How long can YouTube really last?

[HCBailly]

I’m talking about YouTube: the business.

How can something like that endure over a long period of time, even given its incredible popularity?

I’m seriously considering a business that generates its income or website traffic via YouTube, due to the popularity of my channel. However, I see three major obstructions to YouTube’s long-term survival.

1) The concept of YouTube seems to be impractical to maintain over a long period of time. Essentially, YouTube allows people to upload as many videos as they want for free and never deletes old videos. How can that be maintained forever? It must cost so much money for both the hard drive space and the server bandwidth. Frankly, I’m amazed that it has lasted this long.

2) How does YouTube pay for everything? I know they generate some amount of money via advertising, but I almost never see it, and I go there on a daily basis. I’ve heard it’s one of the Top 10 most popular websites today, but I can’t imagine that advertising income could be so great that it can keep up with the demand for hard drive space and server bandwidth forever. Can it?

3) YouTube seems to be facing a ton of legal issues. I’m not really worried about YouTube getting sued into oblivion. They seem to be quite capable of doing the legal minimum amount to avoid losing the website. However, their attorney fees have to be enormous, just to fight off the endless lawsuits against them. This only adds to the cost of maintaining the business.

What do you think? Does YouTube or something like it have a long-term future? Can they keep doing this indefinitely?

On a side note, what other options would be available? What if YouTube shut down someday? It sounds like a very real possibility to me, simply for financial reasons alone. That would destroy my potential business model. Obviously, I’m looking for something that has a long-term future for me.

Thanks for the discussion.

[biophase]

1) I don't think space and bandwidth are an issue at all. Both of these are cheap and get cheaper as time goes by.

2) As long as people continue to visit the site, they will generate revenue.

3) If you aren't worried about this then I don't see why you would be worried about youtube going down the tubes.

Bottom line is that I think youtube will be around forever. I can't how it or why it would ever disappear. If there is even a hint that it would disappear, they are hundreds of other video sharing websites out there ready to take its place.

[JScott]

My $.02...

The solution to hard-drive space and bandwidth is just throwing cash at the problem; because YouTube is owned by Google, this really isn't an issue. What's more of an issue is the scaling of the technology to support the increase in drive space and bandwidth, while maintaining performance. Keep in mind that YouTube used more bandwidth last year than the entire Internet back in 2000.

But, this again is where Google comes in. Due in part to the challenges that Google has faced in its core search technology (scaling, edge interfaces, performance, etc), the company has pioneered several hardware and software technologies that allows both the core Google search and the YouTube service to be rapidly and continually scaled without loss of performance (actually, performance is improving).

So, that addresses the technical aspects...

As for the business aspects, YouTube will support itself with Advertising, and unless you believe that the whole Ad-model of the Internet is broken (or will break at some point in the future), it's probably safe to say that YouTube can continue to support itself using this business model.

Additionally, with partnerships with the likes of CBS, MTV, and plenty of other big media companies, there's enough money to go around and to keep them in business for the foreseeable future.

As for legal issues, that's a completely separate topic, but in general, that shouldn't be something you should worry about if you plan to use YouTube for your business. The media companies understand that either YouTube will dominate the video-based user-content market, or other companies will come in to fill any void. They'd rather it be a known entity that they have relationships with than a bunch of unknown players, so the other big media companies will actually go out of their way to ensure that YouTube survives and thrives.

Plus, video is video. And with video standards continuing to solidify and take hold, it doesn't really matter if YouTube remains the dominant player or not...if they don't, someone(s) else will emerge and all the content you have created and rely on for your business will be easily ported elsewhere.

From a user's perspective, it's the content that matters, not the vehicle for distributing it...

[AndrewG]

I won't answer every question but I remember reading that Youtube makes around $80 million a year from advertising. But many industry experts said it was one of the worst deals Google has ever done. And they're also getting some competition from Hulu.

[fanocks2003]

I don't see why it would go "down the tubes". The ad modell they have is certainly scalable. The more unique visitors the more money they would make on their ads. Or am I wrong here? They could just charge more for the same ads and hence being able to finance bigger and bigger bandwith and what have you.

I think YouTube will be here for the long run. Unless something crazy/unexpected happens.

[neverfastenough]

Interesting article on TechCrunch about Youtube

Can Hulu Be A Bigger Business Than YouTube?

[australianinvestor]

It's a phenomenal platform. Remember why TV became so powerful? It's direct access to people's minds. It's like a TV that has a billion TV shows all playing at once, and you can either ask it for what you want, or go Gruen Effect (glazed-over eyes, ready to buy, very impressionable) and watch what they give you.

They've become very popular. They have access to millions upon millions of minds worldwide, who can potentially react to their content instantly.

Imagine watching a regular TV, except you see something awesome and you can email it to everyone you know with a touch of a button, buy it with the touch of a button, and relay the message to the world at large. Oh, and it's not bad for businesses either. It'll be a cheap, instant, ultra-targeted (like TV could NEVER be), and feedback-laden.

It's a TV station with no actors, presenters, anchors or camera operators, and many millions of viewers. It's a marketing machine if I ever saw one, with the added benefit that it has 100% ratings sampling (no ratings coming in from a selected group of people around the country to ESTIMATE the ratings - you get ACTUAL numbers of people watching, average watch times, average exit point, etc. If you are youtube, you can even SELL data like this. Whoa.)

At the end of the day, HDD space is getting cheaper per petabyte, legal issues are intermittent (it's free sampling of products, free promotion, and a few test cases will establish some sort of industry standards), and bandwidth will become very large and cheap as this gets bigger.

[memenode]

I think this is a no brainer. As biophase noted, hardware necessary for disk space and bandwidth is getting cheaper. In fact, from what I'm seeing it is digital technology of all things the prices of which just keep getting down and down while the quality and quantity goes up. It's incredible. I've read several articles which reveal why is it so easy nowadays for companies, not even biggest companies, to provide huge bandwidth and hosting space. It's practically abundant.

And 80 million a year on those few ads that show is a pretty nice deal. If they need more they can just add a little more ads (albeit not too much as that could have a backslash in terms of users jumping ship to other sites).

I think you just have nothing to worry about. Even if it somehow magically happened that YouTube went down there is a number of alternatives. Just keep an archive of all your videos offline backed up somewhere and you can just switch to a different site (like metacafe, dailymotion etc.) in a matter of a day.

Cheers