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Thinking About Why YouTube Is a Monopoly

40 points| worldofmatthew | 1 year ago |worldofmatthew.com

58 comments

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itiswhatitis1|1 year ago

Simple - youtube doesn't suck!

Even in 2025 every other streaming site is unwatchable because of video buffering, videos not loading, and other hiccups in service that make it annoying as hell to use.

99% of websites in general suck, and the ones that don't get millions and billions of users.

Arrogant programmers think their products are great and they are geniuses, but in general 99.9% of their work is glitchy unusable trash and going nowhere.

Say what you want about youtube, it simply works better than anything else.

Clubber|1 year ago

Yes, this is all true, but the monopoly part is YouTube was supported by Google search profits for most of its existence, which its competitors don't have. The good part is YouTube is a really good service (ignoring their handling of gun related videos), the bad part is there are no viable competitors. If you like (legal) content they want to limit, block or otherwise hobble, you don't have any other great option.

milesrout|1 year ago

I find YouTube's UI performance quite bad but at least the performance of the videos themselves is good.

By UI performance I mean I click to go to the homepage and it loads a blank homepage with placeholder video thumbnails then spins for 5-10 seconds. I have fibre.

izacus|1 year ago

This. Just look at Nebula in comparison - it's positioning itself as a competitor and yet their developers didn't even think supporting landscape mode on Android tablets was important for a VIDEO app. It's so riddled with bugs that it's mostly unwatchable.

It's hard to take these "YouTube is popular due to monopoly" arguments seriously when the competition can't even get the basics right.

null_deref|1 year ago

Wow those were some strong words, that I’m not necessarily disagree with. I think one company that would be a counter argument is twitch, it’s main business is definitely live stream but it also hosts a lot of clips generated from the various streams, the user base is happy with the product I think.

wruza|1 year ago

Not as an argument, but a side note: this is an effect of webdev being a ball of mud with wires sticking out of it. They couldn’t make a bad video player if <video> was good enough as is. Same for forms, layouts, etc. The huge upside of desktop frameworks around 2000 was that they just worked as designed, and if you weren’t skilled, that was a big barrier for making bad ui (not a barrier for true idiots, but still). Web though, it is basically a recipe for making something so idiotic that you couldn’t even imagine, and it invites, when not requires, you to try.

Youtube may work better than “everything else”, except for basically any mainstream porn site. It is just so trash compared to pornhub or xvideos that according to your theory these sites could just start serving sfw content and destroy youtube. Idk about that.

bko|1 year ago

Exactly. It's bizarre to me that there's this idea of "fairness" that we have to purposely degrade a great product just so others can create a bad (but now relatively less bad) product, to stick it to Alphabet. Wasn't anti-monopoly policy supposed to benefit the consumer and not the corporations that are just behind the #1 product?

nothercastle|1 year ago

Because YouTube was created before copyright enforcement got strong. YouTube grew on pirated bootlegs until it got big enough it didn’t need them. You can’t replicate that again the ladder has been pulled after the launch and nobody else can do that.

mjevans|1 year ago

I argue TikTok did / is doing the same path.

freefaler|1 year ago

Everybody pirated, only YouTube succeeded. This can't be the reason.

tdeck|1 year ago

I wonder why the likes of Vimeo and DailyMotion from a similar era never seemed to really make it.

freefaler|1 year ago

The idea "to ban" ISP to put servers is not a very good one. (as mentioned in the article). It makes the internet work better and the ISP have lower costs that if there are a free-ish market they usually pass on the consumer. Not every "problem" needs more and more regulation.

ISP's are not forced to host these servers, they gladly do, because it's cheaper to colocate a caching server than to clog the uplinks and pay for that traffic. It's a win-win solution.

Big CDN providers also have their caching servers in ISPs. That's why building a CDN is a high-capex business. And if Youtube didn't have the money to pay for that traffic/server/code they woudln't have been successful.

We had a competing product that we sold to a big media group around 2010. The economy of this kind of platforms is super skewed towards put humongous amount of money beforehand, try to achieve network effect and try to find a way to monetize it. Google might've been the only company that could've done it, because it's a 3 sided market:

- uploaders/creators

- advertisers

- viewers

They not only put the money, but they shared the revenue in a meaningful way and that's why their patience and huuuge costs gave them the lead they enjoy now.

I am not sure that if you add all expences from the beginning they are net positive on this investment (if we measure the free cashflow generated after all capex has been paid off).

bobdvb|1 year ago

It's also important to recognise that content providers and CDNs adding private peering or hosting within ISPs doesn't diminish public peering. It actually frees up capacity on other transit routes.

ISPs don't QoS some companies to give them better service, the only difference is that in-demand companies tend to invest in capacity in partnership with ISPs. But ultimately, in most cases those investing generally use the same capacity that everyone else can use. The only company who doesn't resell their CDN capacity is Netflix. The others, Google and Amazon, dog food their own products. If you want to use the same systems as Prime or Google Video then you absolutely can. Other streaming providers use public CDN capacity just like anyone else.

Does YouTube get a favourable rate for capacity over other users? Yes and no. If Google doesn't charge YouTube then it's losing profit on the compute to sustain YT. But YT still has to make a profit and YT carries the cost burden of a great deal of legacy crap that a new entrant wouldn't. What Google has built is a miracle of engineering, to be able to get videos from relative nobodies to the other side of the in the world within minutes, at relatively high quality. While also allowing millions of kids to watch someone play Minecraft.

I respect what they've built. Would it be good to have diversity? In some ways yes, but in other ways choice sucks. Fragmentation of places to view content is something that gets increasingly complained about in the streaming world.

Is YouTube greedy? I don't think so. Building and maintaining what they've built is hard. As everyone else whose tried it knows. Just riding on their coat tails and leaching on their servers isn't sustainable. Ad blocking and saying Google deserves it isn't sustainable. In the extreme, if we burned down Google and said we wanted that model to end, the world would be a poorer place for it IMHO.

Context: 24 years in media, a decade in streaming for big companies, no affiliation with Google.

matt_s|1 year ago

One perspective is thinking about what would happen if YouTube is a separate entity from Alphabet/Google and more importantly adsense and search.

I think a lot of people that turned a hobby into a full time content creator job on YouTube will find themselves with much less ad revenue. Adsense is going to start charging a third-party company for services, which YouTube would be at that point, and those costs are likely to eat into any adsense revenue creators make, across the board.

There would also be the question of what search will power YouTube and if that can be physically separated from Google. There are likely economies of scale with how Google organizes data for search behind the curtain. That could be lost and increase YT operational costs or be another service YT needs to purchase.

bobdvb|1 year ago

If you could opt-out of Google ads and just be distributed/indexed by YouTube, then you'd be paying for hosting/delivery/indexing. Given that the economies of scale are spread among many users, the bigger streamers who this would benefit would then make the platform worse for everyone else.

Youtube is spreading the burden of carrying all that content, from utter crap that no one watches, deep archive and onwards to Mr Beast, etc. There's a huge volume of content that Google hosts that's costing more than it earns them.

qwertycrackers|1 year ago

Youtube is a monopoly because it's not a very good business to be in and it basically lives off Google subsidization. It has plenty of openings for competition and none have too much forward movement.

jtsiskin|1 year ago

YouTube made $50 billion last year - I wouldn’t call it subsidized

dpe82|1 year ago

YouTube has been profitable for a long time now...

Judgmentality|1 year ago

I've always thought of how weird it is that YouTube even exists, as much as I love it. I have tried many times to figure out how it could exist independently of Google or some other tech giant, and watched many competitors try and fail.

I'm not sure YouTube can exist outside of being a monopoly. I'd actually argue YouTube is the strongest evidence in existence in favor of monopolies, far better than anything Thiel has suggested.

I want to be wrong about this but the evidence suggests it's so.

sdwr|1 year ago

I have to guess it's some kind of uber situation, where the core business is only possible (let alone profitable) at enormous scale. Free video hosting for everyone, accessible to everyone at any time, is a heavy lift that doesn't make sense without videos that people watch millions of times.

chii|1 year ago

> strongest evidence in existence in favor of monopolies

i dont think it is evidence that monopoly is good.

oerpli|1 year ago

Aren't there companies that provide the "caching server for free" as a service?

If I understand the author right, the big companies are allowed to set up caching servers at ISPs.

Isn't this basically a CDN? If you spin up your own screaming start-up you would first go with akamai or whatever and if you reach sufficient scale you set up your own agreements with ISPs.

Is the blog basically arguing for making it illegal to cut out the middle man here?

bobdvb|1 year ago

Most providers who do cheap/free CDN have exclusions for serving video because the economics of it suck.

spondylosaurus|1 year ago

- Vimeo is niche, but still around (and not bad).

- YouTube isn't the dominant video player in every country! Niconico is super popular in Japan.

theshackleford|1 year ago

> YouTube isn't the dominant video player in every country! Niconico is super popular in Japan.

This doesn’t make sense because Niconico might be popular in Japan, but it is absolutely dominated by YouTube there and has been for a long time now.

cma|1 year ago

The real reason isn't bandwidth cost, it's visibility in the algorithm. You want a game trailer on your site: you can host it at a better bit rate for a great experience or use a competitor to. But if you do that, you get less views and thus less recommendations in the YouTube algorithm on your version posted there. So you out in a YouTube embed instead.

Same with steam or other dominate online stores with recommendation algorithms: you can market your game with ads linking a store with a lower cut. Less sales and views on steam from that means you don't take off in their algorithm. Game flops. Buy ads pointing to steam store and it would have kicked off the self stoking cycle and done well in this hypothetical. The other store can't compete with rate alone even in cases where you are driving the traffic, because you are giving up driving even more traffic at at the other store through the augmentation of the algorithm.

PaulHoule|1 year ago

I'd say it is the two-sided market for advertising.

jononor|1 year ago

I think this is a key aspect. Advertising is what brings in the money after all, to keep the service running. And arguably this market is 3-sided: advertisers, content creators and viewers. And as any multi-sided market there is a huge problem of bootstrapping. Advertisers will not be interested until there is sufficient viewers. Viewers not interested until there is enough content/creators. But creators not interested until there is enough viewers/advertisers. One would need a really smart plan and excellent execution getting into a place where such a model starts to be sustainable or feeding into itself. The economies of scale regarding video hosting might mean that a break even point requires millions of monthly users.

mrkramer|1 year ago

Why would you sabotage YouTube?! Imo it is the best social internet app ever created, at least the one I spent the most time on. You have so much diverse content and everything is free....kind of.

But at this point I think the only way to compete with YouTube is decentralized P2P video hosting product because there is no way anyone can afford hundreds of millions of dollars for centralized video hosting product. TikTok was able to pull it off tho but remember that it started as a short form video service and its parent company was beefy enough to invest billions into user and content acquisition.

amadeuspagel|1 year ago

I don't understand this kind of thinking.

Free video hosting is good.

The EU doesn't exist to torture every single market until a viable european competitor emerges.

It exists to protect the interests of european citizens (most of whom do not own video hosting platforms), which in this case are perfectly served by YouTube.

And european public television exists to make video journalism available to everyone, which is also served by YouTube. And it's great that you can see content from public television and independent journalism on the same platform.

felindev|1 year ago

One very important factor is creators. Unless you got people to create on your platform, it isn't going anywhere. As far as I know, Youtube has best ad-revenue split of all platforms

guax|1 year ago

I think the ad revenue is only attractive for new entrants and serves as motivator. Allow to go full time for low pay earlier and invest in the channel. At the point where you need return you have to have sponsor deals and/or merch and other streams.

If you don't burn out before that.

blackeyeblitzar|1 year ago

It benefits from being bundled with other Google businesses like the ad network and all the data they collect from search. And there’s network effects of creators and users. But given how big it is, the platform should really be regulated like the communication utility and public square that it is.

chii|1 year ago

The platform shouldn't be regulated just because it is big.

Copyright laws, and unfair enforcement via the platform with no recourse (e.g., the "DMCA"-esque rules that cirvumvent actual DMCA laws, if nothing else), needs to change to make it a fairer place.

at0mic22|1 year ago

I used to follow the peertube project years ago. Unfortunately it never rocketstarted despite the fact, that P2P for video streaming is by far the most efficient way to distribute content.