For all those thinking free is...really free at all.

YouTube to lose a half billion dollars this year.

http://www.slate.com/id/2216162/?GT1=38001

The issue is not video. It is just that user-generated content is hard to monetize.

From the article:

"User-generated content" is proving to be a financial albatross.

Advertisers don't like paying very much to support homemade photos and videos.

At YouTube, the relationship can be backward: The videos that get the most clicks—and are thus most expensive for YouTube to carry—trend toward the sort of lewd or random flavor that doesn't sit well with advertisers. Look at some of the site's hits over the last few days: a clip of a guest fainting on Glenn Beck's show filched from Fox News; a video of a Brazilian soccer coach punching a referee, also recorded from TV; a cell phone capture showing Britney Spears misidentify the city she's performing in; and a shot of a "boob grab" among spectators at the Masters golf tournament. Would you pay to stick your product's logo under any of them?

Probably not—YouTube sells ads on fewer than 10 percent of its videos.

So yes... If you are serving up a ton of videos and don't have any way to monetize that content (advertising, subscription or user fees), then you are going to have trouble making money (Duh!). What is doing well and will continue to grow is long-form and/or quality content that will either receive advertiser support or that people will pay for (subscription or VOD).

What Psound said. I wonder how Hulu does...

If only YT had been reading these threads... they could have saved themselves a half billion.

What Psound said. I wonder how Hulu does...

The last I read is that analysts were speculating that they were making a very small profit (like YouTube, Hulu is not specifically broken out in any parent companies earnings). At the time they were still putting money into growing the market and advertising, as well as determining the best way to use the advertisers they have. I know they felt comfortable in adding more ads to each episode and have already noticed the change (I watched Dollhouse the other night and they had a 30 second ad in just about every spot where they would have had a 2-minute ad in broadcast). They can get away with less ads online since the per user revenue/second ratio is better for the networks than during broadcast... but they were trying to do what seemed like 1/10th of the overall commercials online which may be too aggressive. They can probably get away with doing what they seemed to do with Dollhouse, which is a 30 second commercial for each break that would have previously had 2 minutes worth of commercials (1/4 of the overall commercials that you get via broadcast).

I'm not sure where they advertise/promote but when I ask people about Hulu they have no idea what it is.
The lack of ads may be tied to the general pullback in ad money. One has to look no further than the local newspaper or regular tv to notice the big players who advertise heavily have pulled back sharply. If you have no subscription plan in place, the ad $$ pullback will ultimately kill your business.
So again your back to storage, internet connection, payroll, light bills, rent, advertising, etc.
Bottom line...you need to make money and lots of it to grow and to satisfy investors.
Hulu has not figured that out yet. YouTube is set to crash and burn.

OMG!! The online video is DOOOOMED!!

ROFL!!

OMG!! The online video is DOOOOMED!!

ROFL!!

LOL. What does Youtube losing money have to do with Bandwidth anyways?

Obvious Blu-Ray fanboy troll. Already added to my ignore list.

Guess we didn't actually bother to read the article.

Guess we didn't actually bother to read the article.

Obviously you did not. If you had, you would realize that all the article states is that hosting video of fart jokes (or the equivalent) and not having advertisers want to pay to support that content is not a money-maker.

Advertiser support of quality (professional) long form content is on the rise with good reason. It is a solid model, and everyone involved in the production and distribution of media is involved... including major players each realizing the importance and solid business that it represents.

Its been fun.

Despite them not being able to attach ads to the crude user content (or professional content uploaded by users who do not own the copyright), YouTube is able to make money off of quality produced content.

A site like Hulu that does nothing but quality content is in a good position to be very profitable:

Spencer Wang, the analyst who wrote the Credit Suisse report, said in an interview that the clips that YouTube is able to derive revenue from deliver profit margins higher than 35 percent....

http://www.nytimes.com/2009/04/17/business/media/17youtube.html?_r=1&hp