Anyone who has read my blog before knows that I think YouTube gets way too much credit in the industry that they don't deserve. While I don't disagree that YouTube deserves credit for creating a platform that has allowed any regular Joe to upload and share video at no cost to the individual, that's all YouTube has done. Sure, that platform has had a big impact on the lives of a lot of people, but each time YouTube has a birthday, or delivers another billion streams, Chad Hurley wants to try to convince us of why YouTube should get all the credit, for everything in the industry.
In his latest post on YouTube's blog, talking about YouTube's fifth birthday, Chad makes all kinds of references to YouTube's "innovation", "experience" and how they provide the "revenue models", "tools" and just about anything else a content owner needs to succeed. The problem with this thinking is that YouTube didn't contribute to the technology of the industry at all. They haven't created any codecs, new delivery protocols, created any industry standards or even led the pack by adding new functionality.
While Chad talks about all of YouTube's "innovation" let's not forget that they don't even support streaming, don't support live, only recently starting supporting HD, have a cap on the size of file that can be uploaded and have plenty of other limitations of their service. Show me one feature of YouTube that they lead the market with, or a feature the rest of the industry has adopted.
And do I even need to mention how YouTube's platform was essentially allowing others to steal content and re-broadcast it on the web without any kind of control? For all the talk of YouTube's "innovation", how is it that it took a lawsuit for them to actually do something to address the issue? Shouldn't they have seen that coming? And what about Chad's assertion that YouTube's goal is, "To set the standard in online video delivery"? We all know they aren't doing that. No one thinks of YouTube for the quality of their videos, they think of the platform as a free and easy way to get content online and that's the problem.
As the industry debates when YouTube will become profitable, one thing needs to be kept in perspective. Without YouTube being sold to Google (GOOG), it would be out of business. The only reason YouTube is even around in the market to have the chance to turn a profit is because Google has deep pockets and is willing to lose a lot of money on a long-term bet. But YouTube is not the one making that possible, Google is. So if anyone really deserves the credit it's Google, for allowing YouTube to burn some of their cash and giving them a shot. Google is giving YouTube the time to be successful and if and when it turns a profit, it will be as a result of Google's cash and not because of YouTube's "innovation". As an industry, why do so many people continue to heap praise on companies that can't turn a profit, let alone after five years?
I don't know what the percentage is, but the overwhelming number of content owners on YouTube will NEVER make money. YouTube delivers over a billion videos a day but only monetizes a billion videos a week. That means they are only generating revenue from about 14% of all the content streamed on the site. While that number, or one close to it, might be enough for them to make money, it clearly goes to show that the average content owner on YouTube will never see a dime. And to me, that's ok. YouTube was started as a simple way for people to share videos and that's it. The problem is that Chad says that, "Five years into it, we're as committed as ever to the core beliefs and principles that guided YouTube's creation." But that's not the case anymore since the company has had to try every business model in the book to try and survive and make money. Remember YouTube for the enterprise?
Three years ago, in an article on Forbes, Chad once again sang YouTube's praises and told us how YouTube was going to allow all this new talent to be discovered via the web and make everyone a lot of money. Clearly that has not happened. While many are quick to point out that YouTube still dominates Hulu in terms of traffic numbers, Hulu is monetizing almost 100% of their content. So would you rather have less traffic that is all monetizable or lots of traffic that you can't make any money from?
Why does YouTube get so much credit just because they have a lot of eyeballs? Back in 1999 and 2000 the portal space was all about eyeballs. The value and stock price of TheGlobe.com, Yahoo.com and many others were all based on how many eyeballs they had. How well did that work out for them when it came time to actually being able to generate revenue from those eyeballs?
YouTube is no different than many other sites, like Veoh, except for the fact that YouTube is still around only because they are owned by Google. Without that, YouTube would not exist in the market. They could not afford to. I have no problem with YouTube getting the credit for what they have done, but they get far too much credit for what they haven't done and for technology that they have not developed, created or led the market with. Think I'm wrong? I'd love to see in the comments section what "innovations" you think YouTube has brought to the market.
Disclosure: No positions