Contact: Brenon Daly, Jim Davis
More than four years after Google acquired YouTube, the video content site is either putting up black numbers, or is very close to it. That’s according to hints offered recently by the company, although Google has often appeared unconcerned about the profitability of the wildly popular site that the search giant picked up in its second-largest acquisition. (YouTube could have slipped to Google’s third-largest deal, but it appears that rumored talks with Groupon have come to nothing.)
Just how popular is YouTube? Google recently indicated that a day’s worth of video (a full 24 hours) is uploaded every single second to the site. And while profitability has not been an immediate concern for YouTube, Google has nonetheless demonstrated that it is committed to online video – and that it is willing to put even more money behind the effort. Just late last week, Google picked up Widevine Technologies.
As my colleague Jim Davis notes, Widevine gives Google technology used to underpin both online and broadcast premium TV services through the use of software-based DRM systems. This means the company – with its recently launched Google TV product, as well as Android-powered phones and laptops running Chrome – will be able to offer secure premium content on any of these platforms and enable subscription and video-on-demand services, as an example.
For instance, YouTube could now charge for access to live events that it has broadcast on occasion, including a U2 concert last year and the Indian Premier League cricket matches this year. Until recently, YouTube had used CDN services from Akamai for live broadcasts. But just in the past few months, YouTube has started testing its own live-streaming services platform (and has hired a number of former Akamai employees to boot). If Google continues to develop a secure and scalable content delivery platform, CDN vendors may well feel the pinch.