Does It Cost Money to Upload Content
Factor Munster, the annotator with Piper Jaffray, put a report out Thursday looking at the finances of YouTube, and he makes a suggestion that I haven't seen before: Google should charge a "nominal fee" to people to upload videos to YouTube if the video isn't appropriate for advertising.
I have a lot of doubts that Google would ever do it. But it's a provocative idea that's worth a give-and-take here on Bits.
Google announces its financial results on Thursday afternoon, and the subject of YouTube may well come upwards when its executives talk to analysts.
Mr. Munster's thesis is that Google has choices in how it tries to profit from YouTube. He estimates that the site will earn $323 million from advertisement this year, mainly from big brands like Verizon, Disney and fifty-fifty Microsoft. And he notes that the site has started selling downloadable versions of some videos, a second concern model.
Nonetheless, Mr. Munster estimates that the cost of storage and streaming will exist more than YouTube'due south revenue, so it needs to discover even more pennies in the couch. An important source, he argues, is all those people uploading videos of their babies' get-go steps or clips of "Due south Park." These are money-losers because no advertiser wants to put commercials on amateur videos, and Google tin can't legally sell ads in pirated content. So hither's Mr. Munster'southward thought:
Nosotros believe YouTube could develop a hybrid model where it charges a portion of users to upload their videos. YouTube could develop engineering based on its current Video Identification technology to protect copyrights to make up one's mind whether advertizing could be sold against the video to be uploaded. If the algorithm deems Google could not monetize the video through advertising, information technology could require the user to pay a nominal fee to upload the video to the site, which could be based on the average lifetime cost of streaming for a given video.
We recognize such a strategy would change the culture around the site and some users would likely go elsewhere to upload videos; yet, we debate that if users were to flock elsewhere to upload videos for complimentary, the calibration trouble would then become another company's worry, and that visitor would inevitably not have the strength of Google behind information technology.
We believe that if Google ever intends for YouTube to contribute significantly to its bottom line, the company needs to consider additional methods to charge its users, not just advertisers.
In that location's no question that if Google did this, it would radically improve the economics of YouTube. It would have more than money in and spend a lot less on bandwidth and storage costs for video information technology tin never profit from.
But I call up the arguments against such a motility are powerful.
It would destroy the essence of the YouTube brand. YouTube has get the Google of video — the place you wait outset to find admittedly anything that is non the professional content that is on Hulu. A brand that is seen equally the icon for an entire activeness online is about priceless and not something Google would diminish lightly. Internet video is besides such a huge opportunity over the next decade that Google could finish up trading future growth for almost-term profits.
Charging for YouTube uploads would as well harm the Google brand with customers, advertisers, investors and the technology customs. Google is notwithstanding a company that is fundamentally bullish about the futurity. That is an important contrast to Yahoo and AOL, which go on cut back services to salve money, and Microsoft, which changes strategy on an almanac basis.
Google tells the world that it believes the potential for revenue from advertising volition do nothing merely grow and the cost of delivering online services volition practise cipher merely fall. That'southward why it keeps giving away more and more than services that used to cost money. To say that it doesn't see the day when the money it makes from YouTube advertizing will embrace its costs would exist a stunning access and enhance questions about much of the residue of its business.
And and then there is the supposition that Google is losing lots of coin on YouTube. I'm not so sure the picture is as bad as Mr. Munster and other analysts make it out to exist. After all, Google has a huge network and vast data centers congenital for depression costs. One old top YouTube executive told me recently that the site is at breakeven and that its storage and bandwidth costs are far below the estimates that accept been bandied around. The former executive didn't want his name used, so take that information only as a sign that it's worth existence skeptical of estimates virtually how much money Google is losing.
What's your accept: Should Google charge people to upload videos to YouTube?
Source: https://bits.blogs.nytimes.com/2009/07/16/should-youtube-charge-a-fee-to-upload-video/
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