21:05
aaronchua
it’s still losing money hand over fist. As I mentioned earlier, a recent Credit Suisse report estimates it will lose a whopping $470 million this year.
The reason for that is simple: while its revenues should grow at a more-than-respectable 20% in 2009, the number of streams it serves will grow at a rate almost double that (38%).
Contrast this with SeeMeTv, a youtube clone on mobile that is making money. It has one big difference relative to Youtube: user has to pay for each view and the revenue was co-shared with the person who uploaded the video. On SeeMeTv, each user on average earns 12 pounds per video!
Why is this so? Why can SeeMeTv charge for its service and be profitable while Youtube, the third largest site in the world, is making losses?
One of the reason is that micro payment is handled very efficiently on the mobile platform. Because of this, each click can be billed. This alone opens up different revenue models.
Another reason is the different usage context. Mobile is often used in situations where the user has no other options for entertainment. He may be on public transport. He may be stuck in a queue. Why not just pay a bit of money to download a funny video and entertain himself while having nothing to do? This context is vastly different when one is sitting in front of a screen and having all the time in the world to find free content.
Ultimately, this boils down to the fact that the Web and the mobile are vastly different media. On mobile, it is possible to make money on social media. Video is just one example. The same can be said for social networks. Facebook and MySpace are struggling for revenue while CyWorld and Flirtomatic are bringing in the profits.
Posted in: mobile,Personal
