R.I.P. YouTube could very well be the future, final blog post title on the popular video sharing site’s official blog (did you know they have a blog?). I recommend you read Farhad Manjoo’s eye-opening article from Slate Magazine (or listen to it, like I did) on the sketchy future of YouTube.
The gist is that like many Web 2.0 services, YouTube isn’t making enough money to cover it’s costs. The article includes some frighting figures for YouTube fans:
Google will lose $470 million on the video-sharing site this year alone. To put it another way, the Boston Globe, which is on track to lose $85 million in 2009, is five times more profitable—or, rather, less unprofitable—than YouTube.
not even Google can long sustain a company that’s losing close to half a billion dollars a year.
Advertisers don’t like paying very much to support homemade photos and videos. As a result, the economics of user-generated sites are even more crushing than those of the newspaper business.
they pay for a broadband connection capable of sending data at the equivalent of 30 million megabits-per-second—about 6 million times as fast as your home Internet connection. All this bandwidth costs Google $360 million a year, the analysts estimate.
YouTube spends about $250 million a year to acquire licenses to broadcast professionally produced videos.
the cost of running YouTube for one year exceeds $700 million.
the company makes only a fraction of that back in advertising—about $240 million in revenues for 2009.
This makes me wonder what the future of YouTube looks like. You might think that YouTube is pointless, you may not even care whether it goes away. I think YouTube is an extremely important tool in the movement of consumer created media. It’s also something much bigger than that.
YouTube fans and haters alike should watch this video by Mike Wesch and his Digital Ethnography class at the University of Kansas. What are your thoughts? How can YouTube be saved? Is it’s future bleak?