A newly issued report from Credit Suisse claims that YouTube could be on pace to lose $470 million in 2009, writes Multichannel News.
They state that YouTube will rake in $240 million in revenue. That revenue, however, could be dwarfed by the $711 million in licensing, marketing and various other expenses the site will face this year.
Roughly fifty percent of those expenses will go towards bandwidth, which Credit Suisse guesstimates at $360 million through the following math:
To arrive at the estimated $360 million bandwidth tab for YouTube, the analysts assumed the site will receive 375 million unique visitors in 2009 and that a maximum of 20% of those users are on the site at any given time. Credit Suisse’s analysis then assumed each user downloads a video at 400 kilobits per second, to yield a peak bit run-rate for YouTube of 30 million megabits per second.
The analyst goes on to explain:
“In our view, the issue for YouTube going forward is to increase the percentage of its videos that can be monetized (likely through more deals with content companies) and to drive more advertiser demand through standardization of ad formats and improved ad effectiveness.”
Credit Suisse projected YouTube will serve 75 billion video streams in 2009, up 38 percent from 2008.
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