How does Youtube make money?

Discussion in 'Business & Economics' started by Syzygys, Dec 29, 2008.

  1. Syzygys As a mother, I am telling you Valued Senior Member

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    I figured I would post it in the correct forum:

    I will look it up for you later.

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    Actually, I don't even have to look it up, since the website has popup ads on the videos...But Google certainly overpaid for it, and I doubt they are gonna see a return on their investment anytime soon...
     
    Last edited: Dec 29, 2008
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  3. superstring01 Moderator

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    Advertisements. It's up with Google and Myspace in revenues from adverts.

    On the main page of Youtube I found two ads on the right hand side:

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    ~String
     
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  5. Xelios We're setting you adrift idiot Registered Senior Member

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    90% of Google's revenue comes from ad services, I expect it's the same with Youtube.
     
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  7. Syzygys As a mother, I am telling you Valued Senior Member

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    Well, apparently Fraggle hasn't used Youtube in the last 2-3 years.

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    But let's throw in some education:

    "A deal between YouTube and Warner Music Group to share music videos and revenue could usher in an era where the interests of content copyright holders and freebie-loving consumers align. Or it could wind up being just another stab at a business model for YouTube. The outcome will be determined by how the revenue between copyright holders and distributors like YouTube gets shared, say experts at Wharton.

    Creating a revenue sharing model that is satisfactory to all is easier said than done, these experts note. It's a fundamental question: If "information wants to be free," as many assert, how do you make money?

    On Sept. 18, 2006, YouTube, the largest video sharing site on the web, and Warner Music Group announced a deal to distribute WMG's music video catalog on YouTube. The catalog includes music videos, behind-the-scenes footage, artist interviews and other special content. In addition, YouTube's bevy of amateur video producers can use WMG's music library as soundtracks for the content they upload. As for copyright management, YouTube plans to build a content identification and royalty reporting system to identify video content -- such as the most recent Madonna video -- and divvy out payments to artists. The system, to be launched by the end of the year, will allow WMG to authorize rights to YouTube users. Advertising revenue will be shared between WMG and YouTube."

    http://knowledge.wharton.upenn.edu/article.cfm?articleid=1568
     
  8. Xelios We're setting you adrift idiot Registered Senior Member

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    Isn't working out so well though,

    http://www.physorg.com/news149102568.html
    Laugh, I wonder how much of the revenue Warner made on Youtube in the past 2 years went to the artists or songwriters. I'm going with $0.
     
  9. Syzygys As a mother, I am telling you Valued Senior Member

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    "YouTube’s Sorry Situation

    YouTube may be wildly popular, but Google’s ability to realize a profit has been difficult, at best. The company spent $1.65 billion for YouTube and so far, it has yet to find a way to monetize it effectively and realize a positive return on its investment.

    Estimates for how much revenues YouTube can produce are all over the place. While Forbes estimates YouTube’s revenue will reach $200 million worldwide this year and $350 million next year, Citi analyst Mark Mahaney thinks Google can make $500 million next year if it focuses more of its efforts on display ads.

    But just because YouTube may be able to recognize revenue of $500 million next year, doesn’t mean it will. YouTube needs to do a much better job in the advertising department to get there. It has done little to allay many of the fears advertisers have about the content presented on the site—the limited success of its Video ID program aside. Whether YouTube, the business, can be as successful as YouTube, the video site, is still a big question mark.

    For all its business challenges, YouTube remains the most popular video service on the Web. The site commands 34 percent of all Web videos streamed in the U.S. market, while the second-place service, MySpaceTV, only controls 6.4 percent, and Hulu brings up the rear with 0.7 percent (according to May, 2008 numbers from comScore Video Metrix)."

    Hulu is making comparable amount of ads money although its database is 1/50th of Youtube...

    http://www.techcrunch.com/2008/09/01/can-hulu-be-a-bigger-business-than-youtube/
     
  10. Neildo Gone Registered Senior Member

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    Or you haven't been using Ad-Block Plus in the last 2-3 years.

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    God, I hate online advertisements. Makes me think of the bad days of television.

    - N
     
  11. Syzygys As a mother, I am telling you Valued Senior Member

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    This is fresh:

    "Major music companies are reportedly considering plans to launch a video site that would compete with Google Inc.’s YouTube.

    The Financial Times reported Sunday that the plans under consideration are modeled after Hulu, the video site owned by NBC Universal and News Corp., which is the paper's parent company. Hulu users watch TV shows after seeing a short ad.

    The news comes after videos from Warner Music were pulled from the site after it couldn't come to terms on a new contract with Google (Nasdaq: GOOG).

    The three other big music owners in talks with Google are EMI, Sony and Universal. They now get a fee each time one of their videos is watched on YouTube, but Google reportedly is pushing to reduce that fee and offer more of the ad revenue associated with the videos."
     
  12. Fraggle Rocker Staff Member

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    I must have a really good pop-up blocker on my Macintosh. I never see those. Just a lot of blank space.

    I love my Mac, but I acknowledge the implied contract of enduring advertisements in exchange for enjoying a free service.

    Hehe, or maybe the people who design the ads don't bother to make them Mac-compatible. I've seen dumber stuff than that on the internet.
     
  13. Syzygys As a mother, I am telling you Valued Senior Member

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    Slightly related:

    When Google was thinking of buying Digg, the price was around 300 million. Then they ran the numbers and realized that just because a site has lots of user, that doesn't always transfer to money. So the negotiations got dropped. Digg is by the way still not making money, it is running on money infusions, 28 million was the 3rd one...

    Actually, with Google's money, willingness and brainpower they could replicate ANY website (instead of buying) and take over the costumers/users. Google video was way superior to Youtube and I miss it....Instead of buying Youtube they should have just kept improving google video....
     
  14. EntropyAlwaysWins TANSTAAFL. Registered Senior Member

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    No, that's not at all how it works.
    Flash runs on essentially anything nowadays and image formats absolutely works everywhere so in all likelihood it has nothing do do with you using a mac and more to do with your web browser.
    Although having said that there some absurdly stupid things on the internet.
     

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