How does YouTube make money?

I have often wondered how does You Tube make money? They must be spending a fortune everyday with the amount of bandwidth they service. I am sure they are not really a charitable organization and hence are very profitable considering its massive appeal all over the world.

2 ways You Tube makes money

When using You Tube, a user often replicates You Tube search exactly like Google Search. With keywords picked up by the search engine the relevant links to the videos are accessible.

  1. You Tube has become a very vibrant medium for amateur videos to be accessed by a global audience. This actually allows people to put up their videos online and bid for keywords. This allows anyone with a You Tube account to be able to promote his/her video.
  2. What works for amateurs also works for professionals. One of the most popular way Google search makes money is to display advertisements as links to websites on the side with search results. The same goes for You Tube. (Check out the pic below. The Red Arrow points to the advertisements.)


Future plans by You Tube to make money.

There are many plans afoot to make money out of You Tube. One of them is to try and show rental movies online by brokering deals with major Hollywood studios.

Another move which might not create a lot of buzz but might create billions in revenues is for You Tube to start charging their users money to show statistics of how many people have viewed their Videos. This will be critical for a subscriber to know how popular the video is before bidding for advertising.

The statistics could be available for 10$ per year to a user but would remain free for a video with less than 100,000 views. 😉

Links: YouTube

One Comment

Rahul September 23, 2009

You tube can make big money.