1 of 2

Write now Article Tools

Some people have strong opinions. Some have special talent. Others love to entertain, and yet others simply want to be entertained. Bring them all together, throw into the mix an upcoming video producing technology that has captured the attention of the masses and become increasingly affordable and user friendly, and you have a mosh-pit of cutting edge technology, and people who spend money. In other words, you have an advertising of medium with unmatched potential. You have YouTube, my friend.

YouTube is a website built for Internet users to share video clips. Along the same lines of music sharing websites such as Napster.com and Limewire.com, the site uses a peer-to-peer file sharing network geared specifically toward video technology. With affordable digital cameras now easily able to generate video clips, and the iPod video technology popularity, it is not surprising that YouTube quickly became so successful.

While the initial business model for YouTube was simply to bring the masses together and generate revenue through advertising, any time you open up a free for all on the internet, you open up a can of worms. This can of worms starts with, you guessed it, copyright infringement. YouTube prohibits the uploading of any copyrighted material, but it does not pro-actively enforce it. If a piece material is reported to be copyrighted, YouTube will remove it. That, however, is not good enough for Hollywood. In turn, YouTube is faced with the task of implementing proactive polices that will inhibit the use of copyrighted video clips. Inhibit does not mean prevent, however, as prevention would be virtually impossible. The latest attempt to do so has been the enforcement of a 10 minute time limit on video clips. If your video content is greater than 10 minutes, you must use a premium service.

In addition to the copyright worm, YouTube also faces some serious running costs. Dan Frommer of Forbes.com reports that YouTube is quickly approaching bandwidth charges up to $1 million a month. Even though the phrase "buying in bulk" is probably an understatement in reference to YouTube's bandwidth shopping, the cost at hand as compared to the advertising revenue generated cannot be ignored.

In spite of these obstacles, though, YouTube is still growing. The users love it, Hollywood has yet to take up their ax to it, and the advertisers are glad to pay to be there. The company supposedly was built for acquisition, and in that sense it has certainly been successful. Google agreed to acquire YouTube about a year and a half after it was founded for $1.65 billion. Yes, that is BILLION. In that sense, it certainly looks like a successful business model. Will Google be able to fend of Hollywood and keep enough revenue flowing to extend YouTube's successful for a long period of time? That question remains to be seen, but Google certainly has a better shot of any one out there to do so.

Learn more about this author, Lana Sain.
Click here to send this author comments or questions.

Add your voice

Know something about A look at YouTube's business model?
We want to hear your view. Write now!