Research Outline

Research Question:
As video sits are uniquely expensive to maintain and operate:
a) ...how many sites can the market sustain at the same time? (As of now, it is looking like one video site per market)
b)...what is the revenue needed to be able to generate a profit? (Cost minus revenue = profit)

Background on YouTube
YouTube is the world’s fourth-largest site measured by uniques and the seventh largest measured by page views. Google jumped at the opportunity to purchase YouTube after only a year in the market for a total of $1.65 billion. However, was the purchase a leap before looking? As of the end of 2008, YouTube still has not generated profit for Google. In fact it is costing more and more money to keep YouTube’s site up and they are having issues with copyright and also struggling to learn how to turn a profit in YouTube while trying to stay as a free video hosting site. Currently YouTube is trying out a number of avenues to turn a profit. YouTube recently unveiled a screening room for indie films. It has allowed a special long form video for “content partners” and plans to sell music, movies, books, electronic games and concert tickets online while developing new advertising formats to boost revenue.
CBS is a prime example of how the old news networks can progress along with the new media format. Since CBS started to offer clips of its shows on YouTube two years ago, the network has registered more than 4.3 million views of its clips. Recently CBS announced it will offer full length episodes in exchange for the right to sell its own ad inventory. In the past two years, in addition to signing on CBS, YouTube has attracted some 900 content partners. YouTube CEO Chad Hurley is currently trying to attract more content partners as he expects the online ad market to grow to about $5 billion.

Methodology
-Conduct a historical track of YouTube's revenue growth from 2005 (first started) to 2008
What is YouTube's current cost of operation and what is the magic number needed to turn a profit to justify its pricetag?

-Compile a list of everything that YouTube has publicly announced that it is going to do to make a profit (Screening Room, AdSense, etc.) and predict which one will be the most profitable hence to best focus efforts and expansion on.

-Interview representatives from YouTube to gauge current concerns and future plans


Suggestions?