YouTube

YouTube's purpose is to act as an online video distributor. Allowing users to view, review and share videos with anyone in the world. It's given a platform to the DIY filmmaker to reach massive audiences. With some of it's auteurs actually turning their broadcasts into a successful business. Such has been the case for Michael Buckley, who was able to quit his full time job to do a three day a week video about celebrity gossip called "What the Buck?". Revenue from his program is generated from his participation in the YouTube partner program. Partner videos have advertisements in the video like a commercial and on the same page as the video. Revenue from the ads is shared with the video creator and YouTube.(1)

It's not just the little guy that YouTube is seeing profits from. Another revenue strem comes from YouTube's deal with MGM to distribute less sought after content and DVD release promotions.(2) Most recently YouTube made a similar deal with Time Warner for content from Cartoon Network and CNN.(3)

It's not clear whether this is a profitable business model. YouTube is a property of Google, and even though Google is a publicly traded company it does not disclose numbers for it's individual holdings. Almost three years ago YouTube was bought by Google for $1.65 billion. According to an analyst for Credit Suisse, YouTube will lose $470 million this year alone. (4)

It seems unlikely that we'll all continue to suffer through the overpriced, painfully limited and obsolete technology that cable uses to deliver it's content to us. Sites like YouTube and Hulu are onto something much better, the question is will they be able to turn it into a profitable business or will someone who does it better come along and eat their lunch.

1.) YouTube Videos Pull In Real Money, from The New York Times

Retrieved November 1, 2009, from The New York Times website:

http://www.nytimes.com/2008/12/11/business/media/11youtube.html

2.) YouTube goes to the movies, from CNN

Retrieved November 1, 2009, from CNN website:

http://money.cnn.com/2008/11/06/technology/youtubemgm.fortune/index.htm

3.) YouTube's Working Overtime, from Slate, The Big Money

Retrieved November 1, 2009, from Slate, The Big Money:

http://www.thebigmoney.com/blogs/feeling-lucky/2009/08/20/youtubes-working-overtime

4.) Does YouTube actually make any money?

Retrieved November 1, 2009, from The Guardian:

http://www.guardian.co.uk/technology/blog/2009/apr/07/youtube-video-losses