YouTube Not Getting Into Live Streaming, After All (GOOG)

UStream, Justin.TV, Stickam, Mogulus and everyone else trying to make a business out of live streaming can breath a little easier. YouTube, which had previously said it would start live streaming in 2008, won't be getting into the business this year. And it probably won't next year, according to a source familiar with its plans.

Outsiders have long considered live streaming as a logical next step for YouTube, which dominates the market for pre-recorded Web video. Co-founder Steve Chen gave credence to the idea himself in February when he told Pop17's Sarah Meyers: "Live video is something we've always wanted to do but haven't had the resources to do it correctly, but now with Google we hope to launch something this year."

But our source says that Google (GOOG) has never really seriously considered a live video service. We're told that the notion was discussed months after Chen's statement, but that the idea was tabled, for a variety of reasons. Chief among them: It would add significantly to Google's infrastructure and bandwidth costs at a time when it's trying to prove that the $1.65 billion it paid to buy the company will, at some point, pay off.

We're told that YouTube execs estimated that if just 10% of the service's users took advantage of live streaming, the company would have to add 20% to 25% to its huge server and bandwidth infrastructure to support it. Given that advertising dollars for live streaming are even scarcer than they are on conventional Web video, that's a significant investment with minimal near-term return. YouTube's sales team is still trying to figure out how to sell the inventory it already has.

Live streaming could also create a new legal headache for YouTube even as it continues to fight with Viacom over copyright issues; sites like Justin.tv and UStream are already struggling to keeping copyrighted streams off their systems. Asked about YouTube's live streaming plans, a spokesperson said the company has "nothing more to share at this time."

At some point, if one or more of the live streaming services truly takes off, Google will be faced with a build vs. buy decision, but that won't happen for at least another year or two. Getting in early here doesn't seem to be a huge advantage: Yahoo launched a service in February, but its most popular lifecasters frequently have an audience of less than 100 people.

On February 28, Axel Springer, Business Insider's parent company, joined 31 other media groups and filed a $2.3 billion suit against Google in Dutch court, alleging losses suffered due to the company's advertising practices.