1 A billion viewers and no profit for YouTube (Rolfe Winkler in The Wall Street Journal) Google nurtured YouTube into a cultural phenomenon, attracting more than one billion users each month. Still, YouTube hasn’t become a profitable business.
The online-video unit posted revenue of about $4 billion in 2014, up from $3 billion a year earlier, according to two people familiar with its financials. But while YouTube accounted for about 6% of Google’s overall sales last year, it didn’t contribute to earnings. After paying for content, and the equipment to deliver speedy videos, YouTube’s bottom line is “roughly break-even,” according to a person with knowledge of the figure.
By comparison, Facebook generated more than $12 billion in revenue, and nearly $3 billion in profit, from its 1.3 billion users last year. The results reflect YouTube’s struggles to expand its core audience beyond teens and tweens. Most YouTube users treat the site as a video repository to be accessed from links or embedded video players posted elsewhere, rather than visiting YouTube.com daily.
Google bought YouTube in 2006 for $1.65 billion, but generated little revenue in the early years. Past efforts to make YouTube more of a regular destination bore little fruit. One reason is that it caters to a narrow audience of young viewers. The narrow audience means advertisers typically reach far fewer people than via television, says Pivotal’s Mr. Weiser. He estimates that 9% of viewers account for 85% of online-video views.
2 Zero-hour contracts swell in UK (Phillip Inman in The Guardian) Nearly 700,000 people are on zero-hours contracts in their main job – a rise of more than 100,000 on a year ago – according to new official figures. The rise is likely to trigger renewed debate over the widespread use of contracts that offer no guarantee of hours and only those benefits guaranteed by law, such as holiday pay.
The Office for National Statistics said the number of people estimated to be employed on a zero-hours contract in their main job was 697,000, representing 2.3% of all people in employment. In the same period in 2013, the figure was 1.9% of all people in employment, or 586,000.
Some of Britain’s largest employers offer zero-hours contracts to employees. High street giants such as JD Wetherspoon, Burger King, Domino’s Pizza, Sports Direct and McDonald’s all use the deals. The ONS said over half of businesses in the hotel and catering sectors used the contracts. Universities and colleges have become large-scale users of zero-hours contracts, while an estimated 160,000 care staff are also on similar deals.
University and College Union general secretary, Sally Hunt, said: “The use of zero-hours and other forms of casualised contracts in education is one of the great scandals of our time. Without a proper contract staff cannot plan their lives on a month-to-month or even a week-to-week basis.”
3 Oil boom end threatens pain for Latin America (San Francisco Chronicle) Soaring oil prices the past decade transformed a rural backwater into Colombia’s richest city as nearby fields pumped black gold, drawing new businesses, international pop stars and vanity art projects. Now, crashing crude prices have the 45,000 residents of Puerto Gaitan bracing for a big fall, or already packing their bags. Many are questioning how the windfall was spent.
Similar upheaval is taking place across much of Latin America, where oil prices have fallen by nearly half since September, threatening to pull the rug out from under a decade-long economic boom. And the region’s leftist governments, which used the bonanza to lavish spending on social programs that entrenched them in power, now find themselves in the position of having to slash budgets amid rising social tensions.
Colombia isn’t the only country in the line of fire. By far the most pain is felt in Venezuela, whose socialist government earns 95 percent of its export income from oil. In recent months, lines at supermarkets have grown and shortages have worsened as the government, trying to avert a default, tightens its grip on scarce dollars needed to import everything from food to auto parts. Also at risk, analysts say, is OPEC member Ecuador, which last month secured a $7.5 billion credit line from China to cope with the crisis.