I'm starting building a Youtube alternative

submitted by Justin from self.whatever

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[–]yetanotherone_sigh 5 insightful - 1 fun5 insightful - 0 fun6 insightful - 1 fun -  (2 children)

The reason we ended up with the model we have now (owned by a very big corporation and it's free, so you are the product)...

Youtube operated at a loss for a very long time. Might still be. Accounting tricks can hide this. Extremely large corporations can afford to operate parts of their company at a loss in order to drive out competition and corner the market.

As newspapers found out, people are unwilling to pay for what they can get for free. Many newspapers struggle to make ends meet even though they have an online presence. If there is a free alternative, people will flock to it and maybe 0.005% will pay for it. Since you have that happening, it automatically turns into a chicken-and-egg problem. With no paid subscribers, you are going to have trouble attracting good content. With no good content, you will have trouble attracting paying customers.

I'd have someone with some business experience in online startups take a hard look at the numbers in your business plan. Most online startups end up with some "angel investors" and fail anyway... the VAST majority. Because they can't make the numbers work long term.

My wife had a home business that folded up and nearly ruined us financially. Typically with startups, you work 18 hours a day and get paid peanuts, barely covering your costs. Almost all new businesses fail because the owner can't afford to operate it out of his pocket AND pay all his normal bills at the same time AND the interest on borrowed money. It often takes 5 years to show a profit or even break even. We were just getting to that point when we went bust. Almost sent us to bankruptcy. Just about lost the house. I picked up 4 jobs (2 full time and 2 part time) and basically worked all my waking hours for five years and brought us out of debt. I don't recommend this route AT ALL unless you have a solid written business plan. You will probably need an angel investor to get off the ground at any scale at all, or a large pile of money that will likely turn into a small one. Can you afford to operate this out of your pocket at a loss for several years? If the answer is no, go back and sharpen your pencil and work on your business plan some more.

Going up against Google and Alphabet is a very steep hill.

[–]Justin[S] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (1 child)

One of the major steps I am going to take once I have a workable product and before it is released to the general public is to reach out to various creators on youtube, focusing on ones who are actively looking for alternative platforms. My plan is to invite them to a closed demo of the website for three reasons: A] get feedback on the functionality from people who run successful Youtube channels B] build up a content library ahead of release so that there will be enough channels to justify a subscription and C] help spread the word about it. I think Youtube operates at or near a loss due mainly because anyone can upload a video, and so many of their uploads don't run any advertisements. If it's on a subscription model, every member that uploads a video is directly paying anywhere from $3-5 per month towards the websites infrastructure. Netflix for example, turns a profit of around a billion dollars last year and they guzzle bandwidth like it's no tomorrow.

I'm aware it's a monumental undertaking, but I think it's a risk vs reward situation and the reward is absolutely there. I'm continuously researching what infrastructure setups will be best in terms of storage, CDN providers, and so on. I'm sure the margins overall are going to be tight, but I think it would be sustainable enough to be a serious contender to Google, and let's be honest, SOMEBODY needs to challenge them.

[–]yetanotherone_sigh 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

Certainly I'm not saying "don't even think about doing it". But I am really cautious after our near disaster almost wrecked us. Just wanted to make sure you know what you are getting yourself into. Best of luck, and I mean that genuinely. As you say, someone needs to do it.