YouTube is another site that illustrates the power of focusing on building a dedicated audience before confusing it with ways to monetize. New York City Venture Capitalist Fred Wilson looks at YouTube’s potential revenue:
“YouTube could be generating $440 million in annual revenue.”
While Fred’s numbers illustrate an intriguing “what-if,” the site is not likely to use a pre-roll ad model like Fred used for modeling. This would mean that each video would have a 10 second commercial in front of it. This is the equivalent of asking people to use dial-up again, giving up broadband speed. This is not progress, and not likely a model the site will embrace.