I would guess you wouldn't even sell 5% as many at $5. You're in a land-grab now, it would be nuts to even think about charging. Even if you did sell that many for $5, $1.5 million will end up small potatoes when the final chapter on the live online streaming video book is written.
While what justin.tv does is interesting, lets not get over our heads already. Youtube just needs to flick a switch to make most live video stream obsolete.
If by "flick a switch" you mean "re-architect their entire system to make low-latency highly-scaleable live video streaming cost effective", then I guess I agree with you. That's a pretty big switch though.
In case you don't know youtube already provides live streaming for certain events in US politics. They also recently stated streaming live domestic cricket event with an estimated viewer ship of ~50 million people at any given time (http://www.youtube.com/user/IPL YouTube don't show view counts on live events).
About being cost effective. You highly underestimate Google/YouTube's ability to throw money around with no short-terms shavings or profit interest.
The only legitimate reason thats preventing YouTube from rolling out streaming (that I can think of) is having an effective way of preventing adult and copyright material streaming, which is quite common at justin.tv (I would argue that it is the main source of their traffic).
You can only do so much with software, you probably need manpower to continuously monitor and prevent illegal activity, which is happening live. The problem is not technical, the problem is legal and management.
I predict YouTube Live stream for all will happen sometime before the end of this year.
YouTube has relied on Akamai to provide the streaming infrastructure for all of its live events so far, and as far as we know it has no live streaming infrastructure of its own. Akamai costs a lot of money - we actually overflow to them when our own infrastructure gets overloaded, but we try not to do that too often as it's prohibitively expensive.
"Live video is just something that we've always wanted to do, we've never had the resources to do it correctly, but now with Google, we hope to actually do it this year." - Steve Chen, co-founder of YouTube in 2008.
I think they are relying on Akamai till their own setup is ready to go. I think the argument that Youtube don't/can't have live streaming infrastructure is quite silly.
