Right, it's the scale and seemingly limitless ceiling.... seems crazy. Obviously there's a lot of low res tiny images on there etc but there's also not -- and for years and years?
I remember back around 2009(?) ish I had a chance to talk to some folks at Justin.tv (now twitch) and they said one ad on the stream every few hours more than covers all the costs. What changed?
I guess the videos are much more high resolution now than the webcam size 320x240 videos back then but has cost gone up that much?
What? They're crazy competitive these days. Every popular ad space online has been bought by the highest bidder. AdWords, Facebook, Imgur, Reddit, companies are dumping cash like mad. The market grew by billions over the past decade.
The ad market basically bifurcated. It's a land of the haves and have nots
The big ad platforms like Facebook and Google have thrived, of course. And as platforms like Snapchat have aged they've gradually improved the rates they're getting for their ad space (a typical process).
The scale of online advertising today isn't because the industry's median or average CPMs went up 100 fold. The volume went up dramatically over the last 10-15 years with the traffic for the big services. The big advertisers brought billion dollar ad budgets online and handed them to Facebook, not to one-click image hosts.
Your typical one-click image host is not going to command better ad rates today vs 15 years ago. It's a worse context than it was back then, actually. Back then advertisers were relatively stupid when it came to online advertising, today they're a lot more sophisticated, and a lot more strict about where they place ads (eg porn on one-click image hosts is a big problem for advertisers). The big, rich platforms like Facebook eat a large share of the high paying advertising. What's left for something like a one-click image host, is very, very low paying ads that you have to run a trillion of to make money.
I used to work for a company in a niche industry that used to clear 7 figures a year using the online platform I put together back in its heyday. And while traffic isn't quite as good as it used to be, it's still at about 70%. Their ad revenue is today about 1/8th of what they were making back in 2011-2015ish, and they basically have zero dedicated staff to the platform. I just do some maintenance and bug fixes for them every month.
But you need to consider that so have hosting costs-- proportionately too. Hosting data was incredibly expensive 10 years ago. If the math was working then, it should at least be pretty close to working now.
For some segments that's true. Image hosting wasn't incredibly expensive 10 years ago. It was very much on the lighter side in cost compared to MegaUpload or YouTube type services.
Image file sizes increasing dramatically as smartphones started producing photo sizes that would have been considered massive 15 years ago, saturated much of the gains in cost to hardware.
It's easier to run a one-click image host (like the early Imgur) as a solo operator today versus back then. It's not much cheaper when you account for the larger image files (unless you severely limit the file size, which won't be a popular choice with users, most of which just blast four billion smartphone photos, don't think much about image sizes, and want to upload them as is without thinking about any of that).
Bandwidth is a heck of a lot cheaper these days (I remember a previous employer paying $10k/mo for a 100MB circuit in San Francisco 10ish years ago). That said while the prices are much lower, people are realizing that not all bandwidth is created equal, e.g to get good connectivity to some regions can still be ludicrously expensive, for example if you want to deliver to Singapore, Australia, etc, or say you wait to get content from the USA to South America with reasonable reliability and low latency.
I think a lot of tech companies meet the fate where they get diminishing returns on growth and have to keep hiring and spending a lot of cash to chase smaller and smaller gains. Bandwidth is expensive but having thousands of highly compensated employees is also very expensive, probably more so.
