Ever since I joined YouTube a few years ago I have always wondered how they make their money. So I decided to look into the matter. As I had guessed, they do rely on advertising for their income. This amazes me though, that such a big company can survive on advertising. As was already stated, YouTube also gains profit from deals with content companies. But even so, the money they bring in is insignificant compared to the costs of running a site like YouTube. "According to Multichannel News, Credit Suisse analysts project that YouTube bandwidth costs, content licensing agreements, hardware needs and other expenses will reach over $700 million in 2009" (1) That is well over 3/4 of their total opperating expenses. Analysts agree that "the issue for YouTube going forward is to increase the percentage of its videos that can be monetized (likely through more deals with content companies) and to drive more advertiser demand through standardization of ad formats and improved ad effectiveness" (1) YouTube still has some work to do before they can be really successful.
I found the above table very interesting as to how much time users spend on certain sites.
No comments:
Post a Comment