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Thinking About Why YouTube Is a Monopoly
- amadeuspagel 2y agoI don't understand this kind of thinking. Free video hosting is good. The EU doesn't exist to torture every single market until a viable european competitor emerges. It exists to protect the interests of european citizens (most of whom do not own video hosting platforms), which in this case are perfectly served by YouTube. And european public television exists to make video journalism available to everyone, which is also served by YouTube. And it's great that you can see content from public television and independent journalism on the same platform.
- PaulHoule 2y agoI'd say it is the two-sided market for advertising.
- jononor 2y agoI think this is a key aspect. Advertising is what brings in the money after all, to keep the service running. And arguably this market is 3-sided: advertisers, content creators and viewers. And as any multi-sided market there is a huge problem of bootstrapping. Advertisers will not be interested until there is sufficient viewers. Viewers not interested until there is enough content/creators. But creators not interested until there is enough viewers/advertisers. One would need a really smart plan and excellent execution getting into a place where such a model starts to be sustainable or feeding into itself. The economies of scale regarding video hosting might mean that a break even point requires millions of monthly users.
- nothercastle 2y agoBecause YouTube was created before copyright enforcement got strong. YouTube grew on pirated bootlegs until it got big enough it didn’t need them. You can’t replicate that again the ladder has been pulled after the launch and nobody else can do that.
- mjevans 2y agoI argue TikTok did / is doing the same path.
- wvh 2y agoIsn't TikTok more like the Instagram of video? I seem to remember early Youtube had a lot of digitised content, like private videos and TV show ripped fragments. With TikTok I see more of a Twitter/Instagram vlog and opinion platform. Youtube's success these days is, somewhat surprisingly, long-form content, often even exceeding an hour. I'm too old to see just how popular TikTok is and where they could take that with the (supposedly petty young) demographic they have.
- tdeck 2y agoI wonder why the likes of Vimeo and DailyMotion from a similar era never seemed to really make it.
- nothercastle 2y agoTheir software experience was terrible as well. Real player type stuff. You only went there when you had no other option.
- keiferski 2y agoVimeo decided awhile ago that they weren’t going to be a “shareable video” platform. That, combined with their pretty user-hostile UI, has limited their growth. My guess is that they looked at the costs of hosting trillions of hours of video and decided that only a corporate giant like Google would ultimately be able to afford it.
- joseda-hg 2y agoI remember going to daily motion spcifically to watch stuff that got DMCA'd out of youtube, the problem being I had no reason to stay there, the content was too sparse, even considering the amount of illegitimate content published
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- itiswhatitis1 2y agoSimple - youtube doesn't suck! Even in 2025 every other streaming site is unwatchable because of video buffering, videos not loading, and other hiccups in service that make it annoying as hell to use. 99% of websites in general suck, and the ones that don't get millions and billions of users. Arrogant programmers think their products are great and they are geniuses, but in general 99.9% of their work is glitchy unusable trash and going nowhere. Say what you want about youtube, it simply works better than anything else.
- Clubber 2y agoYes, this is all true, but the monopoly part is YouTube was supported by Google search profits for most of its existence, which its competitors don't have. The good part is YouTube is a really good service (ignoring their handling of gun related videos), the bad part is there are no viable competitors. If you like (legal) content they want to limit, block or otherwise hobble, you don't have any other great option.
- itiswhatitis1 2y agoIf their competitors were any good, then google would have given them the money.
- bko 2y agoSo YouTube is subsidized by Alphabets profits. Basically everyone in the world is better off apart from Alphabet shareholders and maybe a few giant corporations slightly smaller than Alphabet that want to compete if they were able to sell a worse product for more money.
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- bko 2y agoExactly. It's bizarre to me that there's this idea of "fairness" that we have to purposely degrade a great product just so others can create a bad (but now relatively less bad) product, to stick it to Alphabet. Wasn't anti-monopoly policy supposed to benefit the consumer and not the corporations that are just behind the #1 product?
- qwertycrackers 2y agoYoutube is a monopoly because it's not a very good business to be in and it basically lives off Google subsidization. It has plenty of openings for competition and none have too much forward movement.
- jtsiskin 2y agoYouTube made $50 billion last year - I wouldn’t call it subsidized
- slater 2y agorevenue or profit?
- omoikane 2y agoRevenue. From earnings release for 2024 Q3[1]: "YouTube's total ads and subscription revenues surpassed $50 billion over the past four quarters". 2024 Q4 says: "Together, Cloud and YouTube exited 2024 at an annual revenue run rate of $110 billion." [1] https://abc.xyz/investor/ https://abc.xyz/investor/
- ryosuke 2y agoLast I checked, Alphabet still doesn't break down profit/operating costs for YouTube.
- dpe82 2y agoYouTube has been profitable for a long time now...
- lotsofpulp 2y agoSource? Alphabet’s 10-K does not account for all of YouTube’s expenses as is if it were a standalone business. It doesn’t even seem possible.
- ryosuke 2y ago
- Judgmentality 2y agoI've always thought of how weird it is that YouTube even exists, as much as I love it. I have tried many times to figure out how it could exist independently of Google or some other tech giant, and watched many competitors try and fail. I'm not sure YouTube can exist outside of being a monopoly. I'd actually argue YouTube is the strongest evidence in existence in favor of monopolies, far better than anything Thiel has suggested. I want to be wrong about this but the evidence suggests it's so.
- sdwr 2y agoI have to guess it's some kind of uber situation, where the core business is only possible (let alone profitable) at enormous scale. Free video hosting for everyone, accessible to everyone at any time, is a heavy lift that doesn't make sense without videos that people watch millions of times.
- chii 2y ago> strongest evidence in existence in favor of monopolies i dont think it is evidence that monopoly is good.
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- spondylosaurus 2y ago- Vimeo is niche, but still around (and not bad). - YouTube isn't the dominant video player in every country! Niconico is super popular in Japan.
- theshackleford 2y ago> YouTube isn't the dominant video player in every country! Niconico is super popular in Japan. This doesn’t make sense because Niconico might be popular in Japan, but it is absolutely dominated by YouTube there and has been for a long time now.
- blackeyeblitzar 2y agoIt benefits from being bundled with other Google businesses like the ad network and all the data they collect from search. And there’s network effects of creators and users. But given how big it is, the platform should really be regulated like the communication utility and public square that it is.
- chii 2y agoThe platform shouldn't be regulated just because it is big. Copyright laws, and unfair enforcement via the platform with no recourse (e.g., the "DMCA"-esque rules that cirvumvent actual DMCA laws, if nothing else), needs to change to make it a fairer place.
- cma 2y agoThe real reason isn't bandwidth cost, it's visibility in the algorithm. You want a game trailer on your site: you can host it at a better bit rate for a great experience or use a competitor to. But if you do that, you get less views and thus less recommendations in the YouTube algorithm on your version posted there. So you out in a YouTube embed instead. Same with steam or other dominate online stores with recommendation algorithms: you can market your game with ads linking a store with a lower cut. Less sales and views on steam from that means you don't take off in their algorithm. Game flops. Buy ads pointing to steam store and it would have kicked off the self stoking cycle and done well in this hypothetical. The other store can't compete with rate alone even in cases where you are driving the traffic, because you are giving up driving even more traffic at at the other store through the augmentation of the algorithm.
- oerpli 2y agoAren't there companies that provide the "caching server for free" as a service? If I understand the author right, the big companies are allowed to set up caching servers at ISPs. Isn't this basically a CDN? If you spin up your own screaming start-up you would first go with akamai or whatever and if you reach sufficient scale you set up your own agreements with ISPs. Is the blog basically arguing for making it illegal to cut out the middle man here?
- bobdvb 2y agoMost providers who do cheap/free CDN have exclusions for serving video because the economics of it suck.
- felindev 2y agoOne very important factor is creators. Unless you got people to create on your platform, it isn't going anywhere. As far as I know, Youtube has best ad-revenue split of all platforms
- guax 2y agoI think the ad revenue is only attractive for new entrants and serves as motivator. Allow to go full time for low pay earlier and invest in the channel. At the point where you need return you have to have sponsor deals and/or merch and other streams. If you don't burn out before that.
- mattbrewsbytes 2y agoOne perspective is thinking about what would happen if YouTube is a separate entity from Alphabet/Google and more importantly adsense and search. I think a lot of people that turned a hobby into a full time content creator job on YouTube will find themselves with much less ad revenue. Adsense is going to start charging a third-party company for services, which YouTube would be at that point, and those costs are likely to eat into any adsense revenue creators make, across the board. There would also be the question of what search will power YouTube and if that can be physically separated from Google. There are likely economies of scale with how Google organizes data for search behind the curtain. That could be lost and increase YT operational costs or be another service YT needs to purchase.
- bobdvb 2y agoIf you could opt-out of Google ads and just be distributed/indexed by YouTube, then you'd be paying for hosting/delivery/indexing. Given that the economies of scale are spread among many users, the bigger streamers who this would benefit would then make the platform worse for everyone else. Youtube is spreading the burden of carrying all that content, from utter crap that no one watches, deep archive and onwards to Mr Beast, etc. There's a huge volume of content that Google hosts that's costing more than it earns them.
- mattbrewsbytes 2y agoYour comment I think drives my point even further. No content creator is paying for YT, neither is any end user[0]. So in this theoretical world where YT is separate from Google, now YT has to possibly pay Google for storage and one way to subsidize that would be to deduct it from creator's adsense revenue and/or limit the free content one can post in some way, like plans with different tiers of GB. In some ways in this theoretical world, the small/new upcoming creators would have a larger chasm to cross into profitability if they move from a free plan into a paid hosting/delivery plan before becoming profitable. Unless a small/new creator gets massive quickly or goes viral they will have a much longer time before adsense can fund the storage. This might mean that the nonsense content goes away because churning out volumes of content to have more "surface area" for people to discover a channel can't be profitable. [0] There may be premium content subscription options where some users pay a creator but I would imagine that is a minority of creators.
- freefaler 2y agoThe idea "to ban" ISP to put servers is not a very good one. (as mentioned in the article). It makes the internet work better and the ISP have lower costs that if there are a free-ish market they usually pass on the consumer. Not every "problem" needs more and more regulation. ISP's are not forced to host these servers, they gladly do, because it's cheaper to colocate a caching server than to clog the uplinks and pay for that traffic. It's a win-win solution. Big CDN providers also have their caching servers in ISPs. That's why building a CDN is a high-capex business. And if Youtube didn't have the money to pay for that traffic/server/code they woudln't have been successful. We had a competing product that we sold to a big media group around 2010. The economy of this kind of platforms is super skewed towards put humongous amount of money beforehand, try to achieve network effect and try to find a way to monetize it. Google might've been the only company that could've done it, because it's a 3 sided market: - uploaders/creators - advertisers - viewers They not only put the money, but they shared the revenue in a meaningful way and that's why their patience and huuuge costs gave them the lead they enjoy now. I am not sure that if you add all expences from the beginning they are net positive on this investment (if we measure the free cashflow generated after all capex has been paid off).
- bobdvb 2y agoIt's also important to recognise that content providers and CDNs adding private peering or hosting within ISPs doesn't diminish public peering. It actually frees up capacity on other transit routes. ISPs don't QoS some companies to give them better service, the only difference is that in-demand companies tend to invest in capacity in partnership with ISPs. But ultimately, in most cases those investing generally use the same capacity that everyone else can use. The only company who doesn't resell their CDN capacity is Netflix. The others, Google and Amazon, dog food their own products. If you want to use the same systems as Prime or Google Video then you absolutely can. Other streaming providers use public CDN capacity just like anyone else. Does YouTube get a favourable rate for capacity over other users? Yes and no. If Google doesn't charge YouTube then it's losing profit on the compute to sustain YT. But YT still has to make a profit and YT carries the cost burden of a great deal of legacy crap that a new entrant wouldn't. What Google has built is a miracle of engineering, to be able to get videos from relative nobodies to the other side of the in the world within minutes, at relatively high quality. While also allowing millions of kids to watch someone play Minecraft. I respect what they've built. Would it be good to have diversity? In some ways yes, but in other ways choice sucks. Fragmentation of places to view content is something that gets increasingly complained about in the streaming world. Is YouTube greedy? I don't think so. Building and maintaining what they've built is hard. As everyone else whose tried it knows. Just riding on their coat tails and leaching on their servers isn't sustainable. Ad blocking and saying Google deserves it isn't sustainable. In the extreme, if we burned down Google and said we wanted that model to end, the world would be a poorer place for it IMHO. Context: 24 years in media, a decade in streaming for big companies, no affiliation with Google.
- at0mic22 2y agoI used to follow the peertube project years ago. Unfortunately it never rocketstarted despite the fact, that P2P for video streaming is by far the most efficient way to distribute content.
- mrkramer 2y agoWhy would you sabotage YouTube?! Imo it is the best social internet app ever created, at least the one I spent the most time on. You have so much diverse content and everything is free....kind of. But at this point I think the only way to compete with YouTube is decentralized P2P video hosting product because there is no way anyone can afford hundreds of millions of dollars for centralized video hosting product. TikTok was able to pull it off tho but remember that it started as a short form video service and its parent company was beefy enough to invest billions into user and content acquisition.