Professor Mark J. Perry's Blog for Economics and Finance
Posted 3:43 PM Post Link
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Eh, as others have pointed out on the Abundance post, what matters is the quality of what's being put out, not quantity. And the fact is that Youtube has been a resounding failure at monetizing all those videos, which is why Youtube loses money to this day and why anybody who does quality work jumps ship for network money as soon as they're noticed. Youtube's been great as a free video-hosting site for those who want to post their videos online, but as a business it's been a failure. And given their recent silly push to recreate TV "channels" online, they seem pretty clueless about how to proceed, so it's not going anywhere.
Quality is determined by the viewer. What others consider good quality may not be what I consider good quality and what I think doesn't matter.People now have more access to lots more than they ever used to. Whether or not youtube is a successful business model, we all have more choice.
Yes, but nobody considers Youtube videos to be of good quality, that's the difference. :) And people have lots of access to videos on other sites like Vimeo, dailymotion, the previously available Google Video, and so on. The only thing that distinguishes Youtube is that they were more willing to allow piracy early on, which helped them grow to their current dominant size, but which will lead to their losing their ongoing legal battle at the Supreme Court, just like Napster and Grokster before them. So online video is not what we're talking about, it's a company that still loses money and so will not stick around, not to mention getting sued for billions more.
There goes american productivity.
I'd like to find out how all this translates into terabytes per year (of uploads), how much it costs to store all of it, and how much revenue per terabyte google is getting.
@Arbitrage789 That's exactly why youtube is losing money. 4 billion views a day. Everyone uploaded new videos and watching existing videos obviously requires a ridiculous amount of bandwidth. Bandwidth, that I imagine, is pretty expensive.
Eventually YouTube will be profitable. Once they start posting ads, if even 0.0% of viewers click on an ad, that will translate into a pretty good return on the purchase price.
[Of course I didn't mean 0.0%. 0.1% will produce lots of revenue.]
Mogumbo, they already put ads on content from known TV shows. Their big problem is that they can never put ads on the millions of other videos out there, till they can determine whether it's pirated or not. Right now, there's no good way to determine what's pirated and what isn't, so they're stuck with only putting ads on a small subset of videos. And that's a huge problem, because the moment you start putting ads on some random video that turns out to have pirated content, the lawsuits multiply even more, because you're then making money off pirated content, just like the Megaupload site that just got shut down. Basically, youtube is fucked, they just don't realize it yet. ;)
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Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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