Will a YouTube Platform Matter?

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Animoto has taken advantage of YouTube’s open programming interface. An Animoto user creates a photo slideshow on the Animoto site (above), and then easily uploads it to YouTube without visiting YouTube.com and logging in. Credit: Animoto

Exactly how YouTube will make money from its platform remains unclear, however. YouTube has said that there is no revenue-sharing model built into its open platform, but in that respect, it's not alone. The social-networking websites Facebook and Twitter, which supply platforms for developers to use, have no clear profit model either. YouTube contends that as more software and services are built on its platform, more users will sign up for them. Ultimately, that large audience could translate into revenue through advertising. At this point, however, none of these companies has implemented a reliable method for making money from its audience.

"I think, at its core, with all the success of YouTube from a viewer standpoint, one still has to ask, 'Where's the money?'" says Leichtman. "The knee-jerk way is advertising," he says. But as Google expands the YouTube service, it has to look for new ways to make money, he says. "YouTube is a phenomenon," Leichtman says, "but it's not a revenue phenomenon."