The first answer that pops into most people’s minds when they’re asked how much money is YouTube costing Google is ‘loads’. With billions of videos streamed from the website each month, YouTube must be costing, the admittedly very rich, Google a pretty penny in bandwidth and resources.
However, it seems that we may be wrong with our first impressions for according to a new report YouTube isn’t costing Google quite as much as we might believe.
While a report released in April by Credit Suisse claimed that YouTube could be costing half a billion dollars per year due to the bandwidth used by the videos and the failure by Google to effectively monetise the website, another report contradicts the findings.
A second report by RampRate, from San Francisco, say that Google has managed to reduce overheads at Google with superior infrastructure, which has led to losses from the video sharing website to be significantly lower than first believed.
Furthermore, because of the sheer volume of bandwidth required by YouTube, and of course the buying power of Google, its costs for bandwidth would be greatly reduced because of the bulk ordered. Also, nearly 75% of the bandwidth required by YouTube comes with no cost because the peering arrangements that Google has created.
RampRate believes Google has lost just $174 million this year, compared with the $470 million that Credit Suisse claimed.