YouTube is losing money even though it has more than 1 billion viewers

  • Google bought the online TV website for $1.7billion nine years ago
  • YouTube's infrastructure costs the company $3.8billion per year 
  • Analysts said users are not buying products from advertisements
  • Streaming services including Amazon and HBO are threats to YouTube
  • Google is having trouble attracting daily users to the website 

By Dan Bates for MailOnline

Published: 13:40 EST, 26 February 2015 | Updated: 16:40 EST, 26 February 2015

YouTube is not making any money despite having more than a billion viewers.

The online TV website is ‘roughly breaking even’ nine years after Google bought it for $1.7billion (£1.1billion).

Analysts said that there was ‘a lot of junk’ on YouTube and that the large number of young users did not buy anything from the adverts.

Another issue is that YouTube takes up a vast infrastructure which wipes out the $3.8billion (£2.5billion) revenue that it brings in each year.

YouTube spends $3.8billion on its infrastructure each year, but it's not making much profit. It is 'roughly breaking even' nine years after it was purchased by Google

YouTube spends $3.8billion on its infrastructure each year, but it's not making much profit. It is 'roughly breaking even' nine years after it was purchased by Google

Google sites had more than 150million unique viewers in January 2015. That's more than double AOL and Yahoo sites

Google sites had more than 150million unique viewers in January 2015. That's more than double AOL and Yahoo sites

The Wall Street Journal report highlights how hard it is to make money from the Internet even if you are one of the biggest websites in the world.

But some have cracked it and Netflix, the online TV and film service, reported a profit of $81million (£53million) in just the last quarter of 2014.

Statistics show that by many standards YouTube is a huge success - the video for pop hit Gangam Style has been seen more than two billion times.

However YouTube now under threat from other online streaming services such as Amazon, and the rise of quality TV shows from producers like HBO.

The official YouTube video for Gangnam Style by Psy has been viewed more than two billion times. It is the most-watched YouTube video to date

The official YouTube video for Gangnam Style by Psy has been viewed more than two billion times. It is the most-watched YouTube video to date

Google is also having trouble attracting users directly to YouTube and most people access it through a link or an embedded video on another site.

Instead Google wants people to turn on YouTube the way the turn on their TV.

The tech giant is now experimenting with targeted adverts which mean you see commercials for products that you have already searched for.

In the US YouTube has also bought the rights to American Football games and is also screening new episodes of Thomas the Tank Engine.

Pivotal Research analyst Brian Weiser said that the sheer amount of ‘junk’ on YouTube was a problem.

He said: ‘If they want meaningful TV budgets, they need to invest in TV content.’

 

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