YouTube’s Live Event As Overhyped As The Company

I hate to add yet another post in the blogsphere about YouTube's live event from this past weekend, but I really have to ask, does anyone really care about it? It's not a big deal. Over the past ten years there have been a lot of live broadcasts on the web with music and entertainment acts. YouTube has no business model and can't figure out how to make money, even with all of their traffic, yet people are excited that YouTube did a live webcast as if this is some new, cutting-edge trend.

And why is there so much talk about how the webcast was delivered? I see all these posts talking about how YouTube worked with Akamai as if that is some sort of big news and people seem all surprised. Of course YouTube did not stream the event themselves and used a CDN. Who did they think was going to do this? Even TechCrunch says, "We’d heard rumors that Google had partnered with one of the big three live streaming services – Mogulus, Ustream or Justin.TV", "But instead of working with them, or building their own streaming media CDN, they chose to work with Akamai." Who does TechCrunch think Mogulus, Ustream and Justin.TV uses when they do large-scale live events? They aren't CDNs either. So even if one of them was "used", the event would have gone through Akamai, Limelight or another third party anyway. Why is anyone surprised by any of this? How is this a story?

But of course, that does not stop folks like TechCrunch trying to add drama by saying, "All this expensive CDN infrastructure really isn’t necessary to handle live video streams effectively. P2P software can handle it effectively and far cheaper since the users are serving most of the video to others." Really? Of all the P2P based services on the web, almost none of them support live streaming. Some say they do, but try getting a real demo of a live P2P stream. Octoshape works (used by CNN.com), but most others aren't doing live at all. So how is P2P going to solve the problem? It won't, but it's easy to simply make a blanket statement that says CDN is crap, just solve the problem with P2P.

I think too many people were expecting YouTube to roll out their own webcasting service, which makes no sense. If YouTube were to do that, they would not do it via their own network and would have to use a content delivery network. But the bigger question is does YouTube really need a live service? Absolutely not. If they can't make money with on-demand video, they won't make it with live content either.

I also read posts from a few folks who said the live event probably broke records and that it was the largest event ever online. First, that's not true. It is not possible for anyone to know what live broadcast has had the most simultaneous users because no one shares the raw data. Anyone can say anything they want since no one is checking it. I've done enough webcasts to know what the real numbers were, only to then see the client put out a press release the next day with numbers three times as large.

I don't get all the fuss about YouTube. It has no business model, no clear ad strategy, is slow to adopt technology, has poor video quality and has absolutely no focus at all. I'm reading articles now about how YouTube is starting to offer some videos in HD. You mean the same HD quality that ABC and others started offering a year and a half ago? Welcome to the game YouTube, late as always.

I think it is a shame YouTube gets so much attention in the press. I'm not surprised it happens, but in a time when we should be looking for those companies who truly have innovative products, instead, too much of our time is reading stories about companies like YouTube. I apologize for adding another yet post about them to your RSS reader.

  • http://newteevee.com Liz Gannes

    Dan, I agree the stories about yesterday’s event live stream are overdramatic, but YouTube gets press coverage for a very good reason: look at the market share. This site matters to a lot of people, and that’s a good reason to cover it.

  • http://www.BusinessOfVideo.com Dan Rayburn

    Agreed, YouTube’s market share is impressive. But I think in today’s business economy, market share is not enough and we should focus more on companies who might have less of a market share, but more of a business model. Although now that I say that, folks like Hulu do already get a ton of exposure.

  • Stef

    I agree. YouTube has a huge market share. In the first dotcom era, so-called marketshare was worth billions. But after the dotcom crash, marketshare meant zip. It is all about the profits. No profits, no value.
    YouTube is dotcom 2.0. YouTube is Googles most expensive hobby. Advertisers don’t want to be associated with puking student videos. Google has deep pockets but one day YouTube must make some money.

  • http://www.pixelfish.com Steve Condon

    In defense of Google/Youtube… Let’s not get too down on these guys. I agree that one day they must make money but in their defense they have been diligent enough not to launch some intrusive ad technology that may alienate their loyal audience. Much of the blame should be laid at the feet of the industry – those involved in the business of online video – for not creating industry standard ad technologies that help not hurt the business.

  • http://paulgraham.com Paul Graham

    You write:
    “Who does TechCrunch think Mogulus, Ustream and Justin.TV uses when they do large-scale live events? They aren’t CDNs either.”
    Actually you’re mistaken, at least about Justin.tv. They built their own CDN.

  • http://www.BusinessOfVideo.com Dan Rayburn

    Justin Tv uses the resources of Amazon. I don’t consider using a third party like Amazon to be “building their own CDN”. And they use Akamai as well.
    http://blog.streamingmedia.com/the_business_of_online_vi/2007/08/amazon-isnt-in-.html
    Mogulus and Ustream both use a third party CDN, although I don’t know if I am allowed to say which one.

  • Drew Robertson

    Chill dude. Of course YT version 1.0 doesn’t have a viable business model. Neither do any of the VoD services like Hulu, Veoh or Joost. To get to break-even, these folks have to scale to serve audiences that advertisers are interested in viz. > one (1) gross rating point. If YT decides to run a 24-7 linear channel with original content, they can make it. If they address a global audience. And they find advertisers who want to “engage” with Ukrainians, Guyanese, etc. And using P2P streaming wouldn’t hurt either. It’s cheap and it works in Asia.

  • Manny

    Dan,
    There you go again! Was the live event on YOUTUBE a huge undertaking? How is it that giant GOOGLE who has servers from here to eternity have to depend on a 3rd party? Are you sad they didn’t choose “no light” on LVLT or any other “rinky dinky operation”? I almost forgot – Google had to use MY AKAMAI. Sooner or later no one will be able to keep this gorilla away from the entire banana plantation. Do you think Google was worried about saving pennies or having the event be perfect – enter MY AKAMAI! Please, once again enlighten me! Who has the best technology in the areas that MY AKAMAI dwells? Please prove to me that anyone is better than Akamai. I know we are the MOST EXPENSIVE and the big boys still pick us over everyone else – WHY??
    Manny

  • http://www.buydrm.com Christopher Levy

    Or Steve we could be asking our industry why aren’t they _selling_ more content? Ads will never support all of these sites. Ad-supported only sites like Hulu won’t be around in a year.

  • paras. karate. chopra

    @DREW- at least the Hulu’s et.al. “have” a business model in place. YouTube is a cluster.f of bleeding cash and lost opportunity. It’s pathetic at best- a waste of time at worst and wow- way to build a dumb, blind monster, with tiny arms, no mouth- all bare ass swinging in the wind.
    @MANNY- PFft, bask in Your Akamai’s rapidly diminishing glory- their services are quickly becoming comparatively less robust and more generic- every day. Akamai a gorilla? Neh, they are a monster for sure but one with a voracious appetite, declining revenues and ridiculous overhead. When their margins collapse- ev’body will see that the gorilla wears no clothes.

  • Manny

    paras.karate.chopra
    Akamai has declining revenues? Since when? Less robust and more generic services – REALLY! Why is it then that the biggest companies in the WORLD need them badly, i.e. apple, microsoft, google, ibm, etc. Their free cash flow is so bad, uh? Ask tech guru Dan who is AKAMAI’s equal in terms of technology.
    Dan,
    I’m still waiting for your response to my question on the 24th. Please, do enlighten me.
    Manny

  • http://hyveup.com xavierv

    I watched a bit of the youtube live event and felt like I was watching American Idol. To my opinion, the concept of Youtube Live is more to advertise Youtube as a talent-finder.
    Tornante uses Web episodes to test nation-wide distributed movie concepts. Youtube live could serve the same purpose for unknown artists.

  • http://klessblog.blogspot.com/ Larry Kless

    Thanks for putting things in perspective Dan. I added to the YouTube noise with a few blog posts myself. While they have no business model or ad strategy they are a household name and the hype machine went into overdrive over the speculation of a live streaming service. Live video seems to do that to people.

  • http://www.global-mix.com Dom Robinson

    just to pick up on the p2p comment: Dan is right as far as I can see: Live P2P is yet to emerge as a real world technology.
    Actually even the service he reccomends fails back to a standard centralised streaming platform (their own) or CDN in all my testing. So far EVERY live p2p service may look like its working, but is NOT actually benefiting from the peering they proclaim and is actually just pulling a standard unicast stream from the source CDN.
    Some claim they can make a moderate saving, but if you think about Assymetrical networks liek ADSL you need MORE THAN ONE PEER to feed you a stream if you are at the edge. This means you must have MORE users in the core than you have at the edge, so the topology inversely scales. Thats pointless.
    As for Youtube? Well they are pretty good at getting popular interest in internet video and for that i am glad they exisit. They are however not the best exemplifiers of quality / commercial models which will make this market sustainable and that is a bit of a problem when setting expectations in such large audiences.
    Claims about live p2p are much more of a problem though.
    Dom

  • http://www.BusinessOfVideo.com Dan Rayburn

    Manny, you want me to respond but it’s hard to have a rational conversation with someone who has stock in any company as it makes it hard for them to listen to facts.
    You say “How is it that giant GOOGLE who has servers from here to eternity have to depend on a 3rd party?” Very simple. Google’s servers do not support streaming. So they have to use a third party. Has nothing to do with Akamai or anyone else. It has to do with the technology. If Google does not have streaming servers, they can’t do a live event which requires streaming servers.
    You say “I know we are the MOST EXPENSIVE and the big boys still pick us over everyone else – WHY??” The fact is that “some” customers pick Akamai, some don’t. Big boys like Netflix, XBOX, Disney and many others don’t use Akamai. There is nothing wrong with that. Customers have different needs and use different vendors. But making statements that Akamai is the only CDN in town for the services Google needed for the YouTube event is not accurate.
    Some customers use Akamai, some don’t and some use multiple CDNs. You have to keep it in perspective and be real with what is taking place in the market, even more so if you are an investor.

  • manny

    Dan,
    Thank you for your response.
    P.S. Happy Thanksgiving!
    Manny

  • http://www.willvideoforfood.com nalts

    I think it’s fair to say that YouTube Live wasn’t a business or tech story. It was a publicity event for the site and the sponsors, and it showed that known talent and amateurs can play on one stage. I don’t believe I’d watch the stream, but being at the event lit my brain on fire.
    Now about the business model- I fault YT for moving more briskly on development and ad strategies. But I like some of the late models- like Burger King and Seth MacFarlan. Brands need visibility, and YouTube delivers numbers 10x better than the rest of the video sites combined. Hulu’s ad friendly for almost all its content, which is a distinct advantage. But YouTube is social networking via video, and the other video sites are TV on a computer screen. The market will demand the former, and advertisers will follow.

  • http://flash-communications.net Brian Lesser

    Consider what happens when someone wants to see a video about some subject. Maybe it’s their favorite musician, an encounter between a plumber and a politician, a University lecture they missed, or something else that matters to them. What do they do? They visit YouTube, enter some text, and press the search button.
    Chances are they will find what they are looking for – if it is available.
    So YouTube’s dominance isn’t just a game about the numbers of videos served. The way people use YouTube fits very well with Google’s core business and its strategic goals. Google can afford to subsidize YouTube for a long time. Perhaps not as long as Microsoft can subsidize Zune, Live Search, and perhaps even Windows Media(?), but Google can afford to subsidize YouTube for long enough.
    YouTube has been fairly conservative about video. While other sites went to better codecs and larger video YouTube waited.
    So I think it is news when YouTube does live events or finally provides 2 Mbit 720p VOD streams. Which is not to say that the reporting of what they are doing is well researched, accurate, or includes any thoughtful perspective on the industry.

  • charles

    If you want to witness a good implementation of Live P2P Streaming, then I would suggest looking no further than TVAnts. This is still a relatively young streaming platform, but the implementation and reliability to date have been fantastic. The technology was developed by some Chinese university students and it has its strongest foothold in streaming the only thing that really matters (IMHO): live sports. I would suggest checking it out if your favorite basketball or football team is out-of-market. If the NFL won’t catch on to what MLB has known for years, in that it is in the best interests of your organization to make your content available in real-time to ALL of your fans no matter where they get their paid TV services from, then the people will find a way to use the technology at their disposal to fill the voids where content owners continue to ignore. BTW, I subscribe to Mosaic and have a Slingbox. MLB has given me an option, and I chose to take it, even with the Slingbox at my disposal. Unfortunately, the NFL chooses not to give their base a real option (1 or 2 games a week is NOT an option!).

  • http://justintvsports.net Mike from JustinTV

    If Youtube will open their live streaming for masses this could be end on justintv, they have money problems already, who can imagine that?

  • Toronto

    Who doesnt love youtube? yes i do agree that YouTube Live wasn’t a business and It was a publicity event for the site and the sponsors, and it showed that known talent and amateurs can play on one stage.