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 Send to email | The Cost Of Online Video: $8 Billion And Counting in General |  By Silicon
el 11-Jul-2008 |
weezer-video.jpg: Paste this image in your site, Myspace, Facebook, Ebay copy this code...
 Just look what Steve Chen and Chad Hurley have wrought: In the three years since they founded YouTube, investors have poured more than $8 billion into the online video business.
What did they get for their troubles? So far, next to nothing. YouTube, which accounts for more than half of all video views, will generate a mere $200 million in sales in 2008, and the industry has yet to produce a profitable company.
Our numbers come primarily from Dow Jones VentureSource, which provided us with a running tally of venture investment in online video startups since 2005. The dealflow includes bets on infrastructure (Brightcove), ad platforms (YuMe), service providers (VideoEgg), and consumer sites (FunnyOrDie, Veoh, Joost, etc). Between 2005 and Q1 2008, that tally is $6.06 billion.
Add in one big acquisition -- the $1.65 billion deal for YouTube ($1.65 billion) -- and a few smaller ones -- like Sony's pickup of Grouper/Crackle for $65 million -- and the grand total comes to $8.06 billion. Keep in mind this doesn't include any of the billions invested in Europe or in China
Yet, while most VCs are unlikely to see any return on their investment, we don't think $8 billion is an outrageous number. Consider:
- Online video is in its infancy. YouTube didn't exist four years ago.
- 119 million people watched an online video in May.
- $1.35 billion will be spent on online video advertising in 2008 (though much will go to video sites that weren't venture funded, like ABC.com)
- Advertisers poured $17 billion into broadcast and cable TV in the 2008 upfront
It also pales in comparison to other speculative investments of the past few years; Merrill Lynch wrote off $9 billion in bad mortgages in the first quarter of 2008 alone (and $29 billion since the meltdown began.)
Here's how the money has flowed into video over past few years according to Dow Jones:
2005: $1.764 billion
2006: $2.117 billion
2007: $2.009 billion
2008: $453 million (Q1 only)
See Also: Google: We Can't Figure Out How To Make Money On Web Video, Either
Hulu: A Consumer Success But Still A Small Business
Nielsen: People Watching Less YouTube, Less Video, But More Hulu
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 | Kotaku`s The Gamers Guide |  Blogger | XBOX 360 Gamers Weblog
Gossip, news and leaks for obsessive gamers Kotaku As if you don't waste enough of your time in a gamer's haze, here's Kotaku: a gamer's guide that goes beyond the press release. Gossip, cheats, criticism, design, nostalgia, pred |
| Sony Lost Over $3 Billion To PS3 Cost, Pricing Imbalance [Playstation 3] | | Pricing the PlayStation 3 below its production cost caused Sony to lose $2.16 billion in 2007 and $1.16 billion in 2008, the company revealed today. Sony's fiscal 2008 annual report delineated potential risk factors to its investors, outlining that "the large-scale investment required during the dev [..] Read complete article | | Published 23-Jun-2008 by Leigh Alexander in Playstation 3 Financial News Original PS3 Sony Top
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| Joystiq | Blogger | Covers video game news from an independent, unbiased perspective
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| Counting Rupees: Does controversy sell? |  Filed under: Culture, BusinessEach week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:
Another day, another video game banning c [..] Read complete article | | Published 12-Sep-2008 by Geoffrey Brooks in ControversyCounting-RupeesGTAManhuntMortal-KombatNight-Trap
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| Kotaku`s The Gamers Guide | Blogger | XBOX 360 Gamers Weblog
Gossip, news and leaks for obsessive gamers Kotaku As if you don't waste enough of your time in a gamer's haze, here's Kotaku: a gamer's guide that goes beyond the press release. Gossip, cheats, criticism, design, nostalgia, pred |
| Mobile Search Revenues Projected To Triple. But How? | | Mobile search revenues are projected to more than triple worldwide in the next six years, from $1.5 billion in 2008 to $4.8 billion in 2013, according to research firm Juniper Research. That's good news for search companies like Google (GOOG) and Yahoo (YHOO), which are counting on the mobile Web as a key source of growth.
But for that to happen, more people need to start using mobile se [..] Read complete article | | Published 21-Mar-2008 by Silicon in GOOGAAPLYHOO
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Merrill Lynch's mortgage gambling tab keeps growing (MER). $8 billion in Q3, $12 billion in Q4, and now another $9 billion in Q1. That's $29 billion all told (so far), or approximately [..] 
