<sarcasm>
biggest failure of the 1890s: the automobile.
More costly than a horse, less accessible than a train. How will there ever be a positive return on investment when it comes to the horseless carriage...
The original car makers did not have the problem of how to make cars profitable, theirs' was a problem of sales and marketing. Once a car was improved enough to make it affordable they received more sales.
Youtube certainly doesn't have a sales/marketing problem. It has a ton of traffic every day. Here the problem is that of figuring out how to make money in the first place.
It's easy to find examples of things that struggled at first only to become popular later, but at the same time there have also been products that struggled at first and still failed later.
Every car that rolled off the line would be sold for more than it cost to make it. Per unit, cars are profitable.
And even considering sunk costs like automobile design, management overhead, blah blah blah, every car sold makes the company money. They weren't sold at or under cost to entice people to buy them.
Whereas YouTube's bandwidth isn't free and every time they serve a video, they incur a cost that they don't get recompense for.
Sure, the automobile industry may not have been immediately profitable in the beginning (because constructing cars is a costly business), but don't confuse per unit profits with overall profits. YouTube had neither for the longest time and is only now dropping ads into videos.
You cannot under any circumstances make money giving your product away for free.
Define "free". Google gave their search away for free until they added advertising. Youtube serves ads as well, and obviously it's their hope that they can make ends meet.
More costly than a horse, less accessible than a train. How will there ever be a positive return on investment when it comes to the horseless carriage...
that and more when we return. </sarcasm>