Why YouTube’s Losses Are Much Smaller Than Expected

Picture 3There’s been a lot of buzz about a month ago about how YouTube loses money and is a horrible business.  Most of these articles came after Credit Suisse’s published an estimate of YouTube’s losses at $470M a year.  This is a large number and people pounced on it. However, there is a good report i just read (PDF only and downloadable here) that challenges Credit Suisse’s assumptions with some more accurate numbers.  For instance, Amazon Web Services could provide storage for 50% of the costs included in CS’s study.  The survey ends with:

Regardless of what you may hear, YouTube costs are a fraction of any other company running similar operations. Most of Google’s bandwidth is free or near-free; its hardware is cost-optimized; and its data center costs are mostly committed or sunk. The top customers of our sourcing advisory service, whose prices are on average 20% better than the average market level, cannot deliver content as cheaply as Google’s massively scaled operation. Surprisingly enough, the ones that come closest are often thosethat leverage the scale of others through using cloud services.
But even if a fair accounting of its costs showed a loss, YouTube gives Google the ability to achieve needed improvements in lowering cost of other operations. Loud stories about YouTube’s losses can only help deter copyright lawsuits and demands from content owners. Skepticism is warranted — but be ready for surprise news of profitability in the future.

The article does explore the upside of allowing the market to believe the YouTube business is quick unprofitable.  With license-holders eager to renogotiate and reap larger profits, it’s better to all them to perceive that it’s much too expensive to host and deliver these files and thus license payments should be low.

But this is clearly wrong.  In yesterday’s earnings call, Google had this to say about YouTube:

“Monetized views” on YouTube have more than tripled over the last year, said SVP Jonathan Rosenberg. Executives would not say whether YouTube was profitable, although they did say it was on a trajectory to become a “very profitable business for us” in the “not too distant future,” giving a collective heart attack to analysts who have speculated about how much money the site is losing. In a follow-up call with analysts, CFO Patrick Pichette said that the company wanted to reaffirm that YouTube’s business model was credible. “There’s been so much press with all these documentations of massive costs and no business model,” he said.

Interesting to think about next time someone speaks up about how horrible the YouTube business is.

Spying on Myself and LifeTracker

Picture 3Fred Wilson had a post this weekend about MyWare and his love of it. I couldn’t agree more as i’m a huge proponent of tracking my own activity. For instance,

Fred wrote that he likes to keep this data because, “I am interested in this sector of implicit behavior data. I believe that publishing the things I do on the web will allow web services to get smarter about me and give me better experiences.” I keep track for different reasons.  I actually like to keep data about myself. I find it interesting and i use to remember events of my life.

But i see it going even further.  What i wrote was:

When i look at the web, i see people trying to capture experiences. They capture photos on flickr, videos on youtube, and notes with people on email. Their life is being tracked but not in a comprehensive way.

I could imagine a site – call it “Lifetracker.com” which tracks all the things you do. You plug in last.fm, gmail (or other email), google voice, flickr/picassa, twitter, credit card (mint), youtube and other web services. I then matches 3 things: the data, the contacts, and the time. It creates a timeline for you and marks who you’ve been interacting with and when. There’s an API so each new web service you start using you can plug into it.

There are several benefits: (1) as you mentioned, you can give this data to services for recommendations; (2) you can search your life. If google is web search, twitter is real-time search, this would be “me search”; (3) just like we don’t remember phone numbers anymore b/c we put them into our phone to retrieve any time we want, we can start throwing information into lifetracker such as meeting notes, audio recordings of phone calls, etc. so we don’t have to write stuff down and remember it. Use the cloud as a memory storage instead of your brain

I see this coming and it’s really exciting to think about it.

I do think it will happen.  What do you think?

Thoughts about Bruno

sacha-baron-cohen-bruno-gq-july-2009-cover

Saw Bruno last night and here are some thoughts:

  • The trailer was hilarious BUT gave away way too many scenes.  Watching the movie, I found that there was a setup and you already knew what was going to happen.  This was true for the camping trip and the military attempt. Similarly, he gave away too many jokes from the movie on the Today show too which i posted about yesterday.
    • Trailers giving away too much of a movie is a monstrous pet peeve of mine.  I hate that films do it. I understand that it helps get people into the theaters more but it really degrades the actual experience.   This is a whole other post for me.  But man does it tick me off.
  • With Borat, they explained the camera because they were filming everything for the station back home, and you could tell when there was a hidden camera.  For Bruno, there was no explanation why the camera was following Bruno around for most of the time.  There are some scenes where you wonder how they are filming it – like the swingers party scene.   It made the movie feel less authentic and more fictional
  • There are some great scenes that really show the insanity of America and of Hollywood.  Some parents should be totally ashamed of themselves for how they pimp out their kids.  Bruno is able to expose the absurdity of LA really well.
  • The movie is lot like the movie Jackass except instead of doing anything just to be dumb, Bruno does gay things just to be dumb and films the reaction of other people.   There’s actually quite a lot of similarities between the two
  • I found that the narrative of the movie was pretty contrived.  It was more a series of funny events strapped together than an actual story.  Sure it tried to be a story of Bruno’s attempt to become famous but that is not really an arc.
  • This is the best marketed movie i’ve seen in a long time.  Everywhere i looked it was Bruno.  His appearance on Letterman and The Today show were great.  I really felt that this movie was an event which resulted in me marching out on opening night. I have to hand it to them – really great marketing.

So, i think as you can see, i felt the movie was hyped up abit too much for me and didn’t fully deliver.  I still think it was pretty damn funny.  I laughed a lot.  But, i think it’s more of a Borat sequel than another innovative step.  Personally i think Borat was better or at least more novel.  I’m going 7.5 out of 10

Bruno This Weekend

bilde

I’m headed out to see Bruno tonight and i’m pretty excited as i’ve read some great reviews and saw that it’s at 71% at Rotten Tomatoes.  Ebert says:

Here is a film that is 82 minutes long and doesn’t contain 30 boring seconds.

that’s a pretty good endorsement – especially from someone who isn’t in to sophomoric comedies that much. I like Borat so i’m expecting great things. I actually think that people are much more outwardly homophobic than racist so i can imagine that Sacha Baron can have much more fun with peolple with Bruno than he did with Borat.

I got even more excited when i saw Bruno go on the Today show and talk about Isreal and Palastine and his war on carbs.  It is hilarious:

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Marc Canter’s Big Plan

I last saw Marc in Paris
I last saw Marc in Paris

Over the past 8 years i’ve become friends with Marc Canter. I first met him while working at AOL as we needed new and fresh ideas there and boy did he have them.  We asked him again to come and help us out at Ruckus and he delivered again.

Marc lives in the San Francisco area – or at least he did. Marc has announced that he’s leaving heading to Ohio. You heard that right – OHIO. Why? Because he has big ideas and sometimes the best place to do them is not in the Bay Area. He’s also planning on tapping into some US resources that haven’t been utilized – unemployed people. His plan involves the unemployed force, a non=profit, private equity, grants, and lots of new ideas. You can read about it more here

I wish him the best of luck and hope to drop into OH soon to hear more about it.

Let's Talk About Revolutions (in media)

Pop!Tech 2008 - Clay Shirky

I reread this morning Clay Shirky’s great SXSW piece about the media business and i wanted to share some of his thoughts here.  Let me go through the end of the article a bit.  He starts:

Elizabeth Eisenstein’s magisterial treatment of Gutenberg’s invention, The Printing Press as an Agent of Change, opens with a recounting of her research into the early history of the printing press. She was able to find many descriptions of life in the early 1400s, the era before movable type. Literacy was limited, the Catholic Church was the pan-European political force, Mass was in Latin, and the average book was the Bible. She was also able to find endless descriptions of life in the late 1500s, after Gutenberg’s invention had started to spread. Literacy was on the rise, as were books written in contemporary languages, Copernicus had published his epochal work on astronomy, and Martin Luther’s use of the press to reform the Church was upending both religious and political stability.

I want to draw the obvious parallel to today’s revolution in publishing and in technology. I belive that just having email and IM has increased the literacy in America (maybe the world).  Not 15 years ago no kids were daily expressing themselves in written words, now they do all the time.  In 1996, i would frequently get emails in ALL CAPS and poorly written.  Now it’s a must-have skill.  But let’s continue with the speech….

What Eisenstein focused on, though, was how many historians ignored the transition from one era to the other. To describe the world before or after the spread of print was child’s play; those dates were safely distanced from upheaval. But what was happening in 1500? The hard question Eisenstein’s book asks is “How did we get from the world before the printing press to the world after it? What was the revolution itself like?”

Chaotic, as it turns out. The Bible was translated into local languages; was this an educational boon or the work of the devil? Erotic novels appeared, prompting the same set of questions. Copies of Aristotle and Galen circulated widely, but direct encounter with the relevant texts revealed that the two sources clashed, tarnishing faith in the Ancients. As novelty spread, old institutions seemed exhausted while new ones seemed untrustworthy; as a result, people almost literally didn’t know what to think. If you can’t trust Aristotle, who can you trust?

I find this same thing is happening with columnist and journalism.  Poor articles just get overlooked or debunked in comments.  The threshhold for well researched facts is higher as the audience is double-checking you every step of the way.  What happened with Aristotle is happenign today with every sports, politcal, and news writer in the world.

During the wrenching transition to print, experiments were only revealed in retrospect to be turning points. Aldus Manutius, the Venetian printer and publisher, invented the smaller octavo volume along with italic type. What seemed like a minor change — take a book and shrink it — was in retrospect a key innovation in the democratization of the printed word. As books became cheaper, more portable, and therefore more desirable, they expanded the market for all publishers, heightening the value of literacy still further.

Sound familiar to anyone? Can you say BLOG or TWITTER – such a simple concept.  Take publishing an article on a web page and shrink it to a blog or 140 characters.  What seems like a minor change has some profound responses.

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen.

Old stuff is indeed getting broken. Newspapers are gone or going fast.  Magazines are next.  Paper is being replaced by netbooks, iPhones and Kindles.  These devices are embracing different technologies and shorter-form content.  This is the real revolution that’s happening in front our face.  That Time Magazine you have in your mailbox will be a story you tell your grandkids about, “hey kids, get this, i used to walk to the mailbox and pick up a ‘magazine’ that had stories in it written down, printed once a week and sent to me.” and they will look at you the same way i look at my grandparents when they talk about a world with radio programs only and no TV.   Our new world has more content, better content, that is more easily shared and discussed – and it’s a beautiful thing.

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Michael Jackson Thoughts

Michael Jackson

As everyone knows, Michael Jackson died last Friday from heart complications in LA.  While i wasn’t shocked by his death, I was amazed by the reaction both by people and the media.  Some of my thoughts:

  1. First off, while it’s nice to see such happy thoughts and words coming out of the media and blogosphere, i can’t believe how everyone has sort of forgotten about the past 15 years of Michael Jackson. I mean, multiple child molestation charges with 13-year old boys.  Whatever the cause of the guilt, do you know anyone who would leave their 12 year old with him alone?
  2. Some Good Articles: There is a great recount of all those stories listed here in Vantity Fair and Ebert has posted a great article that weighs both his greatness and his fragility in a good article here called “The Boy Who Never Gave Up
  3. Thinking about his legacy, he’s definitely one of the best performers of all time – his dancing and on-stage presence seems unparalleled.
  4. While Elvis brought in Rock n’ Roll, i feel that Michael Jackson brought in pop music.  He came to define the 80’s style while adding more production value to music.  To me, he invented the genre “pop”
  5. It’s interesting to see how people react once someone dies.  The immediately become forgiven and can easily take on legendary status.  While that’s ok, i wish more people who feel this way while the artist is alive.  Two months ago nobody was saying how influential MJ was. Then hie dies and everyone in the world starts blabbing off about how influential and transformative he was.  Was he awesome? Yes.  But why didn’t people post how awesome he was before? The same thing happened with Kurt Kobain, Johnny Cash, Elvis and others.  As Chuck Klosterman says (who is an expert on his subject having written Killing Yourself To Live), “You’ll hear nobody stating how influential Boy George is, but the minute he dies it’ll come out with how he was able to break down the gender barriers before anyone else”  And he’s right.  In death, people are no longer people, they become symbols.

S'mores Keyboard

food-keyboard

This could possibly be the most delicious keyboard ever constructed.  As the Murdock family can vouch for, i’m a sucker for S’mores.  It’s probably a good thing this isn’t in my office or else i’d be getting fatter and way less productive as keys start disappearing.  Probably would last about 25 minutes.  I’d also probably rest it on my Macbook laptop so the chocolate would melt a little bit.  Yum

4 Reasons Twitter Makes My Life Better

Image representing Twitter as depicted in Crun...
Image via CrunchBase

There’s an article i read today (thanks to Lizard) about how Twitter can you a better and happier person.  The reasons listed in the article are:

  1. Transparency & Values: Twitter constantly reminds me of who I want to be, and what I want to stand for
  2. Reframing Reality: Twitter encourages me to search for ways to view reality in a funnier and/or more positive way
  3. Helping Others: Twitter makes me think about how to make a positive impact on other people’s lives
  4. Gratitude: Twitter helps me notice and appreciate the little things in life

I find all of these true.  Sometimes i want to post a tweet about my life and i have to reflect about what i’m really doing and how it’s interesting to others.  It often makes me adjust what i’m actually doing – and if i don’t do that then it makes me realize how i’m actually living my life.  In that respect, it’s quite helpful.

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