ManusJustus said:
From what I understand, all of Youtube's money comes from advertising, and the advertising business is a weak money maker, especially in a bad economy. |
The issue really comes down to thresholds and if YT ads are defaulting very often.
The problem with ads is that some companies won't show them very often, which means less money. For example, you can watch a whole 30 minute episode of a TV show on Hulu and see maybe 3-4 ads. Compare that to watching it on regular TV, and you may see 15-20 ads. That is where the problem lies. CPM is mostly similar between internet video ads and TV (sans the outliers like the Superbowl or major, major primetime affairs).
YT could do a lot of things to become profitable, it's just a matter of finding the right formula. I think that if they ran a 15 second pre-roll before every video over 30 seconds, and not default, they could do pretty well for themselves.
It's all about balancing bandwidth (which is very expensive for video) and the means to generate money for the servers.
Back from the dead, I'm afraid.
