Magazine Predicts Online Video Shakeout in Near Future

Posted Tuesday, June 20, 2006 12:00 am

By: E&P Staff Business 2.0 magazine has published an article by writer Om Malik predicting that the online video site "bubble" is about to burst.

Malik says there are currently 173 online video services, including 85 that host and share videos, and that inivestors are starting to worry whether the market has become saturated.

Malik quotes David Hornik of August Capital as saying "It's not possible that this many video-sharing sites can exist and make money."

He notes that YouTube, the most popular of these video sites, now serves 40 million videos a day, which, theoretically, could bring in $15 million per year via embedded ads. But he notes that since a large slice of the company's content is taken illegally from TV or movies, many advertisers will likely be worried about copyright infringement. As well, he asserts, a company like YouTube could conceivably spend $5 million per year on hardware and bandwidth.

Malik quotes experts who believe there will soon be casualties in the online field.

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Magazine Predicts Online Video Shakeout in Near Future

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