (1205104) | more than 5 years ago | (#27572739)

"The average visitor to YouTube is costing Google between one and two dollars" I could understand that Google might be losing money on youtube, but the above statement is just absurd. Just because you can devide total cost by number of users doesnt make that number mean anything.

Re:Garbage In, Garbage Out (2, Informative)

teknopurge (199509) | more than 5 years ago | (#27573265)

Sure it does.

Total cost/visitor= $1-$2
Total visitors /day = ~1,027,397 ( 375MM / 365 )
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.

Re:Garbage In, Garbage Out (1)

Idiomatick (976696) | more than 5 years ago | (#27573489)

It doesn't matter 1~2$ per user per day is a complete lie. Maybe like.... 1$ per user per month. Google buys bandwidth in bulk. at 1~2$ per person per day the average person would have to have FIOS and stream youtube videos 24/7. So lets say they meant 1~2$ per month and aren't complete idiots.

Re:Garbage In, Garbage Out (0)

Anonymous Coward | more than 5 years ago | (#27573523)

I think he meant something more along the lines that some of the costs associated are one-time or fixed costs. Therefore, if 3 more visitors visited today, the costs would not necessarily go up by $3-$6. The $1-$2 per visitor is based on that number of visitors that is report. The cost-per-visitor would change if more or less visitors were reported.

Re:Garbage In, Garbage Out (1)

ZenDragon (1205104) | more than 5 years ago | (#27572799)

Honestly this sounds to me like little more than a underhanded excuse to start charging for the service. Good luck with that.

Re:Garbage In, Garbage Out (4, Funny)

idontgno (624372) | more than 5 years ago | (#27573021)

I suspect it's the unholy fusion of accounting and proctology.

Re:Garbage In, Garbage Out (1, Interesting)

Anonymous Coward | more than 5 years ago | (#27573125)

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

Re:Garbage In, Garbage Out (3, Insightful)

jamromhem (1532397) | more than 5 years ago | (#27573225)

Well on top of bandwidth you have to consider the cost of thervers and the personnel to manage them. hard drive failures. Backups. technicians. But to think that they would lose anything by letting people place videos (for Free) and let people watch them (For Free) is crazy. we all know a website with countless storage cost almost nothing. (not serious)

Sounds like (1)

Evelas (1531407) | more than 5 years ago | (#27572639)

Youtube needs a government bailout. They're more deserving of it than the others who have gotten one.

to put in perspective (1)

bmecoli (963615) | more than 5 years ago | (#27572647)

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

Re:to put in perspective (3, Interesting)

Shakrai (717556) | more than 5 years ago | (#27572883)

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......

Yeah, but (4, Funny)

slagheap (734182) | more than 5 years ago | (#27572701)

they're making it up in volume.

Youtube and the death of the advertising model (5, Insightful)

BadAnalogyGuy (945258) | more than 5 years ago | (#27572717)

While much has been made of Google's amazing ability to make money with online advertisements, the cracks in the dike are beginning to leak.

Youtube is only the first domino in Google's house of cards. As Google increases server-side requirements to support their growing portfolio of online products, they will reach a point where advertising simply won't be profitable anymore. Youtube with its heavy server-side requirements (even running on lighttpd!) just isn't cost effective considering the number of pages they need to serve and the direct links to media they provide.

As someone who likes services that are free, I will mourn the loss of advertiser-paid services, but in terms of the viability of the web this day was inevitable.

Re:Youtube and the death of the advertising model (5, Funny)

shadow349 (1034412) | more than 5 years ago | (#27572751)

Youtube is only the first domino in Google's house of cards.

Checkmate.

Re:Youtube and the death of the advertising model (3, Funny)

Anonymous Coward | more than 5 years ago | (#27573049)

Youtube is only the first domino in Google's house of cards.

Checkmate.

Maybe he should change his name from BadAnalogyGuy to MixedMetaphorGuy?

Bingo.

Re:Youtube and the death of the advertising model (2, Informative)

DrJohnnie (93092) | more than 5 years ago | (#27573173)

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."

Re:Youtube and the death of the advertising model (1)

Deltaspectre (796409) | more than 5 years ago | (#27573267)

I'll see your checkmate and raise you a yahtzee.

Re:Youtube and the death of the advertising model (0)

Anonymous Coward | more than 5 years ago | (#27573525)

Go Fish!

Re:Youtube and the death of the advertising model (1)

Al Al Cool J (234559) | more than 5 years ago | (#27573289)

Snap!

Re:Youtube and the death of the advertising model (1)

Idiomatick (976696) | more than 5 years ago | (#27573529)

Don't make fun of him, BadAnalogyGuy is just trying to stay in character!

Re:Youtube and the death of the advertising model (4, Funny)

cbiltcliffe (186293) | more than 5 years ago | (#27572805)

Google builds card houses out of dominos?

How the heck does that work?

Re:Youtube and the death of the advertising model (1)

jason.sweet (1272826) | more than 5 years ago | (#27572977)

I think they call it cloud computing.

Re:Youtube and the death of the advertising model (1)

interstellar_donkey (200782) | more than 5 years ago | (#27572979)

Microsoft builds its house of dominoes out of playing cards. It's best not to ask how either one of them work.

Re:Youtube and the death of the advertising model (1)

Camann (1486759) | more than 5 years ago | (#27573033)

Well, it's like the old saying... the needle in the haystack that broke the camel's back. Y'know?

*sigh* *points to the username "BadAnalogyGuy"*

Re:Youtube and the death of the advertising model (1)

Opportunist (166417) | more than 5 years ago | (#27573055)

A bit like the internet tubes.

Re:Youtube and the death of the advertising model (0)

Anonymous Coward | more than 5 years ago | (#27573129)

Google builds card houses out of dominos?

How the heck does that work?

here [lmgtfy.com]

The older models will die first (1)

fictionpuss (1136565) | more than 5 years ago | (#27572877)

It's just taking a while because we're emotionally attached to things like paper news [shirky.com] .

But it's a process and the over-valuation of old media models are upheld by vested interests. Our current cable networks add nothing to the mix except for the occasional cornerscreen logo.

Ten years ago there would be no way to identify and fund popular content without cable companies. In ten years time there will be very few, if any, cable companies left - with virtually all production funded from web advertising revenue.

Getting from here to there is the tricky part, but it is inevitable.

Re:Youtube and the death of the advertising model (5, Insightful)

Repossessed (1117929) | more than 5 years ago | (#27573329)

I would point out that Microsoft has lasted for decades with huge money draining projects, on a few heavily profitable ones.

Let's all do google a favour... (1)

psYchotic87 (1455927) | more than 5 years ago | (#27572719)

...by stopping visiting YouTube!

Re:Let's all do google a favour... (3, Funny)

siriuskase (679431) | more than 5 years ago | (#27572849)

I like youtuve. It pains me to think that my pleaseure is costing them.

Re:Let's all do google a favour... (4, Funny)

Anonymous Coward | more than 5 years ago | (#27572987)

I like youtuve. It pains me to think that my pleaseure is costing them.

I can tell. Your comment here looks just like a comment on YouTube.

Re:Let's all do google a favour... (0)

Anonymous Coward | more than 5 years ago | (#27573407)

haha, pwned

This means Google is dying! (1)

dedazo (737510) | more than 5 years ago | (#27572737)

Oh wait, no. It doesn't. Because like Microsoft and HP and printers and every other company in the planet with a loss leader product, Google might very well be realizing additional profit from their unprofitable video experiment. For a company like this, nothing is as simple as simplistic per-visit loss analysis.

Priceless... (5, Funny)

TibbonZero (571809) | more than 5 years ago | (#27572767)

Content Acquisition - $710,000
Revenue Sharing - $66,000
Administrative Costs - $252,000
Being the number 1 video site on the internet.... Priceless

it is worth it (3, Interesting)

acidrain (35064) | more than 5 years ago | (#27572793)

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.

Re:it is worth it (4, Informative)

ClosedSource (238333) | more than 5 years ago | (#27572901)

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.

Greedy Capitalists! (1)

stewbacca (1033764) | more than 5 years ago | (#27572797)

You can't count revenue you never had as lost money. Google is losing the potential income of $1.65 million a day. If they were actually losing that much a day, they'd be out of business soon.

Re:Greedy Capitalists! (1)

ZenDragon (1205104) | more than 5 years ago | (#27572861)

And if they were claiming that as income, well they be visiting the Enron execs soon. But your right, youtube is a sunk cost for Google and its value is in that it drives revenue in other areas. For example, one might purchase a phone or some third party application because it has access to YouTube. Its a necessary cost of doing business in a competitive market, and it provieds a huge benefit to other areas of their business model.

Re:Greedy Capitalists! (1)

stewbacca (1033764) | more than 5 years ago | (#27572991)

Or, I could misread the summary and post something completely incorrect...and the simple fact we can't edit or remove erroneous posts is what makes slashdot one of the worst public forums on the net (ironically).

Re:Greedy Capitalists! (1)

Bill, Shooter of Bul (629286) | more than 5 years ago | (#27573031)

No, I think it ads a touch of spice. Its like writing a math test in ink, or typing, before correction tape. You better think about what you're going to say before you do, cause you can't change it.

Re:Greedy Capitalists! (1)

stewbacca (1033764) | more than 5 years ago | (#27573269)

The problem is I DID think about what I wrote, and I even previewed. The problem was I missed a key word in the summary. For example, The sky is green! I write in and say, no you stupid gits, the sky is blue, only to see the summary said the sky in not green. So thinking be damned!

Re:Greedy Capitalists! (1)

timster (32400) | more than 5 years ago | (#27573159)

Editing/removing posts is lame. Don't be in such a hurry.

Re:Greedy Capitalists! (5, Informative)

LatencyKills (1213908) | more than 5 years ago | (#27573187)

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 [yahoo.com] ) 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.

The Real Reason (-1, Offtopic)

jgtg32a (1173373) | more than 5 years ago | (#27572803)

I made a video blog a while back explaining why youtube sucks.

http://www.youtube.com/watch?v=oHg5SJYRHA0 [youtube.com]

Re:The Real Reason (5, Funny)

MightyMartian (840721) | more than 5 years ago | (#27573183)

Sweet sweet irony.

Re:The Real Reason (1)

GNUbuntu (1528599) | more than 5 years ago | (#27573353)

Your post is ironic for the ironic use of irony.

Re:The Real Reason (1)

Farmer Tim (530755) | more than 5 years ago | (#27573457)

90% of the videos on YouTube explain why YouTube sucks.

web 2.0 economics is different (2, Insightful)

siriuskase (679431) | more than 5 years ago | (#27572811)

I'm not sure exactly how. But, it is a completely different business model, and I'm not sure anyone has it figured out yet. I am grateful for the Googles of the world whoe enter these ventures without much thought to the compenssations, but I do wish them luck. I want youtube to stay around.

these numbers (1)

nimbius (983462) | more than 5 years ago | (#27572815)

are likely calculated as loss based on the potential for gains or sales...which is a calculation that is mostly speculation and
often used by businesses to inflate their urgency during an outage (ex: losing 1 billion dollars an hour.)

Re:these numbers (1)

gregthebunny (1502041) | more than 5 years ago | (#27572887)

Agreed. "Losing" and "not getting" are two different things.

Re:these numbers (1)

GNUbuntu (1528599) | more than 5 years ago | (#27572993)

No, these numbers are calculated based on the amount of revenue they take in (which is a pittance) minus the much bigger costs that it takes to run the site.

Re:these numbers (1)

DragonWriter (970822) | more than 5 years ago | (#27573169)

these numbers are likely calculated as loss based on the potential for gains or sales

No, if you read TFA, they are clearly based on guesses as to the total revenues of YouTube (which range over a huge area) and estimates of its total actual operational costs (which, while also based on all kinds of assumptions, are pretty close between the Credit Suisse and Bear Stearns estimates, unlike the revenue numbers.)

So its an guesstimate of the actual operating profit/loss, not loss based on the potential for gains. Neither of the two guesstimates is, of course, worth putting any reliance on.

Rickrollin (1)

AnonGCB (1398517) | more than 5 years ago | (#27572865)

I bet at least $10,000 is spent hosting rickroll videos and the associated comments.

Re:Rickrollin (1)

3waygeek (58990) | more than 5 years ago | (#27573127)

Well, they sure as hell aren't spending it on royalties [blogspot.com] .

Money drains (2, Insightful)

Animats (122034) | more than 5 years ago | (#27572933)

Google has a fundamental problem: except for search ads, nothing they do makes money. Google has already dumped a few money-losing services, and they may well dump more of them. Even the few non-ad products that bring in revenue, like the Google Search Appliance and the corporate version of GMail, aren't very successful. Google stock is down 50% from the peak in 2007, and most of that decline came before the recession. Investors are getting annoyed at the money draining products.

I wouldn't be surprised if Google dumps YouTube and starts charging for GMail.

Re:Money drains (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27573083)

Interview with them didn't go well? Too bad.

Re:Money drains (2, Insightful)

rolfwind (528248) | more than 5 years ago | (#27573139)

Google has a fundamental problem: except for search ads, nothing they do makes money.

That's a stupid way of looking at it. They are my central hub. Everything they do is gear toward information gather and making more money. Google maps? They know the spots I drive to with a simple search, I get directions in return. What benefit is that to them? More targeted ads, and selling info if they so choose.

Google has already dumped a few money-losing services, and they may well dump more of them.

May as well kill their search as well and call it a day.

Even the few non-ad products that bring in revenue, like the Google Search Appliance and the corporate version of GMail, aren't very successful. Google stock is down 50% from the peak in 2007, and most of that decline came before the recession. Investors are getting annoyed at the money draining products.

I wouldn't be surprised if Google dumps YouTube and starts charging for GMail.

That would kill Gmail. Gmail is also the only place where I have noticed their one line ads.

They dump services that aren't popular. That makes sense from both sides. Youtube is very popular, they would be extremely stupid to close shop on the #1 place people turn to videos on the internet. I would say the only problem with youtube is that it's poorly organized. "Channels" are basically clips in the order people submitted them, so you can't tie 10 minutes segments any other way (or any logical way - they need to fix that).

They also should work on ads, no longer than 10-15 seconds, to insert in front of videos randomly and allow revenue sharing. But to close shop would be like CBS/NBC/ABC all simultaneously killing their radio stations in the 1920s because it wasn't making money over fist right from the beginning.

Re:Money drains (1)

ZenDragon (1205104) | more than 5 years ago | (#27573237)

The solution is not to drop the money draining products, but to focus and energize those that do. Half of the reason the economy is the way it is right now is because all these lame brain companies cut costs by laying off employees. It seems like the easiest way to save money, but while you decrease administrative costs you increase cost per unit and productivity in most cases. Many of these companies soon find out they need those employees to make money and end up hiring them back, albeit at a lower wages. The solution is not to drop employees/products but to create new products with higher margins and increase production to bring down per unit costs, thus driving up margins. Obviously these things are difficult to calculate with something like YouTube because the residiual benefit is hard to trade. An accounting looking at YouTube would see it as nothing more than a cost center, but there are other factors to consider like brand recognition and cost/benefit.

Re:Money drains (1)

ZenDragon (1205104) | more than 5 years ago | (#27573275)

wow lots of typos in that one haha... increase cost per unit and DECREASE productivity residiual benefit is hard to TRACE.

Re:Money drains (1)

MightyMartian (840721) | more than 5 years ago | (#27573281)

any of these companies soon find out they need those employees to make money and end up hiring them back, albeit at a lower wages.

Hmmm...

1. Hire lots of workers
2. Put out products
3. When economy dumps, fire workers
4. Hire workers back with deep pay cuts
5. ???
6. Profit!

Re:Money drains (1)

Jaysyn (203771) | more than 5 years ago | (#27573399)

That went *badly* for Circuit City.

Re:Money drains (1)

ZenDragon (1205104) | more than 5 years ago | (#27573471)

Seems fine from an micro-accounting perspective, but ultimately decreases economic spending due to lower wages which over time results in less profits for the company. Especially in the retail and discretionary spending markets, like sports and miscellaneous entertainment. Unfortuantely the huge companies that employ a great deal of employees underestimate their value to the economy. They dont think beyond their own numbers and consider that their employees go out, spend money, and drive their business as much as their regular clients do. Follow a dollar though the market and you will find that it makes a round trip right back into the pockets of each person that spent it. You break that cycle and the whole process colapses. Though consider that dollar has to end up somewhere, it doesnt just disappear. Figure that and you've got it made.

Quality vs. Quantity. (2, Insightful)

geekmux (1040042) | more than 5 years ago | (#27573005)

C'mon, are the quality and popularity statistics really that surprising when the average YouTube video is uploaded with a cheap webcam and recorded by someone who makes Paris Hilton look like Einstein?

I believe a famous dog once said "I leave more personality in tightly coiled piles on the lawn."

Re:Quality vs. Quantity. (1, Funny)

Anonymous Coward | more than 5 years ago | (#27573361)

C'mon, are the quality and popularity statistics really that surprising when the average YouTube video is uploaded with a cheap webcam and recorded by someone who makes Paris Hilton look like Einstein?

I showed your comment to Paris Hilton, she says she's not offended since "Einstein looked pretty hot."

Huh. (4, Funny)

cthrall (19889) | more than 5 years ago | (#27573051)

Researchers from HP Palo Alto studied videos uploaded to YouTube

I see I'm not the only one who gets paid to do this.

What does it cost to store a seldom-watched video? (0)

Anonymous Coward | more than 5 years ago | (#27573063)

popularity has little to do with quality or persistence

So what? How much does it cost to store a seldom-watched video?

If I upload a video of my kid falling off his bike, it costs essentially nothing for them to store it. And if my family members watch it five times, maybe it costs a little bit more.

But the brand loyalty YouTube creates by everybody knowing their video is still there? Priceless.

Re:What does it cost to store a seldom-watched vid (1)

GNUbuntu (1528599) | more than 5 years ago | (#27573227)

I'm not sure what your comment has to do with the sentence you quoted. The part you quoted had to do with the fact that two bored people noticed that as person posted more and more videos that even though the quality of the videos would go up (as in production quality, etc) that the subsequent popularity of those later works wouldn't necessarily be higher than the previous works that were of a lesser quality.. It has nothing to do with the costs on Google of storing videos.

YouTube needs a better search engine (1)

Tibor the Hun (143056) | more than 5 years ago | (#27573073)

YouTube is like the web from 90ies... Everybody's dog was on there..
Try to find a music video? Well, you'll get 4000 videos dealing with viagra, terrorists, preteen girls, some dopey dudes and everything else EXCEPT for the video you were looking for.
I know that goog may not have the rights to the aforementioned music video, but it's fscking misleading and a waste of my time.

I know that there is some good stuff out there and there is a good idea behind it, but navigating through the crap, poorly edited, and inappropriate music on there takes too much time.
And why does every fscking teen think that blasting "Disturbed" is a valid soundtrack to every conceivable situation that can be recorded?

Not "research" (1)

DragonWriter (970822) | more than 5 years ago | (#27573105)

"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."

Er, no.

That's not research, its almost pure guesswork. The key part being the guesses as to revenue. The two different estimates (from Credit Suisse and Bear Stearns) come pretty close on total daily cost ($2,064,054 vs. $1,906,520), but they are differ by a huge amount in the estimates of daily revenues ($657,534 vs. $246,575) so there may be some reasonable basis for the cost numbers (or the same assumptions may be made by different analysts), but the revenue numbers (and consequently the profit/loss estimate) seem to be pulled out of the air.

It's about control. (1)

drolli (522659) | more than 5 years ago | (#27573107)

How do you estimate strategic assets? How to estimate the value of "offering everything"? How much is it worth to put the thumb screws on every media company? Everybody goes to google video/youtube for seaching videos - if you are not mentioned, forget your business. I usually stay on youtube becaus i hate to add more and more noscript exceptions and because i know that it works. Would google introduce pay per view for movies, i would immediatly pay 20Euro/Month - if they keep it as trouble free as it is now. If one percent of the customers thinks like me, they cover their costs. Youtube may make money from hosting videos for companies. So what is it worth to have this position in the market? How strong do sony/ms try to push their media systems on theirs game consoles?

Anybody really surprised? (2, Informative)

HerculesMO (693085) | more than 5 years ago | (#27573131)

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.

Let me try (2, Funny)

Zarf (5735) | more than 5 years ago | (#27573287)

I would just need that amount for a few days. I'm sure I could turn it all around. Just deposit that amount in my offshore bank account as my salary. If it doesn't work... you won't be out any more than usual. Why not give me a try?

A flood of multiple versions (0)

Anonymous Coward | more than 5 years ago | (#27573301)

Maybe that's a good queue to start cutting out those endless releases of the exact same videoclip that is polluting youtube and making it's search feature somewhat useless. Some searches end up presenting the user with 5 or 6 different versions of the exact same clip on the first page alone. What is that good for?

Once google starts a cull on youtube (i.e., a "flag this as a copy of X video" feature to delete it and redirect to the main video) I bet the company's storage costs will drop considerably.

Hold on a second (1)

sjwest (948274) | more than 5 years ago | (#27573307)

If google did not have a rating 1 video site, some banker would say that google isnt well positioned in that market being there all mba geniuses and big is best.

The adverts on you tube (which i caught once and thought was rather basic) i also think made people think about posting stuff there.

I personally cannot play youtube videos on my recent latest and greatest debian install it crashes my ff3 browser - i might have the wrong flash - i now don't visit yt, So im not costing google $2 a day.

Also ever since viacomm sued youtube and started handing out our viewing profiles means i don't like to expose peoples privacy to youtube content to the riaa and associated evil empires.

So whatever google do its not going to make anybody happy, but then lawyers love suing google, bankers are well known for there crystal ball readings.

questionable calculations (1)

canuck08 (1421409) | more than 5 years ago | (#27573309)

From TFA:

Bandwidth: If YouTube will get 375 million unique visitors in 2009 and each user downloads video at 400 kbit/s (based on figures from a range of sources), the cost to Google of YouTube bandwidth is a minimum of $1 million a day. This assumes YouTube is paying a minimum of 50 percent of the lowest market rate for megabit-per-second services.

wtf?
I do not think those numbers mean what you think they mean.

Visitors per year is irrelevant.
Simultaneous viewers is what matters.
$1M buys you 250 Gb/s at the 'best' market rate of $4/Mb/s.
(one might also presume that google is not f-ing insane and actually peers all over the place and does not pay transit for everything)

250Gb/s divided by 400Kb/s is 655K viewers.

I do not know how many simultaneous viewers youtube has but something called 'youtube live' may have had 700k simultaneous and that was billed as 'unusually high'.

Re:questionable calculations (1)

canuck08 (1421409) | more than 5 years ago | (#27573383)

holy heck.
I just re-read that and they are saying $1M per DAY for bandwidth!

In that case, you can buy 7.5 Tb/s for $1M per day.

Their numbers are off by orders of magnitude.

hulu a contributing factor also? (1)

v1 (525388) | more than 5 years ago | (#27573311)

a lot of people went to youtube to find eps of TV shows. Combine the takedowns with hulu, and that's got to be responsible for a lot of their lost revenue.

volume (1)

speedtux (1307149) | more than 5 years ago | (#27573339)

The average visitor to YouTube is costing Google between one and two dollars

No problem, they'll make it up in volume :-)

Quality? What's that? (1)

Leafheart (1120885) | more than 5 years ago | (#27573441)

"Researchers from HP Palo Alto studied videos uploaded to YouTube and found that popularity has little to do with quality or persistence

No shit sherlock. What next? Water is wet? Come one, anyone who know even just a tiny of pop culture knows that is not about quality, it has never been. Come one, hasn't this people been to school? From childhood we are taught that "quality" and "knowledge" are to be shunned, and "cools", "looks" and dumb acts should be praised.

That explains it. (4, Funny)

thePowerOfGrayskull (905905) | more than 5 years ago | (#27573453)

Let me relay a little dialog in which I learned the REAL revenue model of youtube. I got this mysterious call just a few days ago.

Me: Hello
Them: Mr or Ms Skull?
Me: Yes, may I help you?
Them: You remember that ... embarrassing video you posted to youtube a couple of years back?
Me: Um... yes?
Them: You know you gave us-- I mean, google ownership of it.
Me: I ... guess so?
Them: Yes. We have noticed that you have been searching for jobs lately.
Me: who is this?
Them: And we see from your email that you've been speaking with Innitech in particular.
Me: if you don't tell me-
Them: And we also see that you mapped out directions to their headquarters.
Me: I'm going to hang -
Them: If you don't want Innitech to find this video before hiring you, you will wire 1,000,000 USD to the following numbered account

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