• by Wayne Friedman , Staff Writer, September 7, 2011

User-generated videos? They seem so... 2006. But based on the continued growth of YouTube, they're still very popular. The question is: What's next?

Active blogger, ESPN-highlight scene stealer, owner of the NBA champion Dallas Mavericks (and possible new owner of the Los Angeles Dodgers) Mark Cuban thinks nothing much has changed: that user-generated videos are about people putting up baby clips to show their grandmas.

Worse still -- or better, depending on your point of view -- is that YouTube continues to be "subsidizing the bandwidth of every individual in the world," says Cuban. We have to agree with that one.

YouTube's primary reason for being continues to be video recreational activities for the everyman. It may want to challenge the likes of Hulu or maybe even Netflix one day, but still remains loyal to its original intent. Owner Google isn't worried; it has bigger fish to fry.

YouTube might be profitable -- Google won't say officially. YouTube pulls in $1.3 billion in revenues, virtually all from advertising, according to one industry estimate. Next year that could reach $1.7 billion. Good news: Advertisers are slowly accepting more placement against users' videos. In 2010, 60 of the top 100 videos had ads; it is now 81 of the top 100.

But while there has been revenue growth, there has also been growth in bandwidth costs, according to analysts. (All to make sure your baby videos get their due). The number of ads per user-generated video has increased, as well as the quality of the advertisers.

Somewhat under the radar, YouTube continues to add professional channels for established media companies and TV producers. But its marketing results for consumers hasn't changed. YouTube isn't Hulu; it's YourVideo.

Looking back ten or more years ago, in the world of Internet 1.0, Napster offered some subsidization of its own - with free (some call it file-sharing) music. But Napster could not figure out how to start a real revenue stream -- like advertising, perhaps via a sharing arrangement with music labels. It didn't have a bigger media/tech company to look out for it, and to mend fences over content issues. But like YouTube, Napster had a big consumer base for its time: some 50 million per month.

The real news for Google is that YouTube now looks like a steal -- and could probably fetch more than the $1.65 billion Google paid for it in 2006, especially considering YouTube's current monthly consumer usage.

But according to Cuban, YouTube effectively is still giving money away, in terms of a very discounted price for bandwidth -- actually no price at all. (And there are still some content issues for major media owners as well). The question is: Will YouTube be the same five years from now?

It probably won't change much. YouTube will still need to keep costs low -- especially for the programming content of wannabe entertainment uploaders. For example, according to website Complex, Rebecca Black's video "Friday" only pulls in $100,000 for Black after 100 million YouTube views -- based on a $2 CPM and a 50% split with YouTube.

All to say, according to Cuban: "They haven't really accomplished anything." I disagree. I have some great trampoline tricks my brother needs to see -- and Tylenol should consider my video in its media plans.