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AFAK, Traditionally it was:

Producer pays for content and profit is derived from distributers that charge for access to the content. If people don't view money is lost.

YouTube is different:

Creators pay to create their own content and are imbursed as they gain views.

YouTube, the distributer in this case, has no skin in the game. They have no overhead, it's all profit.

Perhaps that has something to do with it. It feels somehow like you're paying the middle man for nothing?



I mean, is it worse than a traditional Hollywood type model for low level creators? Aren't traditional media firms famous for shenanigans like making entry level work so underpaid that you basically need wealthy parents to get your foot in the door? Or crunching visual effects artists because their whole craft was born post-unionization? The elites ultimately win everywhere, (in this case it is Google instead of say, Disney) but at least with YouTube it is ostensibly meritocratic to climb the career ladder from the bottom?

But I definitely can see the dystopia in an algorithmic platform seeking content hegemony at highest possible profit as opposed to how traditional firms work which is... not too different to me. But I can see a higher ceiling to the gray goo problem in the notoriously willing-to-be-bad-at-customer-service Google.


Idk necessarily if the issue is 'who are you paying' as much as it is 'what are the people I'm paying actually contributing.'

And in the case of YouTube the answer seem to be: we created and refined some amazing video compression and streaming techniques. Now that that's done we just want to profit indefinitely?


>"They have no overhead, it's all profit."

I have just about zero warm and fuzzy feelings towards big corporations. But to claim that Youtube's giant infrastructure its development and maintenance has no cost (zero overhead) is totally wrong.


Yes, 'no overhead' was incorrect. I meant 'significantly less overhead.'


>"'significantly less overhead.'"

Well, this requires numbers. Like percentage. Do you have any or it is just an assumption?


My opening phrase ("As far as I know") was intended to imply that I am not an industry insider. These are indeed assumptions.

Are they unreasonable assumptions in your eyes? May I ask why? They seem reasonable to me.


I think they are unreasonable and the expenses in absolute numbers are huge. What it is percentage wise I've got no clue. So we are both clueless ;)


first link below estimates that YouTube's total storage needs for all of its content are roughly 10 exabytes. It goes into a lot of detail that you can check for yourselves, because it's a bit too much to copy over here, and though I can't say it's correct for sure, the description of how they reach their calculation is quite robust.

Anyhow, if we assume storage costs for YouTube are the same as what AWS charges per month (roughly 2 cents), this would mean that it costs YT about $2.4 billion per year just to store those 10 exabytes. I'm assuming that Google can cost its storage at quite a bit cheaper than 2 cents per GB at the immense scale it operates on, so let's halve that. This still means simple storage costs of $1.2 billion per year.

These of course don't include hardware replacement, other capital costs, or the bandwidth costs of all that video being uploaded (and downloaded).

Youtube's revenues for 2019 (so a bit out of date) were nearly 16 billion (2), so while they certainly have lots of costs beyond what I described above, they're also wonderfully profitable it seems.

1 https://www.productmanagementexercises.com/9018/estimate-tot...

2 https://abc.xyz/investor/static/pdf/2019Q4_alphabet_earnings...


How is not paying for content a huge expense?


>It feels somehow like you're paying the middle man for nothing?

They also promote your content and find and auction off ads for you. Unless if you're an advertiser, you aren't paying YouTube anything. If you have a problem with it, you're free to host your content on another platform. Keep in mind that that YouTube has to serve the hundreds of millions of videos that get a handful of views, and if you're a monetized YouTuber, it's only fair to be taxed to pay for hosting these videos as everyone starts in that position.


they offer unlimited space to store video! this actually good, but YouTube didn't display friendly to creators.




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