Tuesday, July 18, 2006

Youtube & Robin Hood

The runaway success that is Youtube has announced that it is serving 100 million videos per day as all of the other portals struggle to compete in the video sharing market. The business model is yet to be proven, though. Will major brands want to advertise next to amateur and sometimes rather dubious and random content, or will they simply produce and upload their own viral ads for free?

I estimate that Youtube's bandwidth and hosting costs must now be around $2m per month - which goes to Limelight Networks. There are inevitable reports that they're now looking at a P2P model to enable them to scale further.

All Youtube is doing is using VC money to subsidise a public service. A nice study in redistribution of income.

However, that doesn't mean that Youtube won't be sold to one of the major ISPs for a huge consideration.

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