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YouTube $300m on bandwidth – no profit

September 10, 2009

YouTube will spend approximately $300 million on bandwidth in 2009 — meaning it won’t be profitable, according to an analysis by Credit Suisse.

According to the report' authors that means YouTube still would not be profitable at the gross level this year, given their original 2009 revenue estimate of $240 million (a top-line increase of about 20% year over year). YouTube is far and away the Internet’s biggest video outlet. In July, YouTube and other Google video sites registered a record 8.9 billion video views, accounting for 42% of all videos viewed online, according to research firm comScore.

Credit Suisse does, though, see a profitable future for You Tube: “Our work suggests that unit economics for video streams that are being monetized by YouTube carry attractive 35%+ margins, implying that YouTube’s profitability should improve if the percent of videos monetized increases.”


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