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A new report by Credit Suisse projects that video-sharing giant YouTube is on track to lose $470 million this year, writes Multichannel News. Credit Suisse says YouTube will generate $240 million in revenue, but those revenues will be dwarfed by the $711 million in licensing, hardware, […]

A new report by Credit Suisse projects that video-sharing giant YouTube is on track to lose $470 million this year, writes Multichannel News.

Credit Suisse says YouTube will generate $240 million in revenue, but those revenues will be dwarfed by the $711 million in licensing, hardware, marketing and other expenses the site will incur. About half of that expense will go towards bandwidth, which Credit Suisse pegs at $360 million through the following math:

To arrive at the estimated $360 million bandwidth tab for YouTube, the analysts assumed the site will receive 375 million unique visitors in 2009 and that a maximum of 20% of those users are on the site at any given time. Credit Suisse’s analysis then assumed each user downloads a video at 400 kilobits per second, to yield a peak bit run-rate for YouTube of 30 million megabits per second.

Analysts at Credit Suisse came to the rather obvious conclusion that in order to generate more revenue, YouTube must increase the amount of monetizable, premium content (i.e. be more like Hulu). As if on cue, YouTube recently signed a clip distribution deal with Disney and is reportedly in the midst of a drastic redesign of its site that emphasizes premium content over UGC; it’s due to be unveiled April 16.

Credit Suisse’s estimates come on the heels of a report earlier this week from Screen Digest that said YouTube would earn $120 million this year and one from Jefferies & Co. in March that said YouTube would earn $500 million. In its 2008 annual report, Google said it had “yet to realize significant revenue benefits from our acquisitions of dMarc Broadcasting (Audio Ads) and YouTube.”

  1. [...] reports that analysts estimate youtube to lose $470M this [...]

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  2. This seems to explain the PRS and the Germany deal break down, there seems to be a great loss of cash-flow across the whole online video sector, what with Veoh, blip.tv, babelgum and the rest, re-callibrating their efforts.

    Although youtube can weather the storm, I would not be surprised if there are some major right downs on the horizon, I mean how much can a VC take before realising, all that giltters is not gold.

    I guess the VC’s are holding out to see if the G20 cash boost plays out in the ad market. Lets see if the trend is their friend.

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  3. [...] projects that Google’s video giant, YouTube is on track to lose $470 million this year says NewTeeVee. Credit Suisse says YouTube will generate $240 million in revenue, but that’s nothing in [...]

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  4. [...] Staff | Friday, April 3, 2009 | 1:50 PM PT | 0 comments YouTube could lose as much as $470 million this year, forecasts one analyst (NewTeeVee) VeriSign launches an app to keep your iPhone secure (TheAppleBlog) Eye-Fi lets you [...]

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  5. Mark W - CA Friday, April 3, 2009

    Load of rubbish, they can’t do math properly, nor are they qualified to analyze the marketplace. This is grossly disproportionate and it’s no wonder Wall Street is having such issues.

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  6. [...] NewTeeVee, a blog dedicated to online digital media, reported that Google is poised to unveil a site redesign that will do just [...]

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  7. [...] way as well — it’s not clear where the monetization would come from. Google famously doesn’t make much advertising revenue from YouTube. And Twitter is even worse as an advertising platform; sticking ads into the tweetstream would [...]

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  8. youtube dumb website….they show up ads in every corner of webpage..and also on videos also generating millions..check out the adsense…by google
    http://www.revittut.blogspot.com

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  9. youtube dumb website….they show up ads in every corner of webpage..and also on videos also generating millions..check out the adsense…by google
    revittut.blogspot.com

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  10. Not to mention what they’ll lose in lawsuits.

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