If you think YouTube is yesterday’s news and the world only communicates in 140 characters these days — think again. There were some insane numbers reported this week that highlight the pros and cons of being one of the web’s most successful content aggregators.
According to the company, there are now 20 hours of video uploaded every minute — yes, every minute! Or call it 3 hours every second — any way you slice it, that’s surreal. And as another data point, Nielsen this week released numbers for online video usage and they’re up 53% over last year. Good thing as all that uploaded content has to be watched by someone to make it at least minimally relevant to the cosmos.
And don’t fall into the trap of believing it’s all high school girls lip-syncing radio hits. Big brands like Lions Gate Films, Wired Magazine, the BBC and the Mythbusters guys are all using YouTube Channels to distribute their content in yet another format. This functionality begins to move YouTube toward consideration by marketing managers across multiple industries. Investing in a YouTube channel — primarily the content production costs — could be the just the competitive differentiator for a retailer looking to set themselves apart.
And now the downside of massive content: bandwidth costs. According to an April report from Credit Suisse, YouTube is potentially staring at a $470M loss in 2009. While digging hard on paid deals with brands like ESPN, the bandwidth costs are estimated at $1M per day — or 51% of expenses. WOW!
I’ll leave the Google-YouTube analysis for a later blog entry, but suffice to say it’ll be amazingly interesting to see if YouTube executives can create a monetization strategy that outruns their bandwidth costs. The “build audience now, monetize later” strategy certainly has a tipping point where things get incrementally harder.
