Friday, April 11, 2008

I'm Back But I'm Not Live

Yes, after a long hiatus from writing this blog, I'm back. What I've been doing? We can talk about that later.....

One of the trends that I've noticed that is catching on like wildfire in the videospace is lifecasting. Made popular by Justin TV, YouTube, UStream and others are getting into it. Why? I don't know. We all know that YouTube's biggest expense (and the other video sharing sites that host their own content) is bandwidth and if you have very fickle users the cost of CDN's and such. (Although I learned last night, admittedly, that YouTube's new API really wants you to use their bandwidth). Now imagine live streaming. Costs for Flash media server. Cost for 24/7 live bandwidth. The number would be staggering. BUT from a business perspective...if you can make more money than that it would make sense.

Now let's look at that angle: Currently videos monetize by a few ways. Pre Rolls, Post rolls, interstitials and banners. Pre and Post rolls are hitting about $20 CPM on YouTube. OK. Let's give banners $10. So at these rates its all about the eyeballs. If we do some quick and dirty math (really dirty math from my last Amazon AWS bill) we can make an assumption that a GB of data costs about 18 cents and that each minute of video is about 10MB. SO... 100 minutes of video data is about 1GB (obviously depending on quality). But to keep it simple let's say that's the cost. So let's say you have a banner and an interstitial (its live so you can't have pre and or post rolls). $30 CPM (on a good day).
Some math:
($30/$0.18)*100minutes/60=~277 hours or 11.5 days.
To break even you need 1000 viewers every 11.5 days.

Doable? Maybe. But the thing that we all have to realize is that no matter how exciting Paris Hilton's lifestyle might be, we all sleep at least 6 hours a day (well some of us get 4!). Are we really going to put all of the video editors out of business? After all these are the folks that are getting us to the juicy parts of the content faster than ever. And what about those bookmarking tools like MotionBox and VeoTag? Do you really want to sit through and watch Justin sleeping (by himself, of course)?

In my mind the economics of live streaming don't make sense, but on a more base level, the entertainment aspect of live life casting is just plain boring. Some events are great live but with more and more life casters out there - its just going to make our Internet slower when we need to sit and watch more important things (like Round 1 NCAA games on Thursday and Friday!)

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