What? This Blogger Worry? Bandwidth Will Always Be Free!

Back in the day, computer geeks sneered at wannabees like this blogger by calling his efforts "a waste of bandwidth." What?!? A look at Wikipedia provided: "In website hosting, the term "bandwidth" is often used to describe the amount of data transferred to or from the website or server within a prescribed period of time." There have been 2,227 Posts to Blogger (owned by Google) since June 24, 2003 when this blogger wrote

Tuesday, June 24, 2003
Hello! Welcome to my world! Rather than send e-mail to my friends (and foes), I decided to enter the 21st century and
publish a Web Log (Blog). Visit daily. Youneverknow.

Wow! This blog has been wasting bandwidth for nearly 6 years! Talk about a scam! This blogger is the Prince of Bandwidth Wastrels! If this is (fair & balanced) technological fraud, so be it.

[x Slate]
Do You Think Bandwidth Grows On Trees?
By Farhad Manjoo

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ad advertisers analysts articles bandwidth billion business com company connection content costs credit estimates facebook google href http hulu keep learn lose million month newspapers pay people photos point possible produced profits recent report revenues shows site suisse times trees tv videos watch wayne web world www yahoo year youtube

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Everyone knows that print newspapers are our generation's horse-and-buggy; in the most wired cities, they've been pummeled by competition from the Web. But it might surprise you to learn that one of the largest and most-celebrated new-media ventures is burning through cash at a rate that makes newspapers look like wise investments. It's called YouTube: According a recent report by analysts at the financial-services company Credit Suisse, Google will lose $470 million on the video-sharing site this year alone. To put it another way, the Boston Globe, which is on track to lose $85 million in 2009, is five times more profitable—or, rather, less unprofitable—than YouTube. All so you can watch this helium-voiced oddball whenever you want.

YouTube's troubles are surprisingly similar to those faced by newspapers. Just like your local daily, the company is struggling to sell enough in advertising to cover the enormous costs of storing and distributing its content. Newspapers have to pay to publish and deliver dead trees; YouTube has to pay for a gargantuan Internet connection to send videos to your computer and the millions of others who are demanding the most recent Dramatic Chipmunk mash-up. Google doesn't break out YouTube's profits and losses on its earnings statements, and of course it's possible that Credit Suisse's estimates are off. But if the analysts are at all close, YouTube, which Google bought in 2006, is in big trouble. As Benjamin Wayne, the CEO of the rival video-streaming company Fliqz, pointed out in a recent article for Silicon Alley Insider, not even Google can long sustain a company that's losing close to half a billion dollars a year.

But YouTube's problems point to a larger difficulty for many Web startups: "User-generated content" is proving to be a financial albatross. Two years ago, Time magazine named "you" its Person of the Year for doing your small part in fueling the Web 2.0 revolution. The magazine argued that by collecting and distributing the creations of millions of individuals, the Web is upending the way we learn about what's going on in the world around us. There's no doubt this is true; you experienced the presidential inauguration through millions of pictures captured by ordinary people, and a lot of what you learn these days comes from articles put together by the anonymous hordes who power Wikipedia. Yet even though they've changed the way we live, sites that collect and share content produced by all of us haven't done the one thing many tech evangelists said they'd do—make a ton of money. Or, in many cases, any money.

There's a simple reason for this: Advertisers don't like paying very much to support homemade photos and videos. As a result, the economics of user-generated sites are even more crushing than those of the newspaper business. At least newspapers see a proportional relationship between circulation and revenues—when the paper publishes great stories, it attracts more readers, and, in time, more advertisers. At YouTube, the relationship can be backward: The videos that get the most clicks—and are thus most expensive for YouTube to carry—trend toward the sort of lewd or random flavor that doesn't sit well with advertisers. Look at some of the site's hits over the last few days: a clip of a guest fainting on Glenn Beck's show filched from Fox News; a video of a Brazilian soccer coach punching a referee [Note this his video has been removed from YouTube due to terms of use violation.], also recorded from TV; a cell phone capture showing Britney Spears misidentify the city she's performing in; and a shot of a "boob grab" among spectators at the Masters golf tournament. Would you pay to stick your product's logo under any of them?

Probably not—YouTube sells ads on fewer than 10 percent of its videos. Credit Suisse estimates that 375 million people around the world will play about 75 billion YouTube videos this year. To serve up all these streams, the company has to pay for a broadband connection capable of hurtling data at the equivalent of 30 million megabits-per-second—about 6 million times as fast as your home Internet connection. All this bandwidth costs Google $360 million a year, the analysts estimate. Then there's the cost of the videos themselves: Even though many of the site's most popular content is uploaded for free from users, Credit Suisse says YouTube spends about $250 million a year to acquire licenses to broadcast professionally produced videos. Add in all other expenses, and the cost of running YouTube for one year exceeds $700 million. But the company makes only a fraction of that back in advertising—about $240 million in revenues for 2009, according to the report.

YouTube isn't alone in Poor House 2.0. Yahoo bought the popular photo-sharing site Flickr in 2005, and though the service might be marginally profitable, it certainly hasn't added appreciably to Yahoo's bottom line. (Yahoo similarly doesn't break out Flickr's financials.) Facebook provides an even better example. The social network is running up a huge tab to store and serve up all the photos, videos, and other junk you stuff into your profile. Last year, TechCrunch reported that Facebook spends $1 million a month on electricity, $500,000 a month on bandwidth, and up to $2 million per week on new servers to keep up with its users' insatiable photo-uploading needs. (Members post nearly a billion photos every month.) But Facebook gets relatively little in return for storing all your memories. Ad rates on its network are terribly low, the company doesn't make a profit, and it hasn't shed any light on how it will make good on investments that valued the company at $15 billion.

For all the frenzy surrounding citizen-produced media, the content that seems to do best online is the same stuff that did well offline—content produced by professionals. My colleague Jack Shafer recently listed the many services that people are willing to pay for online. They include music from iTunes, game videos from MLB.TV, reviews from Consumer Reports, and articles from the Wall Street Journal—and nothing made on some dude's cell phone. Or look at Hulu, the video site that shows TV shows and movies. It attracts far less traffic than YouTube does (and thus pays far less for bandwidth). But because advertisers are willing to pay much more to be featured on its videos, Hulu is on track to match YouTube's revenues and with much lower overhead.

YouTube has been trying to catch up to Hulu in the non-user-generated video business. It has signed content-licensing deals with several Hollywood studios and recording companies in the hopes that it can attract an audience—and advertisers—for the kind of quality programming we now run to Hulu for. But as Benjamin Wayne points out, those deals won't solve YouTube's fundamental problem; even if it does begin to make respectable profits from, say, showing old feature films, it'll still have to keep paying huge infrastructure costs to host the world's home videos. It's possible that over the next few years, Google's engineers could find a way to reduce dramatically the costs of hosting such a service. (They're capable of amazing things.) But that proposition is iffy. As Wayne argues, there's a very real possibility that YouTube as we know it is doomed. The company may have to institute restrictions to keep its bandwidth in check, or it could unveil any number of pay-per-use schemes (as some other video sites have done). Then the video free-for-all that we've grown to love will come to an end.

That would be unfortunate. Time wasn't wrong: YouTube and its fellow user-contributed sites really did change the world. Too bad nobody could find a way to pay for it. ♥

[Farhad Manjoo is Slate's technology columnist and the author of True Enough: Learning To Live in a Post-Fact Society. Manjoo graduated from Cornell University in 2000. While there, he wrote for and then served as editor-in-chief of the Cornell Daily Sun campus newspaper.]

Copyright © 2009 Washingtonpost.Newsweek Interactive Co.

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Copyright © 2009 Sapper's (Fair & Balanced) Rants & Raves

The Krait Bites Goodhair! Ptooooie!

The Krait hits the nail on the head today: The Dumbos Are Stupid! Case in point is the goober who sits in the Lone Star Governor's chair: Rick (Goodhair) Perry (R-TX). On Tax Day 2009, Goodhair showed up at the "Tax Protest aka Tea Party" at the Austin City Hall. Goodhair demagogued and the goofballs waved U.S. flags while shouting "Secede!" For the record, Texas nearly breaks even in federal spending per dollar of federal taxes paid.

(NM ranks first with $2 in federal spending for every buck remitted in federal taxes; Alaska, where the secessionist flame burns brightly, ranks third with $1.84 in federal spending for every dollar in taxes. Texas ranks thirty-fifth at $0.94 in federal spending for every federal tax dollar sent to DC from the Lone Star State.)

If Goodhair wants to lead a tax revolt, let him go to New Jersey — the last-place Garden State receives just $0.61 in federal spending for every buck it sends to DC. Goodhair would fit right in among NJ residents; his lettuce rivals the rug worn by Silvio Dante (Steven Van Zandt) in "The Sopranos." If this is a (fair & balanced) oxymoron — with emphasis on "moron," so be it.

[x NY Fishwrap]
Twitters From Texas
By Gail Collins

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administration american anti-tax austin calls campaign comes continued cotton country crowd demands dissolve entire failure farmer federal feel flag full government love noticed obama party pays people perry protests quarter really recent remember reports secede seems send signs special states tax texan texas twitters understood union washington waving wear yelling

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Let us pause to consider Rick Perry, the governor of Texas, and his feelings about seceding from the union.

This all started during the recent anti-tax protests. You undoubtedly saw the pictures of the demonstrations full of people wearing teabags or tricorner hats who kept comparing themselves to the founding fathers at the Boston Tea Party. True, when it comes to taxation without representation, they were slightly different from colonial New Englanders on the minor point of having representation. But let’s not be picky.

Have you ever noticed that the states where anti-tax sentiment is strongest are frequently the same states that get way more back from the federal government than they send in? Alaska gets $1.84 for every tax dollar it sends to Washington, which is a rate of return even Bernard Madoff never pretended to achieve. Yet there they were in Ketchikan waving “Taxed Enough Already!” signs and demanding an end to federal spending.

Also, have you noticed how places that pride themselves on being superpatriotic seem to have the most people who want to abandon the country entirely and set up shop on their own?

“What a great crowd,” Perry twittered, referring to the protesters he addressed in Austin, some of whom were waving American flags and yelling “Secede!”

Afterward, he told reporters that Texas had come into the union with a unique right “to leave if we decided to do that.” This is a beloved piece of state folklore despite its unfortunate drawback of being totally untrue.

“My hope is that America and Washington in particular pays attention,” Perry continued. “We’ve got a great union. There’s absolutely no reason to dissolve it. But if Washington continues to thumb their nose at the American people, who knows what may come of that.”

Later, while Perry was holding another press conference after signing a bill extolling states rights, he repeated the part about this being “a great union” but then said that he understood the secessionists’ feelings.

This is not exactly a ringing endorsement. It’s as if your spouse pointedly noted that it’s extremely easy to dissolve marriages these days, then added that although he was not currently advocating a divorce, he certainly understood why other people who knew you both might think it was a good idea.

And what about my country, right or wrong? Weren’t there complaints, some from Texan quarters, during the last election that Barack Obama seemed insufficiently up front about his love of country? Isn’t threatening to dissolve the union over the stimulus package a little less American than failure to wear a flag pin?

Remember the time when Michelle Obama said, in a moment she spent an entire campaign trying to take back, that 2008 was the first time she could remember ever feeling really proud of her country? Can you imagine how the conservative base would have reacted if she said that it was the first time she didn’t feel like renouncing her citizenship?

And how, by the way, can you stand at a rally waving the American flag while yelling “Secede”? It’s like an employer handing out “worker of the week” certificates to employees who just learned that he was moving the plant to Mexico.

Can’t feel the love.

Perry, who is the sort of person who calls other guys “dude,” used to be a cotton farmer, a group that seems to have a special talent for combining rugged individualism with intransigent demands for government assistance. Even as we speak, the Obama administration budget-cutters are trying to end a longstanding federal practice of paying the costs of storing the entire national cotton crop every year. No other farmers get this kind of special treatment, and I am sure Perry’s failure to mention it when he calls for an end to corporate bailouts is a terrible oversight that will be corrected immediately.

The big mystery here is why the tax-protest crowds were behaving as if the world was coming to an end when all Obama’s infant presidency has done is lower taxes for a vast majority of the public. And why people like Perry seem to feel compelled to egg them on.

The answer is that what’s left of the Republican Party is intent on cutting off the knees of the administration before it actually manages to fulfill any campaign promises on reducing the huge economic gap between the top 5 percent of the country and the rest of the populace. In pursuit of that mission, fortune favors the hysterical and rewards politicians who behave like gerbils that just bit into an electric wire.

We don’t want to blame all Texans for the high jinks in Austin. It’s a state full of lovely people, three-fourths of whom, according to a recent Rasmussen Reports poll, have no desire whatsoever to secede from the United States.

But Perry really understands how that other quarter feels. ♥

[Gail Collins joined the New York Times in 1995 as a member of the editorial board and later as an op-ed columnist. In 2001 she became the first woman ever appointed editor of the Times editorial page. At the beginning of 2007, she stepped down and began a leave in order to finish a sequel to her book, America's Women: 400 Years of Dolls, Drudges, Helpmates and Heroines. Collins returned to The Times as a columnist in July 2007. Besides America's Women, which was published in 2003, Ms. Collins is the author of Scorpion Tongues: Gossip, Celebrity and American Politics, and The Millennium Book, which she co-authored with her husband, Dan Collins. Her new book is about American women since 1960. Collins has a degree in journalism from Marquette University and an M.A. in government from the University of Massachusetts-Amherst.]

Copyright © 2009 The New York Times Company

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Copyright © 2009 Sapper's (Fair & Balanced) Rants & Raves