MediaFile

Sun Valley: When will YouTube make a profit?

That question has got louder and louder from investors and Wall Street analysts concerned that YouTube owner Google is racking huge profit-hindering costs to be the free online video platform for the world. It seems Google’s top guys don’t know the answer either — or if they do, they’re choosing not to share it with reporters on Thursday.

Google CEO Eric Schmidt told a media briefing at Sun Valley that he believes YouTube, which his company spent $1.65 billion to acquire three years ago, will come good thanks to its recent launch of new advertising formats such as pay-to-promote and pre-roll ads. “We’re optimisic that YouTube will be a strong revenue business for us because of these products,” he told reporters.

But the problem is investors are more concerned with the huge costs involved in streaming millions of videos globally everyday with a very small percentage of them covered by advertising. In other words when will YouTube make money from its dominance?

“We don’t make predictions,” said Schmidt. But then co-founder Larry Page piped in “It’s not that important.” Really? “I’m not worried it will be profitable, we want it to be very profitable,” Page said.

For Schmidt, an important part of YouTube’s future will involve more premium content from small three-man production teams to Hollywood studios. He acknowledged he’d like for YouTube to have some of the content of Hulu.com, which now features Disney-owned shows as well as NBC and News Corp programming. All three companies own Hulu. “We think we need premium content,” he said.

CORRECTED-Sun Valley: YouTube’s most valuable customer

Corrects blog post to show Buffett was talking about YouTube, not Facebook.

Attention YouTube: Warren Buffett wants to give you money.

That’s the word from Liberty Media Chairman John Malone, who sat on a panel about digital media at the Allen & Co confab in Sun Valley on Tuesday.

Malone told reporters on the sidelines of the event that billionaire investor Buffet, aka the Oracle of Omaha, had told him privately that he would be willing to pay $5 a month to use YouTube, the popular video site owned by Google.

YouTube, of course, is a free Web service which makes its money through advertising. But other popular social media like Twitter have yet to generate revenue, and monetizing social networks is a big topic of discussion among the media and tech executives gathered for the conference.

How-to journalism with YouTube

YouTube has launched a new video channel called the Reporters’ Center to teach aspiring citizen journalists everything they need to know, with contributions from Bob Woodward, Katie Couric and a slew of other organizations including Reuters.

The advice ranges from the prosaic (“How to distribute your YouTube video on Facebook,” “How to not sound like an idiot“) to the profound.

“The first rule of reporting is to make sure you get back alive,” the New York Times’ Nicholas Kristof tells viewers in “Covering a Global Crisis.” “There’s no point in getting a great interview with a warlord if afterward he kills you and takes your recorder.”

Google’s YouTube money hole not as deep as feared

How much money is Google losing from YouTube?

Not as much as you think, according to a new report by an IT research and consulting firm.

The cost of streaming billions of videos a month, and Google’s difficulties monetizing those videos, has put YouTube on track to lose almost a half billion dollars this year, according to a famous report by Credit Suisse released in April.

But that report failed to take into account key aspects of the Internet infrastructure business that significantly lower YouTube’s costs, says RampRate, a San Francisco firm that consults companies on IT outsourcing practices.

Facebook crushes MySpace in minutes, but lags on video

Facebook won the bragging rights to being the world’s largest social network site last year, based on the worldwide number of unique visitors to its site.

But what about some of the other metrics that advertisers care about?

According to the latest figures from Nielsen, Facebook and rival MySpace each have key strengths to woo advertisers with.

When it comes to “engagement,” that is how much time people are actually spending on a site, Facebook is making big gains. In April, the total number of minutes spent on the site in the US surged a whopping 700 percent from April 2008, to 13.8 billion minutes.

As GM files for bankruptcy, Madison Ave gets to work

“This is not about going out of business. This is about getting down to business.”
So says the latest advertisement from General Motors, which hit the automaker’s web site and YouTube just hours after it filed for bankruptcy protection.

The theme is reinvention (“General Motors needs to start over to get stronger”) and it is the first glimpse of what the folks over at the Interpublic Group agencies that work on GM have planned post-bankruptcy.

Keep an eye on:

    Microsoft offered a look into a future where the Xbox 360 console is the centerpiece of any living room (Reuters)
    DirecTV Chief Executive Chase Carey may be headed back to News Corp (Reuters)
    Lions Gate Entertainment posted a wider-than-expected fourth-quarter loss (Reuters)

YouTube can be dangerous place for porn seekers

YouTube is becoming a dangerous place to search for porn.******Anti-virus company PandaLabs reports on its research blog that hackers have riddled the site with links to malicious software. The scheme works like this: Porn seekers searching the YouTube site for terms including Latina, kinky, girl, porn, sex and the names of popular porn stars are directed to another site, called PornTube 2.0. It looks like a legitimate video web site, according to PandaLabs, but is actually riddled with malicious software that can steal credit card data, passwords, install spyware and also attempts to sell users of infected PCs fake anti-virus programs.******Just so you know…

Hulu breaks into top 3 US video sites

Hulu continues its rapid ascent up the video charts, cracking the top three online video sites in the U.S. for the first time in March.

Some 380 million videos were viewed on Hulu.com, up 14.3 percent from February, according to market research firm comScore.

That allowed the NBC Universal and News Corp joint venture to steal the No.3 spot from Yahoo, whose total number of videos viewed in March actually declined by roughly 5 percent from February. Hulu held a 2.6 percent share of the 14.5 billion videos viewed in the U.S. last month.

Oprah Tweets: Blessing or Curse for Twitter?

Oprah Winfrey is expected to join the twitterati on Friday, as she posts her first message on Twitter.

According to her show’s web site: “Oprah’s getting ready to send her very first tweet! And, why Ashton Kutcher’s been crowned the King of Twitter.”

While the media mogul is certain to accumulate hundreds of thousands of followers in record time (she already has 66,000), we wonder: What does it mean for Twitter, the wildly popular mini-blogging service, which is essential to some, supremely confusing to others and whose business model (or lack of it) gives journalists fits.

Now showing: The cable show

The big story in the media for the rest of the week is the annual National Cable Telecommunications Association Show, or “the cable show,” as its commonly called.

This year’s primary topic looks like it will be how the big, traditional operators in the business will adapt to an age when the Internet is giving people more options to watch shows, and not always in a way that feeds the bank.

Here is our own take on the show from the Reuters wire:

Both sets of companies will be brainstorming on how to cope with or benefit from disintermediation: consumers can now watch decent-quality video online whenever they want, and often for free.