Forbes takes a professional look at the costs and the potential revenues of amateur video distribution.
"Internet optimists predict that online video, long-rumored to be the next big thing, is finally taking off: IDC estimates that video generated $230 million in revenue but will jump to $1.7 billion by 2010. In the meantime, the best play in Internet video may not be the companies that show off the clips, but the ones who deliver them to users' PCs.
The content-delivery business may be a $500 million a year business--twice the value of Internet video advertising and users fees--and is growing 25% per year, IDC estimates. It is dominated by big, publicly traded hosting providers such as Akamai Technologies and AT&T, as well as boutique shops such as Limelight, which also serves News Corp.'s MySpace and Microsoft's Xbox Live videogame service. Some of the biggest portals, like Yahoo! and Google, have built up their own content-delivery networks and don't need to pay a third party for many services.
The bandwidth companies typically charge video sites up to a penny per minute of video streamed. Big players who buy in bulk get discounted rates: Industry observers estimate that YouTube, which is streaming 40 million videos and 200 terabytes of data per day, may be paying between a tenth of a cent and half a cent per minute. Neither YouTube nor Limelight would comment on their pricing.”