Talking Youtube Live

This past Nov 22nd Youtube had its first major live event. A concert featuring HDNet fave Joe Satriani , Katy Perry Will.I.Am and others.   Of course everyone involved in the space is chattering about whether or not the show was a success.

According to Mogulus, the live internet broadcast peaked at about 700k simultaneous users. That’s huge for an internet audience.   I think by any traditional Youtube measure , you have to call it a success, with some major gotchas.

First the reasons why it was a success:

700k would be a great audience for a small cable network. Especially for a 1 off show.

MORE IMPORTANT than the audience size was the amount of money that Youtube had to spend to generate that audience. My guess is that they only promoted it on their site  and via traditional PR.

A traditional small cable network would have had to spend several million dollars in off network promotions (radio, tv , net, mag, newspaper) in order to generate that size audience and then they would crow about how it was one of its biggest audiences ever.If Youtube can prove that it can generate this size audience on a weekly or monthly basis, it has a huge hit machine on its hands.

In particular, the audience was probably right in the 18 to 34 sweet spot that advertisers covet. More good news. They will be able to sell a ton of ads in and around their shows.

Thats on the positive side. What about the negative ?

While the cost to promote was extraordinarily low, the cost to deliver was incredibly high. The marginal cost to deliver one more viewer for even the smallest cable network is the same as the largest. Nothing. Youtube had to use the services of Akamai to deliver the event. Akamai by all accounts did a great job, but as the size of the audience grows, the total cost to deliver future Youtube live shows will increase. Cable networks do not have this problem.

Some estimates had the cost to Youtube at 25k or 10c Gb. 10c a gig works for ad hoc downloading, but when you have to have dedicated servers pushing out unicast streams, those costs go up. But even if its only 50k per hour. Extend that out for an entire day, and you are talking $1.2mm PER DAY to deliver an 800k continuous stream to only 700k average simultaneous users Slice and dice the online delivery costs any way you like. Its still incredibly expensive

Thats not going to cut it for any internet content source, even one owned by Google,  to be able to compete with even the smallest cable network.

The 2nd issue applies to the net as a whole. Akamai could devote its full resources to nicely deliver the show to 700k users. The real question is how many of these types of events could they deliver at once ? What if myspace or MTV came to them and there were 3 or more of these at the same time ? How many simultaneous users across multiple large events could Akamai and its competitors handle ?  I would be shocked if it could handle 3mm simultaneous 800k streams reliably.

There were reports of buffering and drop outs for the Youtube Live event. Thats acceptable today. It wont be acceptable as a TV alternative. It will be less acceptable if these live events are offered as alternatives to traditional TV

So there was good news and bad news. Anytime you attract and deliver 700k simultaneous users, its a success. Whether or not a content provider, even Youtube could ever make a profit doing anything more than 1 off events has yet to be determined

21 thoughts on “Talking Youtube Live

  1. Ed Hardy shirts

    Comment by hrewj -

  2. Just to let you know that during Obama’s possession, Akamai had reached the total of 6M (that is six Millions) simultaneous streamings without loosing quality.

    Althought that wasn’t from the same provider, I think that Akamai can handle with a couple more simultaneous events as YouTube Live Event.

    Comment by J. Barros -

  3. Sad thing is that viewing programming cable has dropouts and freezing as well. At least it does here in London.

    Comment by Henrik Vendelbo -

  4. HI Mark.

    What’s the near and further out term prospects for delivering feature length motion pictures via an outlet like YouTube to a truly “wide” (..somehow paying..) audience akin to those of cinematic releases?

    Hopefully the homes/venues to be receiving these transmissions would have the home or other site entertainment set-ups suitable for at least a near cinematic experience (..perhaps through virtual screen googles.., for the very big view, view… ).


    Comment by Carman N. Keddy -

  5. I hope the amount of online broadcasts become so large and so targeted
    I can watch them with only 1000’s or even 100’s of similar viewers.

    Maybe then I wouldn’t mind looking at a few ads for products I am
    actually interested in.

    What do you care about Youtube anyway, they are only successful
    because of copyrighted music and video. They will soon be gone, right?

    Comment by Jack -

  6. Are you now endorsing Youtube or just their success with this live event? It seems that if Google keeps trying, they will eventually make money off Youtube and they can afford to wait. Microsoft should have bought them first.

    Comment by econ365 -

  7. I didn’t get any stuttering or dropouts, but I had only watched for a few minutes (when the mythbusters guys appeared). I wonder what would have happened with youtube live if they tried a peer to peer system… I know the chances are: it will suck, but it’d be interesting to try. Also, your text entry box is too wide and the sidebar element covers up some of it, so for some of this I’m writing in the dark. Like the whole “so for some of this I’m” section.

    Comment by Tom Sucks -

  8. i’ve always thought that there would be a youtube “live” channel on cable like MTV and this was just prep work. If not, i still thought that.

    Comment by toddgilmore -

  9. Mark,

    I submitted a thoughtful response to your post last weekend. I’m surprised you elected not to allow it. Perhaps it was because I included a link to my blog post on the topic. If that was an offensive move, please forgive me. My original response is included below. I would at least like to know why you elected not to post it.

    Thank you,
    Thanks as always for initiating a conversation. Even during YouTube Live on Saturday night, I was anticipating the forthcoming blogosphere discussion. While I can understand why many choose to judge the event based upon familiar TV numbers, I’m not convinced it’s a fair measuring stick. Consider early cable TV ratings – and how they compared to the networks. Back then, nobody understood the long tail effect. This IMO is a further extension of the evolution of digital entertainment.

    Television is a passive medium. The Internet requires audience members to be actively engaged – to drive the experience. People who “watched” YouTube Live did not sit passively in front of their screens the way they would a TV show. Rather they participated in the event – toggling between channels, commenting in the chat feed, rating performances, Googling things they found interesting (Funtwo), even making and uploading their own videos.

    The participatory nature of the YouTube Live experience extends far beyond the event itself. Allow me to offer this timely analogy: YouTube Live was like the Thanksgiving meal you’ll prepare Thursday. While the food is important, what really matters is the conversation you and your guests have before, during and after the meal. That’s what makes for a memorable event. That’s why YouTube Live is important.

    Comment by Korye Logan -

  10. I would imagine that the cost for streaming these types of events will decrease due to the ever increasing advancements in server and data technologies. I believe that online video will continue to eat away at televisions audience base.

    Comment by Houston Electrician -

  11. I don’t see why internet sites would need to be able to deliver live programming to compete with small cable networks. Aside from sporting events and political debates aren’t the vast majority television shows on small cable networks pre-recorded?

    Comment by Daniel -

  12. Even though 700K is a nice audience – I assume it was the global audience.
    And that might make it difficult to monetize – at lease the share coming from countries that are not attractive to advertisers, e.g. because they don’t sell their products there.

    Comment by Pascal -

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  14. A presedential debate was YouTube’s first major live event.

    Comment by Brandon -

  15. Mark,

    Great points, I’d like to hear your comments on the NFL’s decision to broadcast some of their games in 3-D.

    Maybe food for the next blog?

    Comment by Sam -

  16. god i love this blog

    Comment by simon -

  17. I wonder how many viewers had the hardware to watch this with a large display and good sound system plus the comfort of sitting on the couch and allowing a whole “living room audience” to view it together. This was great for viewers who have a home theater PC hooked to their sound sytem and big screen TV/Monitor. For those watching at a computer desk with a CRT monitor in a small window and typical crappy PC speakers the experience was less than it could be.

    A step in the right direction though. I’d love to be able to pull up an HDNet concert that I missed and download the content to watch when I’m good and ready and the mood is right.

    Comment by Jeff in Dallas -

  18. Mark,

    i was wondering when you were going to post something about this.

    it’s only a matter of time before youtube focuses on live events. seems like the internet 1998 all over again.

    Comment by Jordan Blum -

  19. I dont get it. 10 plus years after you pioneered broadcasting over the internet why doesnt it
    scale today with lower broadband costs? Oh well, maybe you should team
    up with some of the YouTube execs and help them figure it out. I can
    introduce you if you dont already have all their names and numbers. If
    anybody can figure it out is you Mark…

    Comment by Sean Doyle -

  20. Congratulations on the success. I am surprised you don’t have any ideas to improve the delivery of the content.

    Another point that you had made in your earlier post that you forgot to mention was that these were simultaneous AND live viewers. Those eyeballs locked up at the same time for a live braodcast are much more valuable than later views.

    Comment by bill ross -

  21. MORE IMPORTANT than the audience size was the amount of money that Youtube had to spend to generate that audience. My guess is that they only promoted it on their site and via traditional PR.

    A traditional small cable network would have had to spend several million dollars in off network promotions (radio, tv , net, mag, newspaper) in order to generate that size audience…

    Keep in mind that advertizing on their own site isn’t technically free. They have to give up other advertising opportunities – i.e. they have to turn-down advertising paid for by third-party companies over that same period of time.

    Comment by Brit -

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