How do image and video hosting sites stay in business?

I once tried an image hosting website and after a month I was already losing money because of the bandwidth so I wonder how do sites like:

Photobucket.com, imageshack.us and youtube.com make enough money to stay in business.

I mean photobucket's bandwidth each month is couple million megabytes...thats heck of a hosting bill each month. I know they got ads on their sites but do they really make that much money of ads?

 

Youtube does not make money. I believe it was bleeding about $1 million a month for bandwidth itself. Youtube does not charge anything anyways.

Some other sites probably make money from some other means like upselling or through advertisement.

 

actually, youtube was on the road to profitability before google bought them. Their advantage lies in buying bandwidth in bulk - less than .05 per GB.

 

You saying that once you're that big you get to buy bandwidth cheaper in bulk?

Do you think photobucket is making money every month or losing?

 

I always wanted to start an image hosting website but could never think of how i could stay in business and afford the bandwidth. I really dont know how photobucket is paying their bills each month.

Does anyone know their revenue numbers for 2006?

 

Here is a recent interview with the founder of photobucket:

http://www.techrockies.com/fullstory/0004550.html

 

Hmm interesting. I used to own an image hosting site but sold it after two months because bandwidth just kept growing. I want to get back into though but I just don't know if its worth it.

If you could have an image hosting site would you? Is it worth getting into?

 

Sure, bandwidth gets cheaper as you buy 10mbps, 100mbps, 1000mbps, etc etc

 

Last summer I had a pretty profitable image hosting site. Made money from advertisements and link sales. You can also collect email addresses and send advertisements one a week or something.

 

So what happened to it? You dont own it anymore?

 

I was forced to shut down because some users uploaded pornography. That is my biggest tip - make sure your host will allow US legal pornography.

 

Why didnt you ban the ip's?

 

It takes just 1 upload of pornography to be shut down.

 

Couldn't you just have told them what happened and you were sorting the issue out. Also, couldn't you have just moved it to another server.

When ever I look into making a site and I want to make it profitable I always work out how much I am likely to make from using 1gb of bandwidth and then I will take the cost of the bandwidth away from the amount that I would make and theres my earnings. So the more bandwidth I use the more money I will make if my workings are correct in the first place.

 

Yes and Yes. I called the host within 2 hours of discovering the issue, but TOS are TOS, which I understand. It takes QUITE a bit of time to download massive amounts of images and reupload them to a new server. Site was down for 2 days. Everyone had moved on to another host, even though mine had some very unique features. Ended up scrapping the domain for $125.

 

How did your host know that there were pornographic pictures upload on your website? Do they sit there and watch your site everyday? When i had my image hosting site couple months ago i had couple people upload pornographic images once a day, all i did was deleted them every time i went to check the uploaded images.

 

My thinking on this was that someone uploaded a pornographic image and then contacted my host. A competitor I assume - I was starting to knock out quite a few "real" companies.

 

Couldn't you have just had an approval system on your site where you have to approve any content before it gets shown to the general public.

 

I guess, but when you are receiving 500-1000 uploads per day, it would take quite a long time. Also, users usually upload them images when the need them and if there is an approval process, they will more than likely go somewhere else.

 

Yea there is a point there, they usually want their images instantly.
Anyways can you answer couple questions for me.

How long did you have the site?
How many members did you end up having?
Remember how much bandwidth were you using?
How much were you making off the website?
Would you recommend getting into image hosting business?