this post was submitted on 28 Apr 2024
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I'm a software engineer at AWS and work on video content delivery for services like Netflix. The idea that one single ad could cover the cost of delivering a video that's been replicated in multiple servers, multiple regions, multiple countries throughout the world is pretty hilarious. No matter how much money you think YouTube is making I can almost guarantee it's not enough. There is a reason there is no significant competition in this space, it makes no money.
Genuine question.
How is been running for almost 20 years, most of them with very few ads?
I doubt they had been just sinking money for the kind of their hearts.
I do not know how much it cost to run a service like YouTube. Or how much money they make by ads or other ways. But they have been running for long enough to be a successful business.
And it's just the latest few years when they are pushing these aggressive techniques.
Investor money, then Google money. Video streaming requires fuckloads of storage and is a HUGE bandwidth hog, especially if people want to watch stuff at 1080p or higher resolutions. Youtube is a money pit, but it's a major and nearly untouchable internet power, especially given its size and reach.
The "easy money" from loans with very low interest rates has dried up, also Google being Google.
There's also the cost to transcode the video and audio streams into different formats so they don't have to do it on demand whenever someone watches a video. That's a lot of compute cost plus they have to store all of those additional transcodes which is more storage cost.
I know that for many years in the 2000s and early 2010s- what many consider to be the golden age of Youtube- they were losing money. That's what I think a lot or people don't get when they claim "enshittification"- the services they are complaining about are unsustainable in their current form. That's what it takes to establish a digital product- grow your base first while bleeding money, then figure out a way to monetize it later. As capital tightens up, the clock is running out for brands like Netflix, Discord, Youtube etc to start making money. That's the part that sucks as a consumer but idk what else YouTube can do if it wants to be profitable. They offer a premium version for people that don't want to watch ads.
I feel like I would need to see their accounting books to fully believe that narrative.
The lack of accounting transparency makes all a tale of "trust me I need this money to make this work".