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You have reached 2signals, written by Derek Hatchard and Jordan Lutes. We are software developers and business owners / entrepreneurs talking about what is happening in the software industry and on the Internet.

We are interested in the trends and happenings at the intersections of business and technology. Sometimes we agree, sometimes we disagree. This is the forum for our discussions.

Feel free to comment on anything we say whether you agree or disagree with one (or both!) of us. Keep the comments clean and family-friendly. We reserve the right to remove comments deemed to be inappropriate or mean-spirited.

Jordan is a software consultant and entrepreneur. Derek is the senior solution architect at ArdentDev.com, a mentoring and consulting company. Derek is also a Microsoft Regional Director.


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YouTube will survive but won't thrive as a money-maker

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This blog has moved to www.derekhat.com.

Tuesday, July 18, 2006

I thought I had posted my prediction about YouTube before but I don't see it anywhere so here we go again. According to TechCrunch, YouTube recently hit a milestone: 100 million videos served per day. They claim that a staggering 60% of online videos are watched through YouTube. That is freakin' incredible.

There is much talk about whether YouTube will survive because it does not have a clear business model. Advertisers are hesitant because of copyright violations in so many videos. The biggest users of YouTube are pretty good at ignoring ads and they don't have credit cards. All considered that's a crummy pot of beans to be stewing in.

There are only so many ways to make money on a site like YouTube - ads, sponsorships, subscriptions, and selling physical media with content (did I miss any?). YouTube will try all of these and make some significant money (they've already started). But the push to increase revenue will cause growth to plateau and blemish its user euphoria. The cool kids will be off playing elsewhere and YouTube will lose its shine. It will waft in a terrible state of semi-relevance before being acquired. Within its new parent company, YouTube as we know it will die either from neglect or being rolled into some larger service or portal.

<grain of salt> I wasn't smart or insightful enough to create something like YouTube so I could always be wrong... We'll see.

Posted by derek hatchard 7/18/2006 8:25:18 PM (GMT Standard Time, UTC+00:00)
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