When we think of video streaming for new music or funny clips of cats, we all look to YouTube as the first port of call. In fact, you’d be hard pressed to find anyone in the developed world who hasn’t heard of the site – even if they prefix it with ‘the’. Therefore, now with one billion users worldwide, you’d think they would be turning over a huge profit, like Facebook for example, but this couldn’t be further from the truth. The company is struggling to break even and has been since its inception.
In an attempt to widen their market a couple of years ago, YouTube tried to create a more immersive experience, creating original content to challenge Netflix and television networks, but it never took off in the way they’d hoped. The real crux of their problem is that an ever-increasing number of sites are opting for their own embeddable video content players. With investment from parent company Google on the decline, YouTube are struggling to convert numbers into money. Revenue has risen by $1bn over the past year to a cool $4bn turnover, but the company’s spending is sky-rocketing on projects like Music Key that allows subscribers offline playback and no ads – their attempted fightback at Spotify.
The main bulk of YouTube users is directed to the site via links or embedded video content hosted on other sites such as Facebook. Converting this to a solid base of loyal viewers is where the company is struggling. On top of this, revenue is constantly ploughed back to bolster the buffering speeds on its content, making profit a slightly illusive goal at the moment. The truth remains that this computer generation will continue to turn to YouTube as long as unskippable adverts don’t become more prevalent. In the same way that Google are still the preferred search engine, YouTube will be the video streamer of choice for years to come. The future may not be bright just yet, but that can surely be brought around for a company this large and well reputed.
