How Does YouTube Make Money? It Doesn’t. 6 Ways YouTube Might Be Spending Its Billions

 

(photo credit: thechive.com)

(photo credit: thechive.com)

YouTube took in $4 billion last year — not bad considering Google paid only $1.65 billion for the video platform, right? Apparently not. Word on the street is that YouTube is barely breaking even. Business Insider apparently speculated that it was because too many other sites are embedding the videos and not discovering native content on the site (which is sort of a problem for all online media). Of course YouTube says that this isn’t the case and that “the vast majority of its traffic does come directly from YouTube.com or its mobile apps, with ~50% from mobile.” So what does YouTube spend its money on? The reality of paying for servers to host the 300 hours of footage uploaded every minute isn’t sexy. We decided to do a bit of hard investigative “journalism” and come up with our own reasons why YouTube isn’t profitable. Here are six of them:

6. Building Lavish Sets For YouTube Space L.A.

(photo credit: punchingkitty.com)

(photo credit: punchingkitty.com)

There has been a Godzilla set, an Academy Awards set, and now there’s a plane set. And there’s probably been a bunch of other sets I haven’t even known about. It seems YouTube might be addicted to sets. It’s a dirty addiction — one that threatens to send them spiraling out of control and into “set hoarding.” If left unchecked, there could be sets piled up on top of each other, and a bunch of feral animals roaming through the debris. I’d watch the YouTube edition of Hoarders though.

5. Gimmicks

(photo credit: thevine.com.au)

(photo credit: thevine.com.au)

What’s that? Multiple angle options on videos? 4K resolution? A streaming music service? Lately all we’ve seen from YouTube are tricks to “enhance” the user experience. But what good is spending all that money on development if you are going broke doing it? You work hard, YouTube. Go buy yourself a fun new outfit or something? Maybe a spa day WITH the optional mud facial?

4. Uploading Artsy Films To Keep Vimeo Down

(photo credit: wsu.edu)

(photo credit: wsu.edu)

It’s no secret that Vimeo is too artsy to be mainstream. But how did it get that way? Maybe YouTube, in its bid to stay top dog, has been spending billions on creating weirdo short films and avant garde drum circle footage on Vimeo in hopes of keeping them out of the mix?

3. Firepole Insurance

(photo credit: adweek.com)

(photo credit: adweek.com)

The coolest feature of YouTube Space L.A. (aside from all the state-of-the-art sound stages and editing bays) is the firepole. Yup, right next to the front door is a big brass pole that absolutely nobody uses. And why not? It’s too damn dangerous. YouTube probably spends so much money on Firepole Insurance (possibly), that it has become a sort of art piece more than a functional and fun office tool.

2. Market Research To Find “Funnier Cats”

(photo credit: 4us2be.com)

(photo credit: 4us2be.com)

Grumpy Cat was a boon to the industry, but there hasn’t been anything new in feline hilarity since. And with Chairman Meow passing and Princess Dump Truck not living up to her potential, YouTube is desperate for more hilarious cats. So much so, that they might be willing to spend billions on it?

1. Paying For Google’s Employee Perks

(photo credit: independent.co.uk)

(photo credit: independent.co.uk)

Google expects the very best of its employees and so it treats them the best. Long maternity/paternity leaves, slides in the office, free snacks, self-driving cars? It all comes with a price. And it might just be responsible YouTube that is being forced to foot the bill for its drunken “Good Times” stepdad. If YouTube shows up with a black eye one day, you’ll know what happened: the money ran out.

 

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