[drats]

It's a harder technical problem than people think, in terms of scaling and encoding smoothly (and playing smoothly while the rest of the video loads, which Vimeo can't seem to do). Google also has tons of fibre in addition to server infrastructure.

It's also extremely hard to break even, as even a low resolution video in bandwidth terms is many times larger than a news article. News articles often manage to squeeze in more ads than YouTube did initially as well and news on the web is fairly cut-throat and thin margin. With an article you can just examine the plain text to put a relevant advert there, with video it's much harder (although certainly possible). There is also a problem with discovery and search related to this which needs high level machine learning and thus your average "we took a regular service - taxis, maids, food - and make a phone app which uses GPS and calls it to your house for a premium" type startup guys probably don't have a clue about what would be necessary.

There was also a lot of speculation that Google has been running YouTube at a loss since acquisition. If that's true it means that their partner program was paying content producers for a long time out of Google's pocket rather than out of real viability. So a competing site going for just technology needs to understand that they are competing with a distributed stable of talent. The same goes for paying money to music producers. A startup would get legally slammed just as they were taking off (and running out of runway). Perhaps the more aggressive advertising and long commercials at the start of videos is now exploiting this subsidy-created monopoly, and perhaps in turn that will give rise to a competitor.

edits: multiple, "steaming smoothly" to "playing smoothly"

[TillE]

> and playing smoothly while the rest of the video loads, which Vimeo can't seem to do

I've always had at least sporadic problems with YouTube's buffering, especially at 1080p. I have a very reliable 50Mbit connection, but often I find that YouTube can't stream fast enough.

Usually it's only with certain videos; popular videos always buffer very quickly, which makes me think it's something to do with how they tune their CDN.

[jrockway]

You have a 50Mbps connection to your ISP. Your ISP may not have a 50Mbps * (number of subscribers) connection to the Internet.