A Young Investor Explains Why YouTube Will Be Just Fine

Do you ever feel sorry for a pro athlete when a sports talk station mocks him and when the fans boo him? And then, do you feel stupid when you realize that the guy is in the first year of a five-year $60 million contract? Why feel bad? He's doing fine.

That’s not quite the way I feel about YouTube because, for one, reportedly it is not profitable, and two, YouTube is an invention the Internet needed to make. 

And yet, it’s getting beaten up lately, and I do feel badly. What’s a cultural phenomenon supposed to do!

So I was interested to read a defense of YouTube from investor Alex Pitti, who is--we should mention up top--just 21 years old. Which, as he points out rather loudly, is why his opinion about YouTube is so spot on — though parts really, really aren't.

In a piece published on Seeking Alpha titled, “The Future of YouTube Is Good For Google,” Pitti in a nutshell says this: TV is kind of toast, but YouTube will keep growing, and young people will keep leaving traditional TV, and keep watching YouTube. And if they migrate to Vessel, for $2.99 a month, that will give YouTube the ability to start charging, too. It's all good.

He points out something we might not really recognize fully about YouTube: Young viewers, especially, put a value on those quirky videos that others might not.

“There will be a paid version of YouTube in the future, especially if Vessel gains popularity,” he writes, adding a couple sentences later:  “The creation of Vessel isn't all bad news for YouTube, because it will be a test run to see the pricing power Internet video has. . . I think that Vessel has substantial pricing power and its $2.99 monthly price will be raised significantly in the future. YouTube is still in the driver's seat in terms of online content, so even if it is late to enter the space, it will still command a large market share in the future.”

And then, he says, newly enriched YouTube creators will make better videos, too. Win-win!

Pitti also points out that yes, Facebook is rapidly gaining video ground, but it has a totally different role in the video ecosystem. “Currently, 300 hours of video content is being uploaded to YouTube every minute,” he writes. “This number will likely continue to increase, but Facebook's metrics will increase faster. This is because YouTube is a platform to get people that you don't know to view your videos. Facebook is better for showing videos to your friends and family.”

The implication is that YouTube remains what St. Thomas Aquinas, in a totally different treatise, called the Unmoved Mover, as in “whatever is in motion must be put in motion by another.” Thomas was talking about God. I’m talking about YouTube. Without a place where creators first send their videos—that’s YouTube—what can come after?

We’ll see.
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