Is it a profitable YouTube?

It is the big question that many rise to themselves to foresee the profitability of the business of the video in Internet.
Peter Kafka offers some information of an analyst of Citigroup, Mark Mahaney, forced by the traditional opaqueness of Google on his accounts, in spite of quoting in bag.
The information is very partial, there does not exist a calculation of the costs of the biggest web of video of the world, in the income it does only one estimation to itself on CPM of MySpace and the CPC of Google is not included, so it is necessary to take them with the due precautions, but if we take them for good they serve to outline some ideas.
YouTube has the business volume of a chain of European commercial television. With a few income for 727 million dollars in 2009 (535 million euros) there would be below the income of a commercial television like Antenna 3, which invoiced 592 millions of the whole of 686 millions of the group. It would be still located further of Telecinco, leader in profitability in Spain, with a few income of 656 millions.
MySpace would be enough for below, with a few advertizing income of 405 millions, although the costs are considered quite lower than those of YouTube.
The profitability of the videos keeps on being very low, although it grows strongly. It is the big problem for the television in Internet, just as for the rest of means. With a CPM for 1,08 dollars (I insist that it is a questionable estimation) the viability of the video in Internet is not very promising. Several analyses with which I coincide enough for the experience with several projects, place in a CPM for 10 dollars (about 7 euros) necessary CPM to support a video business with professional content, the only one that till now has demonstrated to attract to the publicity.
Nevertheless, the growth year by year is strong in case of YouTube (41 %) and also if we analyze the information of the webs of the Spanish televisions.
Telecinco achieved in 2009 an increase of his invoicing for Internet and his thematic channels of TDT of 26 % to reach 14 millions. A volume of only 2 % with regard to the entire income of the chain, but that managed to grow opposite to the fall of 33,8 % of the income of publicity of the television.
With so low income volume, it is no wonder that the fight in the United States is to unify all the chains across the emission for cable or wide band and to increase the business of television of payment.
YouTube loses in profitability opposite to the televisions. If the margin of advertizing invoicing for YouTube is of an average of 50 %, like Indian the analysis of Citigroup, the profitability might be below the chains of television. The reason is the biggest price of the rights of the contents and the enormous cost of connectivity, much more expensive than the emission of conventional television.
Even if some calculations are accepted on the reduction of costs of connectivity of Google, the invoice of his servants and of interconnection is major than that of the conventional television, hard subsidized in his infrastructures also with public money, as it is possible to verify with the financing of the implantation of the TDT.
The margin of development of the commercial chains is between 11,5 % of Antenna 3 and 19 % of Telecinco, although before the crisis it was of the double.
But a conventional television has approximately 15 % of costs of personnel and 30 % of consumption of rights, in addition to other 55 % of operative costs. In YouTube the cost structure is completely different, with major incidence of the rights of contents and the distribution expenses opposite to a few much minor labor costs.
The new platforms get dearer the price of the rights. In his fight to obtain quality contents. The payment of 50 % of the advertizing income to the professional producers gets dearer enough the costs of the rights for the future business.
The same happens in the negotiation of the new platforms like iPad and the pressure on Amazon and Google to get dearer the price of the rights of the books up to 70 % of his invoicing.
In spite of dominating 40 % of the market of videos in Internet in the United States, much over other platforms like Hulu, Microsoft or Fox (where MySpace integrates), the business has not just detached for a company that has kept on exploiting diverse ways of increasing his business and his profitability.
The comparison of the real numbers makes to understand also why the television keeps on being the queen of the business of the contents much over the digital means and dismantles some of the preconceived and slightly informed ideas that circulate in Internet on the real costs of the business of the contents.
Does YouTube cost what Google paid?
The profitability of the company is very far of what many analysts were predicting when the operation was realized.
The Cititgroup calculations indicate an invoicing of little more than four dollars for user if we take into consideration only the North American Net users (less than the half with the world users). They would need eight years of good results to compensate 32 dollars for user that were paid then, already very far of more than 40 euros for viewer that generate the Spanish televisions.
The business of the video in Internet looks like still a background and YouTube already feels the pressure of the social networks, which offer an interesting window for not professional contents and also a value screen for many means, producers and distributors of contents who try to make use of the opportunities of the management of users and of marketing of the social networks.