Fascinating discussion over at Barron’s Tech blog — Tech TraderDaily –on how Google can turn YouTube into a profitable division: Micropayments for hosting videos:
Asking the question “Is it really a good idea to allow users to upload video of anything?” Bernstein analyst Jeffrey Lindsay looks at the details of YouTube usage:
Lindsay notes that people are uploading clips at the rate of 15 hours of video every minute, and that many are being watched overseas where ad revenues are meager if they exist at all. He notes that the service is highly popular in Eastern Europe, the Middle East, Turkey and North Africa. He doubts that major brand advertisers would pay to stream ads in, say, Uzbekistan. He also notes that very few Uzbek videos will likely have large viewership, “eliminating the value of any edge-serving strategy and so destroying any economies of streaming at scale. Can Google ever make any money in these markets with YouTube?”
He thinks it might make sense to consider levying low but non-zero listing fees so people “stop listing rubbish and cover at least some of the hosting cost.” Lindsay proposes that videos that score well in user metrics could get a break on their fees which could go to zero for popular and advertising-friendly clips. Ad revenue could be split with content providers, but a hosting fee would apply if if revenue fell below specified levels.
Google is after all, a business — and YouTube an important, but expensive part of that business. But can (or should) Google subsidize video sharing at a loss of half a billion dollars per year forever?
Should YouTube Charge To Host User-Generated Video?
Tech TraderDaily May 29, 2009, 5:23 pm