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Comment by jaspax | Hacker News Reader

Here's the rub: I strongly suspect that YouTube is not profitable, or is just barely profitable, such that it would be difficult to run as a separate company from the rest of Google. This is even more true for Maps. Breaking apart Google would substantially risk those businesses.

On the other hand, maybe that's a good thing.

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> Here's the rub: I strongly suspect that YouTube is not profitable, or is just barely profitable, such that it would be difficult to run as a separate company from the rest of Google... > Breaking apart Google would substantially risk those businesses.

Isn't that kind of the point of "break up google" though?

That "they" (big tech) destroy any other businesses in a similar space (video in this case) that isn't similarly an ads or social-media giant? Or that tech "eats the world" in ways that aren't always strictly good?

Wouldn't this be more in favour of breaking up Google? If YouTube is unprofitable, then Google is essentially dumping this service. It is harming competitors who do not have deep pockets of Google to bankroll their service. Breaking up YouTube means there would be a more level playground.

Or a YouTube style site just wouldn't exist...

There are other sites out there offering similar services, albeit at a different scale. You could argue that some of them (like Twitch) are being dumped on the market in a similar manner, though.

Twitch's feature set is not that different from YT's at this point. They both have very elaborate streaming services, a financial support mechanism, viewable archives with seeking, automated muting for copyrighted content, and recommendations systems.

Fwiw Twitch is now owned by Amazon, not sure if it was/is profitable though - but it may be that the cost of such massive video platforms is too high to run without a parent company that can subsidise the costs.

In the case of Google/Amazon this makes additional sense because they own the cloud infrastructure, which I assume is the biggest cost of the platforms.

I agree - There is no way that Youtube could compete without access to google resources. If they had to pay for their own bandwidth, hosting, transcoding, etc while surviving off adsense revenue (paying same google "commission" as everyone else), they would quickly drive themselves into bancruptcy simply due to their popularity!

They are stifling competition because they have unlimited funds to throw at anything they want. They should definitely be split up.

Would users get a better service from the successors of YouTube? Would we have to watch more ads?

There's a freemium video service in japan called Nico Video [0] that has been around for about the same length of time as Youtube. On the free tier, you're essentially limited to a really shitty video quality, somewhere around 480p. It also has ads and some kind of rate limiting. Besides subscriptions, they also do tie-ups and other PR related stuff. Video quality has never really been that good even on the premium tier. Their whole selling point seems to be community interaction, where by viewers can post comments directly into the video stream [1]. As far as I can tell, they've been bleeding money for the last decade though they seemed to have turned a profit this year.

My conclusion is that no, users would not get a better service.

[0]: https://www.nicovideo.jp

[1]: http://blog.nicovideo.jp/en_info/2013/01/post-037484.html

[2]: https://ja.wikipedia.org/wiki/ニコニコ動画#ビジネス

Impossible to know for sure, since any better service is going to get suffocated by Google's market power unless it's backed by another huge player like Amazon.

YouTube existed without Google. Google bought them.

And it wasn't profitable then, either.

How could that be? Server costs? Seems like YouTube would be raking in the cash.

The sheer magnitude of video data they have to deal with is enormous. They, along with netflix, comprise the majority of all internet usage. Yes, the videos you see on your front page with 10s of millions of views are raking in the cash and have negligible hosting cost. Those videos are subsidizing the 10s of millions of videos that get 4-5 views apiece.

> Yes, the videos you see on your front page with 10s of millions of views are raking in the cash and have negligible hosting cost.

But they must have huge hosting costs…

I've heard the line they're right on the edge of profitability but I've never gotten any real confirmation. I was younger when I heard that and I always though youtube was just a cash cow. But think of how much servers (huge streaming metrics for each person watch + encoding servers), bandwidth and CDN must cost them. Ever with their own cloud, that has got to be huge. I worked at Amazon Instant Video and our CDN bills made my eyeballs pop out like I was a loony toon character. Traditionally they've only made money video advertising but I'm just not sure thats a great business model for video anymore. And, also throw in live streaming that people have been using, especially during covid, which is also free, and you have even more load they pay for free.

An idea I always had was embedding a big zip or something into the mp4 format and uploading it for storage. Would they save the original files for download or would they be encoded to a lower bit rate and make them unusual. Maybe data encoded in an audio track would be better? Sounds like more than a weekend of experimenting but would be a cool little project.

Server and storage costs must be astronomical - last time I checked something in the order of 48-hours worth of content is uploaded every minute. Coupled with the fact that they've had a couple of issues with advertisers leaving or withholding spending, I doubt what they pull in is enough to cover expenses.

Like others have said, their storage needs are staggering. I would not be surprised to find that YT's storage is bigger than the entirety of Google's web archive, which is mostly text. Possibly much bigger.

If YT were not part of Google, they would still need Google-scale infra in order to handle the insane number of pixels they're streaming every second of every day.

Well just think about how much it would cost you to host, encode in many many formats, billions of hours of video, consuming exabytes of storage, providing a fully reliable service for 15 years.

Might also be worth considering why there are effectively zero competitors.

Their transcode, storage, and compute costs are what lead me to also believe YouTube is not profitable, or just barely profitable.

If those costs were high they'd have long ago banned the spam accounts that upload autogenerated garbage.

"[In Q3 2018] YouTube removed about 1.67 million channels and all of the 50.2 million videos that were available from them. Nearly 80% of the channel takedowns related to spam uploads, YouTube said."

https://www.businessinsider.com/r-youtube-under-pressure-for...

The remaining 20% were apparently taken down due to nudity and other policy violations.

To be clear: I have no idea whether they're profitable or not. Just pointing out this article.

Thanks.

I strongly agree. I find it telling that no competitor has ever been successful despite YouTube making every wrong design choice possible.

How about twitch?

Twitch is bankrolled by Amazon at this point so it's hard to say whether it's actually a good example. It started out as a live streaming service (for games only!) and slowly pivoted towards YouTube while YT pivoted towards Twitch with the addition of live streaming, subscriptions, etc.

> I strongly suspect that YouTube is not profitable

I strongly suspect that YouTube is profitable, with all these ads.

I wonder how profitable the ads are, given how aggressively they try to push me to signing up for their subscription (also, they seem to increase the number and length of the unskippable ads when they promote their subscription).

I ended up installing Newpipe instead, which is a much better experience.

Seeing how everyone installed Chrome by being pushed the same way, there are probably a lot of people that sign up for this service... so they probably also make a good chunk there.

They don't appear to bug me much though... maybe ublock origin blocks those ads.

On desktop, yes. But on mobile you either have to accept the ads or use Newpipe.

> I strongly suspect that YouTube is not profitable, or is just barely profitable

Why suspect when you can Google...

"On an annual basis, Google says YouTube generated $15 billion last year and contributed roughly 10 percent to all Google revenue. Those figures make YouTube’s ad business nearly one fifth the size of Facebook’s, and more than six times larger than all of Amazon-owned Twitch."

https://www.theverge.com/2020/2/3/21121207/youtube-google-al...

That's revenue, not profits

That's revenue, not profit.

I didn't see any mention of profit there.

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