Interesting. To me, Youtube appears more "ghetto" than other video sharing services, but it's getting the most eyeballs so why isn't Youtube making money? Granted it does bleed incredibly for bandwidth / month, but Youtube does remain center of attention for more users and even mainstream media. I'd say Google should start having a subscription model in place (e.g. Youtube Pro) to resolve that problem altogether.
Kevin Lim Social Media Provocateur http://theory.isthereason.com This email is: [ ] bloggable [X] ask first [ ] private email locator: ╔╗╔═╦╗ ║╚╣║║╚╗ ╚═╩═╩═╝ On Mon, Jun 16, 2008 at 1:24 PM, Roxanne Darling <[EMAIL PROTECTED]> wrote: > Fascinating Heath - thank you for posting it. It may be one of the > harbingers of the bursting bubble of internet video. > The main thing I see different between this bubble and the first bubble, is > that back then, it was the creators who got the investors all excited about > their ideas. Now, it is the users who are driving demand. There still is > an absence of many sustainable finance models, but to me there is a huge > difference between a few geeks with "cool" ideas and millions of users > demanding their daily fix of video. Think of the research value the > political campaigns are getting from being to search all the old stuff > (embarrassing speeches) that are steadily being posted online. > > Aloha, > > Rox > > On Mon, Jun 16, 2008 at 7:17 AM, Patrick Delongchamp > <[EMAIL PROTECTED]> > wrote: > >> Interesting indeed. >> >> I couldn't believe how badly they botched Google Video. They never >> should have had to buy Youtube in the first place. >> >> I'm surprised though that Youtube isn't bringing in much money. >> >> >> On Mon, Jun 16, 2008 at 11:32 AM, Heath >> <[EMAIL PROTECTED]<heathparks%40msn.com>> >> wrote: >> > Very instering article on cnet today >> > >> > http://news.cnet.com/8301-13506_3-9968220-17.html?tag=cnetfd.mt >> > >> > The big points are that Google overpaid for Youtube, (who didn't know >> > that?) But the idea that they could actually dump it, because they >> > can't figure out a way to make money off user generated video...I >> > think that is a real possibility. And I fear what that would mean >> > for all of the other video hosting sites if it happens. >> > >> > Read below.. >> > >> > Do you remember the good ol' days of YouTube? Back when a private >> > company owned it and you could post and view whatever you wanted up >> > there and no one would say a word because, well, it was practically >> > bankrupt and copyright owners knew they wouldn't get anything out of >> > a lawsuit? Those were the days, weren't they? >> > >> > Now, after a $1.65 billion buyout by Google, YouTube is not only a >> > veritable junkyard for all the crap we didn't watch a couple years >> > ago, but a bloated mess that costs too much to operate, has a huge >> > lawyer target on it, and barely incurs revenue. >> > >> > And to make matters worse, Eric Schmidt, the CEO of Google, has no >> > idea what to do about it. >> > >> > Speaking to The New Yorker, Schmidt said that it "seemed obvious" >> > that Google should be able to generate "significant amounts of money" >> > from YouTube, but so far, it has no idea what to do. >> > >> > "The goal for YouTube is to build a tremendous community....In the >> > case of YouTube we might be wrong," he said. "We have enough leverage >> > that we have the leverage of time. We can invest for scale and not >> > have to make money right now, he said. Hopefully our system and >> > judgment is good enough if something is not going to pay out, we can >> > change it." >> > >> > But is changing it really the best idea? Since Google acquired >> > YouTube, the company has tried desperately to make something, >> > anything, from its $1.65 billion investment, but so far, it has >> > failed miserably. Of course, it thinks that 'pre- and post-roll' >> > advertisements may work, but the company isn't too sure. >> > >> > And therein lies the rub. If Google is unsure of how it can turn a >> > profit on YouTube and it still has no idea if it will be able to get >> > a return on its investment, why shouldn't it cut its losses and do >> > something drastically different? >> > >> > Now I know that you're probably thinking that I've lost it and my >> > editor overlords will finally put me out to pasture, but think about >> > it for a minute: why should a company that overpaid for a service >> > continue to dump significant amounts of cash into it (not to mention >> > spend millions on copyright lawsuits) if it has no chance of creating >> > a valuable revenue stream? >> > >> > Obviously Schmidt is doing all he can to allay shareholder fears over >> > the YouTube debacle, but the very fact that he said anything about it >> > is telling. And to make matters worse, Google's ad revenue on YouTube >> > is so low, it's not even material to the financial statements. In >> > other words, if Google is making anything with YouTube, it doesn't >> > even matter. >> > >> > Let's face it -- the YouTube acquisition was a major blunder and >> > regardless of how successful the company is in other areas, there's >> > no reason to suggest advertisers are willing and ready to place ads >> > on videos of 18-year olds shooting milk out their nose or 80-year old >> > men mooning a parade. >> > >> > As far as I can tell, much of the online advertising money is going >> > to sites like Hulu where the content is controlled, the shows are >> > regulated, and the demographics of the audience are easily obtained. >> > >> > How does YouTube and its content compare? The audience is huge, but >> > it's filled with a diverse set of people who generally view a select >> > few of the more popular videos; the videos are barely regulated; and >> > the content isn't controlled in the least. Why should any advertiser >> > want to send cash to a service like that? >> > >> > Now I understand that Google wants to be a major part of the boom in >> > online video advertising and I can't blame the company for it. But >> > doesn't it understand the average company that's trying to make >> > people want a given product? It's as if Google believes that sheer >> > popularity is the only factor that advertisers use before they start >> > throwing cash around. >> > >> > But what about perception or target audience? Did Google forget about >> > hitting the right market segment or putting ads in the right place at >> > the right time? >> > >> > Now, I should note that this doesn't mean that YouTube won't find >> > itself advertisers. Certainly there are companies that would be more >> > than happy to spend money on YouTube, but what kind exactly? Will >> > YouTube become the dump of advertising where strip clubs and brothels >> > will advertise on sexually-oriented videos and unknown politicians >> > will sell themselves on left- or right-leaning clips? I certainly >> > don't see Johnson and Johnson sending ad dollars to YouTube anytime >> > soon. >> > >> > Lost amid the shuffle, though, is the question of ad dollars itself. >> > How does Google monetize YouTube on videos that you create? Sure, it >> > figured out the online business, but video is a totally different >> > game entirely and without creative control over the content, ads may >> > be found on videos that could leave a bad taste in Google's mouth and >> > yours. >> > >> > Beyond that, YouTube costs Google millions each month and I'm just >> > not sure how long the company really wants to maintain that loss >> > until it follows a new course. >> > >> > Killing YouTube would obviously be the last resort and I think there >> > are a few options Google has before it's forced to pull the plug. But >> > if it can't find a way to regulate some of the content that will host >> > ads and it doesn't attract high-paying advertisers, it's sitting on a >> > billion dollar mistake that keeps draining cash from its coffers with >> > each passing day. >> > >> > YouTube was the greatest blunder Goolge has ever committed and it >> > better act quickly if it wants to turn it around. But if it can't >> > right the ship over the next few years and advertisers start spending >> > more cash elsewhere, YouTube will be nothing but a repository for >> > people to upload crappy videos that have no commercial viability. And >> > for Google, that's unacceptable. >> > >> > Google is trying to run a business that is responsible to >> > shareholders. And while it may have the cash to keep one of the >> > world's most popular sites running now, popularity of a website, in >> > and of itself, should not justify its operation. If the company is >> > losing millions each quarter, I simply don't see why it should keep >> > it up. >> > >> > It may sound ludicrous to shut down such a popular site, but we're >> > entering a new generation of entertainment in the online space and >> > pageviews don't always mean success any longer. Especially if a >> > company is spending millions just trying to keep a website alive. >> > >> > I would love to see YouTube survive, but business is business, and if >> > Google can't turn things around, I simply don't see any other option >> > for Schmidt and company. >> > >> > Heath >> > http://batmangeek.com >> > http://heathparks.com >> > >> > >> >> >> > > -- > Roxanne Darling > "o ke kai" means "of the sea" in hawaiian > Join us at the reef! Mermaid videos, geeks talking, and lots more > http://reef.beachwalks.tv > 808-384-5554 > Video --> http://www.beachwalks.tv > Company -- > http://www.barefeetstudios.com > Twitter--> http://www.twitter.com/roxannedarling > > [Non-text portions of this message have been removed] > > ------------------------------------ Yahoo! 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