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Comment by jdprgm | Hacker News Reader

Youtube is such a dominant and ubiquitous monopoly that it is almost easy to forget about it as a monopoly because there is so little competition to contrast against and to even remind you that there ought to be. I've wondered for years why it gets so little attention vs so many of the other tech giants that do have more competition.

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YouTube has the highest monopoly tax in all of tech.

They take 45% of YouTube premium subscription revenue. That’s higher than the App Store (30%), Spotify (30%), and any other content marketplace on the internet.

I think they get a free pass for now because they allow creators to monetize with their own native ads within videos. If I had to guess, this may become a point of contention in the future…

Serving video infinite times is vastily different to serving apps once for installation.

It’s not 45% of revenue expensive.

The fact that we’ve accepted such ridiculously high profit margins from tech companies is simply due to their network effects monopolies, and the impossibility of competing with them.

Just look at any other marketplace business with more competition, like say a grocery store or any brick and mortar retail. Their net margins are often sub-5%. Physically shipping goods across the world is far more expensive than delivering video.

Only other monopolies, like Governments, can get away with charging 45% taxes. Having known a few Youtube employees and also a few federal government employees, I would say the low stress, low effort, low fear of layoffs, low work output expectations are...ahem...similar.

> It’s not 45% of revenue expensive.

Youtubes profit margin isn't that high so it is pretty close to that, it took a long time for it to get profitable even with Google ads, unlike the digital stores that serves customers for basically nothing compared to how much revenue they bring in.

Twitch also takes around that much from streamers and they still aren't profitable since it costs more to serve the streams than they make.

Does Alphabet split out YT revenue numbers in the financial reports? The latest one listed the YT revenues, but I didn't see where the line item for YT costs was.

> Physically shipping goods across the world is far more expensive than delivering video.

Are you sure? It is a logistics issue, not a technology issue. Streaming video, near instantly, around the world, without any perceivable user-experience issues, infinite times, for infinite users is a massive-massive technology issue.

Amazon same day deliver was problably the most revolutionary thing that came to the domain, but otherwise shipping 1000 cars across the world, while impressive, is a pretty straight forward task. The technology that you need are ships and trucks. You can use a 1950s era technology to do that.

It's not shipping infinite times, the number of views (and hence, cost to stream) are proportional to the fees withheld. Whether 45% is too much, I can't say, don't think it can be determined apriori. It kinda does make sense to me that it would be more than the app store fees, but I also feel those app store fees are too high as well.

> Only other monopolies, like Governments, can get away with charging 45% taxes.

And then charge even higher rate if you give them more money. Ask them how they spend it? Proudly poorly. /rant

If you think you can do better, you are welcome to set up your own server and stream your own video.

Do you think bandwidth and storage are free?

Bandwith isn't free for sure but at googles scale the costs are close to the cost you have copying data to your own NAS in your LAN. Multiple orders of magnitued below what AWS charges for bandwidth.

$0.0015 per gigabyte. Average video is about 300MB, so $0.0005 per view. How much do you think you can make from ads?

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