A Bit of Perspective
In general I found this I, Cringely post about Veetle a bit boring, but the first paragraph is great:
YouTube made two fascinating announcements recently: 1) viewers are now downloading an average of two billion videos per day on the service, and; 2) YouTube is almost showing a profit for Google, its owner. Think about the glorious inefficiency embodied in that latter statement: two billion downloads per day just to break even. And this is supposed to be the future of television? Hardly.
For me it was one of those zoom out moments where all of a sudden someone puts into perspective a number that’s come to seem pretty regular. Two billion is such a massive number (I assume he means streams, not downloads) and it is pretty amazing that it takes that sort of scale to make money in the game YouTube is in. I mean it’s great if they’re making some cash, but as Cringely points out, that’s pretty maddening.
Hi, I'm 
I think that its a misleading stat and mistakes correlation for causation. Youtube is not break even BECAUSE they are serving 2bn videos per day, they happen to be break even and happen to be serving 2bn ads per day.
They are break even as they have finally worked out how to advertise effectively on the site, and they also happen to have grown to 2bn video spools per day. The two are not related.
Yes, I agree. It is a bit misleading … Though, to be fair, their business does require a massive amount of money to serve a massive amount of videos which they make a tiny amount of money on that equals a massive amount of money in aggregate … Right?
It’s still a sad (or ominous) fact that turning a profit on an internet service requires so much volume.
Video streaming is relatively costly, but that’s not the reason for such a long string of hemorrhaging. It is that internet culture has decided that all of this content is to be free, which changes the dynamics of goods and services more rapidly than any other period in history. Makes the industrial revolution look like a small process change.
I wonder how much money it has cost to run YouTube until now, where they’re almost showing a profit. I bet the number is staggering. And I’d like to see the projected time it will take for them to recoup that debt. Even if aggregating a sizable amount, they’ve got a long road back to zero.
Speaking of the conundrum of free goods online, did you catch PSFK’s piece on what it would take for a musician to make minimum wage selling music online? Sad but true. YouTube’s Mystery Guitar Guy gives me hope, though.
On top of your insight/perspective there is something comical and ironic about you having to assume Cringely meant streams when he said downloads. You could over-examine that statement but there is quite a difference between what a download means, a person can have it on their hard drive, play it whenever they like, post it themselves, share it vs. a stream which is owned by the cloud and you pay for that stream with your attention.
Yes, hopefully he meant stream and not download and you are generous in your assessment. But how funny that something which gives you perspective still REQUIRES that you parse it so that it makes any sense at all. Can you say, so fragmented we are near the Tower of Babel?
That is a huge number. I saw a number ~6 months ago that showed that every 15 minutes anohter 24 hours of video viewing was uploaded to YouTube (but you prolly wrote about that then ;)
But the point I wanted to ad is that serving video is very expensive and does not scale that well. So more demand doesn’t mean a more efficient business which is why it’s been so hard for Google, the master of internet advertising to break even on all the traffic.
But I have a feeling their inflection point will come soon and then the profit will snowball.
Actually, there is no real difference between streaming and downloading. Either way the information is sent and stored on your machine. With streaming you look at the data as it comes in. With a download, you need to wait for all the data to arrive before you access it.