YouTube Won't Sell For Less Than $1.5 Billion 178
Joel from Sydney writes "According to a report in the New York Post, YouTube has informed potential buyers it won't be sold for anything less than $1.5 billion. The report lists Viacom, Disney, AOL, eBay and News Corp as potential buyers. Given that News Corp purchased MySpace last year for $580 million, is this a realistic figure?" From the article: "YouTube's stated business model is to 'pursue advertising,' but potential advertisers might be skittish considering industry estimates that roughly 90 percent of the content viewed on its site violates copyright laws. And at least one giant, Universal Music, is threatening to sue the company if its artists' songs keep appearing there. As it tries to focus on videos that don't use content owned by media companies, it yesterday launched the YouTube Underground, a contest to 'discover the most talented unsigned bands and musicians on YouTube,' backed by Cingular Wireless, Gibson Guitar and ABC's 'Good Morning America.'"
They are right. (Score:3, Insightful)
Re:They are right. (Score:5, Insightful)
Re: (Score:3, Funny)
Reduce via Lawsuit (Score:2)
I can see YouTube making a nice chunk of money, but 1.5 billion for a service that could easily be replicated doesn't seem realistic.
Re: (Score:3, Insightful)
Re: (Score:2)
Plus, they are really selective in enforcing copyright. Which is fine. It's their copyright. There's a video (among others) on YouTube that is a clip of the new Studio 60 show. Judd Hirsch's "rant" that he has on live TV. It's not put up by NBC, but I'm sure they could care less right now. All it does is build buzz for the show.
I agree in that I don't think YouTube can possibly make their money back on ad revenue alone. I mean, they serve up, what, 100 million videos a day now? I think I saw that
Re: (Score:2)
Poor A/V sync has been a bugaboo of theirs as well. There's nothing like clicking on a video, starting to watch it, and then noticing a couple or three minutes in that the audio and video have drifted so far apart that whatever you're watching looks like a badly-dubbed kung fu movie.
Re: (Score:2)
Re: (Score:2)
Free Speech (Score:4, Insightful)
Remember, the CEO of News Corp is Rupert Murdoch. Everything you see with the Fox logo is his. Its yearly revenue is around $24 billion. "News Corp" is a nice generic name that no one remembers while it's holdings grow out of control. Whenever you see Fox or Myspace or anything listed in the link above, you should be thinking one thing: "It's all News Corp under the direction of one man."
Pretty scary when you think about it.
Re: (Score:2)
badnewshughes [blogspot.com]
Dear Mr Murdoch song by drummer from Queen (Score:2, Interesting)
Roger Taylor (The drummer from Queen) wrote an excellent song about Rupert Murdoch, to be found on his 'Happiness' album.
Check out the Lyrics
Re: (Score:3, Insightful)
Re: (Score:2)
1.5 Billion dollars (Score:2, Funny)
<Dr Evil> We will keep showing asians lip-synching Backstreet Boys unless you pay us... a kajillion trillion dollars!</Dr Evil>
Re: (Score:2)
Huh? There are tons of anti-science, anti-education, creationist Republican trolls here on Slashdot, many of whom get uprated with surprising regularity.
Re: (Score:2)
Please note that Creationists are not anti-science or anti-education. In fact, without science, Creationism would be limited to the vague narrative provided by the Bible, which by itself isn't particularly interesting.
Re: (Score:2)
Re: (Score:2)
That is, by definition, anti-science.
It's also an assault on a more basic element of civilization, the perpetual fall of which is what really depresses intellectuals: critical thinking. Placing creationism on the same level as science is discounting thousands
Re: (Score:2, Offtopic)
Re: (Score:2, Informative)
Ahh, biased moderation (Score:2)
Swelled head (Score:4, Funny)
Let's see... Internet company... flaky business model... outrageous amounts of money... well, my time machine works -- I must be back in 1998!
Re:Swelled head (Score:5, Funny)
Re: (Score:2)
Web 2.0 ... (Score:2, Interesting)
1. Create service
2. Get other people to violate copyright with your service
3. Avoid Lawsuits
4. ???
5. Profit (or at least $1.5B)
I'd really love to have seen their pitch to any VC firms
Re:Web 2.0 ... (Score:5, Insightful)
If someone is insane enough to offer that much, well hot damn! Take the cash and run! Otherwise, they get to go about their business, with a bit more buzz-implied value than before.
Re: (Score:2, Interesting)
Broker: Sure we'll insure your car.
Client: Great, how much?
Broker: $100,000 for this year.
In other words, we don't want your business, but we don't want to tell you to your face. We'll just make our offer so astronomically high, you'll go quietly away.
Saying that, shouldn't they have made their figure $3 billion or something. £1.5B seems like they might get a bite.
Overpricing with no intent to sell (Score:3, Interesting)
I had that experience myself, asking once for about 5 times the regular price on a service I really didn't want to execute. Guess what ? They said yes.
Moral of the history: if you are going to overprice so you get a "no", make sure your price is so high there is absolutely no chance they will say yes.
I should have asked 20x, not 5x. YouTube should be asking for $100bi is that is what they want (not to sell).
Re: (Score:2)
Re: (Score:2)
Re:Web 2.0 ... (Score:5, Interesting)
Wow, now its a 5 step plan, pretty soon 12
Yeah, we all laughed at the sock puppet and the Superbowl ads, but there is still mega-profit in the
The coolest thing is that I heard on the news the other day where people at the other megacorps are realizing that there is profit in copyright infringement. Madonna's people are OK for uploaded stuff on youtube because they realize its free advertising. Much like the bands that allow taping of their concerts (we are looking at you Bob Weir). Who knows, maybe we can soon buy music in unencumbered digital formats at real market value. Maybe.
Re: (Score:3, Informative)
It's a start.
If you consider Yahoo buying Broadcast.com.... (Score:5, Interesting)
The price is huge, but it's not out of line with web-based social properties. Not that it's fair.... but the future revenues if it's managed well could be very big.
Re:If you consider Yahoo buying Broadcast.com.... (Score:5, Insightful)
Now, having that mindshare and brand recognition is certainly worth something, but YouTube itself is a prime example of why that's not as important as they think it is. YouTube grew out of nothing so incredibly fast, as have many other big websites, and there's no guarantee that its marketshare will last. If something better comes along, it will be trivial for the populace to move on to that and all but forget about YouTube.
When/if that happens, what is the owner of YouTube left with? A pile of servers full of a bunch of inactive accounts and a crapload of content that they don't actually own. It seems pretty damn risky to spend 1.5 billion dollars on. With that kind of money and a little determination, I'd imagine you could create quite a few impressive YouTube competitors, and maybe come up with something better.
Re:If you consider Yahoo buying Broadcast.com.... (Score:4, Insightful)
And look at Ford, look at Sony, look at a lot of other 'solid' brands that could seemingly do no wrong.... now battling survival.
It's a dream for many to create a market and dominate it. For now, YouTube has it. Others have tried (Veoh as an example) and failed. The formula isn't quite perfect, but with a little bit of tooling, YT could make a ton of entertainment revenue, as well as dominating perceived VoD. Already Warner has done a deal to legitimatize their videos on YT, and others will follow. It's an enviable position to be in.
Re: (Score:2)
I think you meant "battling for survival," but I like the way you put it. Especially in the case of Ford, it sometimes does seem like they're battling survival itself, and determined to overcome it at all costs.
Re: (Score:2)
Re:If you consider Yahoo buying Broadcast.com.... (Score:4, Insightful)
Re: (Score:3, Insightful)
YouTube has the content, but it's not exclusive content. They've certainly got a leg up on the competition, but they don't have any sort of lock-in.
I'm not rea
Re: (Score:2)
But, there's a sucker born every minute...
Re: (Score:3, Insightful)
Re:If you consider Yahoo buying Broadcast.com.... (Score:4, Insightful)
You can probably write a backend to organize and display breaking news stories, but can you organize, motivate, and edit for a large group of journalists out trying to discover new information?
It's less about what a website's servers do when you request a page, and more about the information/content/resources that those servers are drawing from. My point about YouTube is that there's nothing special about their content, it's not exclusive, they don't own it, and they're entirely reliant on their customers for it. It's a nice business model when you can get your customers to do most of your work for you, but you have to keep in mind that people are generally fickle.
YouTube and content ownership (Score:2)
Would that make them worth 1.5 bi
Re: (Score:2)
The bulk of YouTube's value is based on content that they did not create, nor do they have any claim to. The bulk of their value was built by their customers. Yet they could sell all of that for a huge chunk of money, and not have to share i
Re: (Score:2)
They can claim whatever rights they want, and I can upload as many clips from The Lion King as I feel like, but I don't think Disney would agree that YouTube now owns the rights to their movie.
1999 called.... (Score:5, Funny)
Re: (Score:3, Funny)
Now that you have got the theme music running in my head I am wondering if I can get old episodes on youtube.
It will go the Napster, Kazaa, eDonkey way (Score:5, Interesting)
Really, enjoy it while you can, because the record companies will sue YouTube into the ground. Soon.
So this company will not be worth anything in a year.
It Might But It Doesn't Have To (Score:5, Insightful)
Or, to put it another way, I think there are better alternatives to suing and the record companies have figured this out. When they sued Napster, Kazaa & eDonkey and then started suing users, I don't think their profits went up. I mean, they might have gotten a few million from the companies and a few thousand from the users that year. But they destroyed something that they could have taken advantage of. Most industries would kill for an infrastructure of people acting as their own marketing tools spreading their product around. Now, it was illegal because the product was being copied illegally. But if the record companies could have taken a look at the business model and adapted it to suit their needs and sued for the ability to call the shots instead of just pure cash, I think they would have come out further ahead in the long run.
You see, if the record companies looked at YouTube and tried to drive them in the ground, they'd only be trying to suppress something that has come about naturally. Why don't they just claim what is theirs and demand all the copyrighted material ad revenue goes straight to them? Why don't they try to work something out with YouTube in an attempt to generate a recurring income? I mean, surely YouTube can keep the quality down on the work or restrict it to certain songs so that people will feel compelled to purchase CDs/DVDs, can't they?
I think YouTube is like a wild stallion and the record industry is afraid of it. They can either shoot it dead (but that will just spawn more) or tame it and generate a steady income from it.
Re: (Score:3, Insightful)
They got rid of Napster, and while some may now use BitTorrent, a lot more use iTunes. Official commercial video distribution sites are going to get organized, and you can bet the big media companies are going to try to disrupt unofficial, unlicensed distribution. Note the analogy with Napster: it's not a matter of killing off the technical ability to download stuff free, what's important is killing off the brand. It's about what site the kids think of when they think of downloading stuff. That used to
Re: (Score:2)
Lets not quibble, if you really wanted DVD quality TV rips you could bittorrent them.
Youtube basically replaces TV (for me at least), and in some cases I have actually bought stuff based off of what I have watched on youtube as its been intresting but an
Re: (Score:2)
So this company will not be worth anything in a year.
This comment sounds like these false predictions from the past that you read and laugh at for how far from the truth they were. YouTube is about as likely to die as Apple.
My two cents : record companies will rather partner with YouTube to make money out of it than sue it (isn't it what Warner Music has been doing already?). Why kill the golden egg hen?
Sheeeesh... it would take that much just to (Score:5, Interesting)
Re: (Score:3, Informative)
Cost of bandwidth will go down. They may become successful enough that they can start advertising or charging a subscription or something.
Re: (Score:3, Informative)
Re: (Score:2, Insightful)
Then factor in the technical staff, storage costs, hardware, servers, etc., and Youtube could easily be burning through $5 million cash per month. Factor in possible litigation for copyright violations and the number skyrockets. Yahoo, Google and (just a few days ago) Microsoft have their own variations on the video sharing service. I wouldn't be surprised if Flickr and Webshots are not working on a simi
Re: (Score:2)
You could instead just wait until Youtube implements annoying ads, then create another video sharing site with more bandwidth paid off for a full year, no ads and all give everybody that signs up a $100 gift certificate and it would still run you cheaper than buying Youtube.
Re: (Score:2)
It would make a great loss leader for a broader based business. Its also a good fit with the news corp policy of running tabloid newspapers.
Re: (Score:2)
Work it out from there.
1.5 huh (Score:2, Insightful)
for $500m I could replicate You Tube in 3 months.
dotbomb 2.0 - how short are peoples memories?
Dean Collins
www.Cognation.net
Re: (Score:3, Interesting)
Re:1.5 huh (Score:5, Insightful)
Popularity?
Re:1.5 huh (Score:5, Funny)
Re: (Score:2)
That's the theory backing that the Zune will kill the iPod.
What YouTube has is... People (Score:2)
Is it worth $1.5 billion for those people? Well the dollar is falling, that's inflation for you. You never know, perhaps potential buyers will make a lower counter offer.
Re: (Score:2)
You could create a site with all the same functionality as YouTube, and just as much available bandwidth, but where would you get content? How would you persuade all the people posting videos to YouTube to switch to your MeeToobe site?
Where is the value? (Score:2)
Re: (Score:2)
On a related note, I still haven't understood why eBay paid 4Bn for a glorified Teamspeak.
If it were mine to sell... (Score:2, Insightful)
Pretty rich valuation (Score:2, Interesting)
It's a bargain. (Score:2)
The time is right to sell it (Score:3, Interesting)
For serious stuff, there's the Internet Archive (Score:5, Informative)
The Internet Archive [archive.org], which is a nonprofit, is also in the free video archiving business. Their main concern has been storage, of which they now have petabytes. Making the system friendly to the casual user has been a lower priority, and the Archive has a tiny staff. But you can get an Archive account and upload your video right now. If you have anything of historical significance, please do so.
The Archive has had some problems with bandwidth, but they just moved to a new data center, and that's improving. Last year, they obtained an archive of Greatful Dead recordings, which can be played out as streaming audio. The Deadheads, with their short-term memory loss problems, would play the same stuff over and over again. This was sucking up most of the outgoing bandwidth and interfering with video playback.
The Archive will probably be around long after YouTube is gone. Among other things, there's a duplicate of the Internet Archive in Egypt [bibalex.org].
Whotube? (Score:2)
Re: (Score:2)
Cost breakdown (Score:2)
Current value of impending lawsuits =$900,000,000
Payoffs to various politicians, judges and law enforcement = $150,000,000
Net value = $50,000,000*
* = value does not take into account private jets, ferarris, on-the-job chefs, Bawls dispensers or boardroom lapdances.
Why MySpace sold cheap (Score:2)
2. It's probably a liability because OMG STALKERS SOMEBODY THINK OF THE CHILDREN
Re: (Score:3, Interesting)
I'd assume that content would always surpass the value of distribution, but maybe that's what's changing.
Re: (Score:2, Insightful)
Re: (Score:2)
Re:Realistic? (Score:5, Funny)
Can I borrow your chicken for a while...?
Re: (Score:2)
I can sell you a chicken for $1.5b...
Re: (Score:2, Funny)
Re: (Score:3, Funny)
Re: (Score:2)
Since the definition of monetary worth is basically the max amount that someone is willing to pay, I'd say that the one willing to pay that much would buy it. If no one would pay $1.5b, then it wouldn't be worth $1.5b. So if it was worth that much, it must mean someone is willing to buy it at that price.
Re: (Score:2)
GoldenPalace.com?
Re: (Score:2)
Re: (Score:2)
Minor correction: you mean News Corporation [newscorp.com]. News International [newsint.co.uk] is the UK newspaper arm of News Corp.
Re: (Score:2)
Correct. Their business model seems to involve a bet IP as we know it will be dead before they run out of legal resources. Since others have been willing to place $580 million on the same bet, the idea doesn't seem so far out. I would not be too surprised if someone was to bet $1.5 billion.
Re: (Score:2)
The real cost is three orders of magnitude lower.
Re: (Score:2)
Just don't tell us you're one of those 'natural logarithm' freaks. We'd have to put you to the torch.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2, Insightful)
Youtube will always show copyrighted material even if its just the stuff that media companies use to hype new shows. There is also an emerging video download market which they could tap into and of course marketing.
Myspace is used by a huge amount of people to keep in touch with there friends and find out about
Wikipedia's Proof is in the Pudding (Score:2)
Re: (Score:2)
Not in America, dude. In UK English collective nouns are indeed treated as plurals. But in American English they generally aren't.
UK: "Microsoft have come out with a new way to screw consumers.US: "Microsoft has come out with a new way to screw consumers.
./: "Micro$oft suxxors!"
Re: (Score:3, Informative)
Collective nouns are treated as plurals, even if their construction suggests singular or uncountable.
The collective noun isn't the subject of the verb, the word "giant" is. The main clause, which should be grammatically correct without the appositive, is "And at least one giant is threatening...".
Re: (Score:2)
An out of court settlement with a copyright holder means every other copyright holder who has ever had anything put on youtube will come knocking real quick.
Re: (Score:3)