Even with a billion viewers, YouTube isn’t making money
Despite “Gangnam Style” having over two billion views, hosting countless other viral clips and netting over a billion users per-month, YouTube can’t seem to turn a profit. How’s that? Well, after paying for the infrastructure that makes Google’s video empire possible (and its content partners), The Wall Street Journal says that YouTube didn’t contribute to Mountain View’s earnings.
The culprit, apparently, is that most users arrive at videos via links, rather than daily visits to the YouTube homepage where Google could charge a premium for ads. WSJ also reports that the site’s reach isn’t very wide either, with one source’s estimate that nine percent of viewers account for a whopping 85 percent of online-video views. That makes it a much less appealing audience for advertisers than traditional TV programming, despite the outfit’s increasing investment in original content.
Google’s hoping that the Music Key subscription service, among other ideas, can hold the tide of red ink back and turn that sea black. Another method is with targeted ads, so you can get inundated with sales pitches for stuff you’ve recently browsed on Amazon. WSJ’s sources say that those might be a bit harder to add than Google previously expected, though, and thankfully could take some time to roll out. At least there’s some form of silver lining here.