Since paying the GDP of a small country for YouTube, Google has turned the site into a more legitimate, more stable, more popular proposition. Unfortunately, it still doesn’t make any money from it. It could do so quite easily, but it would mean changing a key tenet of the site, and risk the wrath of its loyal user base.
The YouTube Money Pit
There is an ongoing debate amongst analysts and industry watchers over how much profit or loss Google brings in from YouTube. Credit Suisse and RampRate both agree that YouTube is bringing in a tidy amount of revenue. And both agree that the operating costs of running the site, and hosting all those millions of videos, totals more than the current revenue.
The debate concerns how much Google is losing from YouTube on an annual basis, and what Google can do to counter the problem. YouTube has already had a wealth of monetization solutions thrown at it, and the UGC (User Generated Content) is slowly but surely being replaced with more professional, long-form content. Unfortunately, this hasn’t yet cured the money woes.
Charging For YouTube Uploads?
One of the big problems still facing Google is what to do with all those videos uploaded on a daily basis which cannot be monetized with adverts for fear of infringing copyrights and facing the wrath of the person, company, or organization whose copyrights have been infringed upon. But there is one obvious solution staring Google in the face.
As suggested by Gene Munster, an analyst with Piper Jaffray, and picked up by The New York Times, Google could start charging for YouTube uploads. All those videos which can’t and never will be monetized could switch from being a drain on Google’s resources to being a bit of a money spinner if users were charged a fee for uploading them to the site in the first place.
Immediate Problems
It’s a nice idea in theory. Charging for YouTube uploads would immediately put YouTube on the front foot in terms of making a profit. But it would mean changing the very-Google idea of free-to-use, open source, accessible-to-all current YouTube to one which becomes closed-off and based on micro-transactions.
These micro-transactions would be a problem in their own right too. There are now over 20 hours of video uploaded to YouTube every single minute of every single day. That’s a lot of uploads to keep track of, filtering out which videos would need to be charged for, and then actually charging the correct users for the privilege of uploading their creations to the site.
Bigger even than that would be the loss of face and consumer trust Google would face for heading down this route. Not to mention the fact that it would effectively be putting short-term financial gain ahead of the chance to be at the forefront of the online video revolution which is set to continue to grow for years to come.
Conclusions
I can’t see this ever happening, and it would be sad to see it do so. But I wouldn’t blame Google if it did decide to try something as out of character as charging for something which has previously been free. It would bring in some much needed revenue and help streamline YouTube at the same time. And putting an end to all those endless cute animal clips wouldn’t necessarily be a bad result.
