YouTube Estimated to Lose $470 Million in 2009

April 5, 2009

(ChattahBox)— Google’s YouTube, the leader in Internet video streams, is poised to earn $240 million in revenue in 2009, a healthy 20 percent increase from last year. You would think that would be cause for celebration for this popular company, which also enjoys a 41 percent share of total domestic video streams, but you would be wrong. According to a Credit Suisse report, YouTube’s projected expenses for 2009 total $711 million, leaving the company $470 Million in the red.

Credit Suisse analysts studied YouTube’s ad revenue strategies and concluded the company needed to incorporate more paid content to stay financially viable. YouTube relies heavily on user-generated content, which makes the video site fun and was responsible for the site’s original popularity.

However, analysts say YouTube needs additional strategies to generate more monetized professionally produced content to stop the bleeding. The cost of maintaining the necessary bandwidth for all the videos takes up a whopping 51 percent of the company’s total expenses. Content licensing is another big expense item accounting for 36 percent.

YouTube can read its balance sheet just as well as Credit Suisse analysts apparently. The company recently announced a new deal with Disney-ABC Television Group and ESPN, to provide revenue producing content clips for dedicated YouTube channels.

This new deal with the two media giants should infuse YouTube’s coffers with much needed revenue, so the truly ingenious with way too much time on their hands can continue entertaining us with, such YouTube hits as the Diet Coke Mentos Rocket.

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3 Responses to “YouTube Estimated to Lose $470 Million in 2009”

  1. My Discount Diet » YouTube Estimated to Lose $470 Million in 2009 - Chattahbox.com on April 5th, 2009 10:59 am

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    […] YouTube Estimated to Lose $470 Million in 2009 – Chattahbox.com(ChattahBox)— Google’s YouTube, the leader in Internet video streams, is poised to earn $240 million in revenue in 2009, a healthy 20 percent increase from last year. You would think that would be cause for celebration for this popular company […]

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    […] YouTube Estimated to Lose $470 Million in 2009 – Chattahbox.com(ChattahBox)— Google’s YouTube, the leader in Internet video streams, is poised to earn $240 million in revenue in 2009, a healthy 20 percent increase from last year. You would think that would be cause for celebration for this popular company […]

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