YouTube Is Google's Moneypit

| 8 Apr 2009 11:12

Despite billionaire Google taking over YouTube, the company is gushing money, costing Google $470 million this year.

Why so much money? Well, YouTube simply doesn't generate money from advertisements, thanks to little programs like AdBlock and the public's general disinterest in anything that doesn't involve overly-dramatic gophers.

Now, Google is no slouch in this area, having made its billions purely through the power of advertisements. This means either one of the best advertisers can't make money, or that there is a way that just can't be found. One of the main problems is that for every Nom Nom Nom there are a couple of million other videos that don't get watched by anyone other than their participants.

You may remember, or are still suffering from, the ban on the UK or Germany receiving some music videos and this is due to Google having to pay 0.22p (or a similar amount in Euros) for each video watched. And Google simply doesn't want to pay PRS (UK rights) or GEMA (German rights) that much.

Google America, that is. Google China, on the other hand, pays nearly 2p per song shown, but cross-subsidizes by letting the increased footfall flood to the rest of its pay-for site.

It's somewhat strange that a communist country seems better at making money than a capitalist country, don't you think?

Source: The Register

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