Charbax.com

I like to speculate on Youtube’s potential for profits and revenues on my blog in those previous posts: http://charbax.com/2009/04/09/what-google-pays-for-youtube/ , http://charbax.com/2008/08/14/current-global-youtube-bandwidth-might-be-126-petabytes-per-month/ , http://charbax.com/2008/08/07/google-should-activate-overlay-youtube-ads-now/ , http://charbax.com/2008/06/28/youtube-needs-to-change/ , http://charbax.com/2008/04/30/when-google-starts-to-revolutionize-youtube-using-overlay-advertising/ and http://charbax.com/2008/01/09/i-just-interviewed-the-youtube-founders/

Today Youtube announces officially that they are serving more than 1 Billion video views per day. So here are my latest calculations posted to: http://www.techcrunch.com/2009/10/09/youtubes-new-logo-shouts-from-the-rooftops-1-billion-views-per-day/#comment-3027990

Let’s calculate:

1 Billion views per day, if average 30 seconds per view, if average is 300kbit/s video bitrate = That’s “only” 1125 Terrabytes of video streaming bandwidth per day.

Let’s guess Google pays $0.01 per GB of bandwidth (because they own most of their bandwidth infrastructure caching all videos as close to viewers as possible). That would mean that Google would be paying only $11250 in bandwidth per day.

If average Youtube video view is 1 minute, that would still only cost $22500 per day at $0.01 per GB.

If Google pays as much as $0.05 per GB, and average video length is 1min and average bitrate is 300kbit/s, that’s still “only” $112500 per day to host the worlds biggest video site reaching hundreds of millions of viewers all over the world.

Now let’s consider Google may be “only” monetizing 20% of those views at a rate of “only” $10 per 1000 views with overlay advertising in partner/copyrighted/claimed videos:

If 20% of Youtube videos are monetized at $10CPM, that’s $2 Million in revenues for Google per day, for 200 million overlay and other ad impressions per day.

Overall, according to my calculations, Google may be spending between $8.2 Million and $41 Million per year on bandwidth to deliver all those video views.

And according to my calculation and speculation, if 20% of video views are monetized by overlay and other ads, Google could be making upwards $730 Million in revenues per year.

$730 Million -  $41 Million = $689 Million in profits for Google on Youtube each year. Of which they split about half to the content providers.

Youtube could still be a very huge source of profits and revenues for Google, and my calculations are probably much lower than Google’s really potential for monetization with this.

I believe even user generated content can be monetized, more and more advertisers only care if they can sell stuff to the viewers through those overlay ads.

I also posted this comment on the official Youtube blog: http://youtube-global.blogspot.com/2009/10/y000000000utube.html?showComment=1255103825750#c9092045352321286663

3 years, why can I still not even apply to become a Youtube partner just because I am not a resident of USA, UK, Germany, France, Japan, Spain, Canada, Australia? How about the hobbyists of the 200 other countries of the world, are they not allowed to turn their hobbies into a real business?

All this time, still no real way to sell things with Google Checkout or whatever directly from within the videos. Still no automatic subtitles generation and automatically translated subtitles in all languages. Still no regular video-downloading support! No Micro-payments for monetization of really high quality streaming and downloading!

The video recommendations algorithms still suck. No really good platforms to watch Youtube on a set-top-box. No desktop uploader with resume and maximum upload bandwidth features, no way to access ones originally uploaded videos!

3 years, still no way to re-upload better quality of videos, still no easy way for regular people to claim ownership of video and audio content when other users pirate your content. Still no way to edit out the music of a video with your own alternative legal music.

3 years, still no alternative to the crappy Flash format!

OK, I appreciate that the bandwidth that Youtube provides for 1 billion daily views is absolutely amazing work in terms of bandwidth management and hosting. Though seriously, you got 1.65 Billion dollars for it, Google has the best PHD engineers in the world, you are a lot of developpers who should be able to improve things even faster at Youtube. Seriously, get to work now and release these features! You actually have the responsability to make these features work now.