Adotas has a story today about Google’s problems monetizing YouTube.
If you remember, Google bought YouTube in 2006 for $1.7 Billion, which after complex calucaltions, came out to be a multiple of about $1.7 Billion. That’s not true, they made some money, but the valuation was shocking. Revenue this year is estimated to be $200 Million. A fine amount of money.
But, my goodness the costs must be enormous. How many trillion streams are they broadcasting at what processor and bandwidth cost? Wikipedia estimates $1 Million per day on Bandwidth alone.
So now imagine for a second that Google had not bought YouTube, and allowed it to lose money at an astonishing rate. If YouTube was currently running around the investor community asking people to pony up money to fund the TV watching habits of the next generation. At some point, the bleeding would have to stop. Imagine some new scenarios for owners of YouTube:
- Comcast: *Poof* All of a sudden it’s a paid subscription channel, and no copyrighted broadcasts would make it to air.
- Microsoft?: YouTube becomes MSN Video
- An "Orbitz-like" joint partnership between Disney, Viacom, and General Electric: YouTube meets Hulu.
- Fox: The new MySpace Videos?
I guess my point is that next time you are enjoying some free entertainment, be happy YouTube was bought by a company who thought it was a cool idea, and would figure out how to make money on it 5-10 years down the road.
