Is YouTube doomed?

[JRMDC]

http://www.businessinsider.com/is-youtube-doomed-2009-4

[JimThias]

Killed by popularity...wow. Oh well, others will be there to pick up the slack if and when doomsday comes.

[TheRoadForeman]

When this raw deal of a recession is all said and done, I think we will all be paying to enjoy our ( now ) free and favorite sites on the www. IMHO atleast......

[Nscalemike]

Something seems wrong with their business model....if it costs almost 3/4 of a Billion dollars annually to keep that operation going.

[Chris Kilroy]

When this raw deal of a recession is all said and done, I think we will all be paying to enjoy our ( now ) free and favorite sites on the www. IMHO atleast......

I think you're more correct than most people realize, Kevin.

The internet has been the haven of unlimited, uncensored, and (most importantly, to most people) free information for the 10 years since it really became mainstream. As part of the industry, I'm a firm believer that this "free ride" will be coming to a surprisingly abrupt end sooner than later, for several reasons:

- The lack of advertising revenue to cover costs in the future. This is a double edged sword. On one hand, as internet display advertising has matured, people have obviously become more familiar with it and learned to much better "tune it out." Now, I don't think the online ad industry is going to go quietly into the night. Ads will become more intrusive, eventually, I believe, more resembling TV-like ads where users will be expected to sit through a few minutes of "commercials" before continuing onto what they were doing.

On the other hand, online ad blocking software has really become more mainstream and has started to significantly cut into bottom lines. If this trend keeps up, it'll reach a breaking point, and many sites will either be forced to disappear or go the way of the rising number of sites that are starting to charge for full access privileges.

- Increasing costs/Infrastructure Limitations. As the internet grows in popularity, especially with explosion of high-bandwidth video media, the usable limits of the worldwide infrastructure are quickly being approached. Steps to make the internet more of a "pay for what you use" model are already being tested in certain markets, with Comcast, Time Warner, and others implementing tiered bandwidth programs (http://www.npr.org/templates/story/story.php?storyId=103041709), where users are, in effect, charged by the gigabyte. As use of the infrastructure approaches "critical mass," bandwidth is going to get more expensive either due to simple supply and demand, cost increases to pay for infrustrature improvements, or a combination of both. Bandwidth, which we pay for to keep the site running, is insanely cheap right now, but I don't expect that to remain the norm.

Throw all that and other unknowns all in together and I think the situation is ripe for a major shift in the way online business is conducted in the next couple of years, if not sooner.

The old saying of "there's no such thing as a free lunch" holds so true in this situation. If costs are rising, usage is rising, and revenues are falling, something has to, and will, give. People have been programmed into thinking that everything on the internet should be free, with minimal interruption and intrusion, and that they're somehow "entitled" to it. Lots of people are in for a rude awakening, I'm afraid.

[trainboysd40]

^That's depressing.

[John Fladung]

With Comcast you are now given 250GB of bandwidth a month. Even for the amount of time I spend on the internet each day I'm far far far from reaching that limit. I know many were crying over this limitation but I really don't see the big deal.

[Nscalemike]

...and I suppose our representatives in Washington, will find this all as a new source of taxation revenue

[Joe the Photog]

It will be hard to start charging for what you're now getting for free. I wouldn't do it.

[Chris Kilroy]

It will be hard to start charging for what you're now getting for free. I wouldn't do it.

As I've tried to make clear in past discussions on this topic, we aren't actively looking to change anything, at this point.

Suppose, however, that the scenario I outlined above does indeed come to fruition. If ads and Elite memberships aren't covering the costs, what are we supposed to do? Pay it out of our own pockets?

There are plenty of sites out there that used to be "free" and are now driven primarily by compulsory paid memberships. I'm under no illusion regarding the ramifications if we were forced into the difficult decision to begin charging. We'd lose members, likely lose photos, etc. In my opinion, it would be better than losing the whole site though.

[Joe the Photog]

Chris;

I mainly meant I personally wouldn't start paying for what I'm getting for free now. I understand business owners have to make some tough decisions at times. But when Trainorders went to a pay site, I didn't see any reason to start paying. Most of the reason I went there was for the forums, but a lot of that information comes from select YahooGroups anyway. Same thing with Trains.com Newswire. Cut and paste their headlines into Google and you can usually find an article that tells you the same thing from a local newspaper.

Of course, both of those web sites sems to be doing fine without me paying, so I wouldn't worry too much about it. Besides, I heard Colin Cowherd last week on ESPN radio say we're almost out of internet space anyway. This was right before he told his listeners to go to his web site and download podcasts of his show.

[MichaelJ]

I have done a number of online media units throughout my degree and firmly believe that it is one of the most effective forms of advertising (print, radio, television, etc). As Chris noted above, today, we have a large amount of advertising clutter on the Internet. This means that the effectiveness of each advertising impression on a potential consumer is decreasing. It is possible to break through this clutter using interactivity and displaying advertisements that elicit an emotional response. The days of a print advertisement moulded to fit a static web banner are all but gone.

Today, we are starting to see advertisers capitalise on the interactive nature of the Internet. They are able to utilise audio, video and Flash animation to capture a potential consumer's attention. Research has shown that rich media generally attracts more attention and stimulates more of a response from the consmer than static advertising. These interactive advertisements are often termed advertainment and includes, advermovies, advergames, or humorous Flash animations. If executed correctly, consumers do not even realise that they are the 'victim of advertising' because the brand/product message or whatever the case may be is being absorbed sub-conciously. Thus, the advertisement may not be viewed by consumers as obtrusive and yield higher effectiveness (click through, brand/product awareness, sales, etc).

Everyone has seen a 'Priceless' MasterCard, Bud Light, or RSPCA/WSPA Advertisement. How many realised it was an advertisement before the very end? Why could you recall these advertisements over other advertisements? In these two examples, we could safely conclude that their effectiveness has been heightened by eliciting an emotional response (humour, sadness or otherwise). This is the direction in which online advertising or advertainment is heading.

I could go on, but I'll bore everyone to death.