That's me - broad brush man. Jack of all trades, master of none. I take your point, that it's horses for courses, but I still don't understand the long term future of advertising for on-demand video. It's just not happening on anything like the scale of traditional advertising, or even other online advertising. Surely it's different from text - not least in advertisers' ability to keep track of what content they're being connected to and the costs of providing it? And I don't understand
> ads don't work with ephemeral content. Surely that's exactly where they do work? Most of the media we consume is ephemeral - TV, newspapers, online news, we see adverts alongside those things as they stream into our lives. On-demand video is largely different from that, isn't it? it's short and self- contained and chosen individually and unlike TV and news, it's not time-sensitive - it's actually less ephemeral. But most of it - 97% apparently - is unmonetizable with advertising, because individual videos' viewing figures are too low - and maybe it's all too fragmented and uncategorizable, and perhaps advertisers are not prepared to see their adverts up against every little home video and copyright-infringing clip. Even if those things eventually collectively gather millions of views and last for a lot longer than most ephemeral advertising-funded media. According to Credit Suisse, YouTube seems to be making $50-100m from ads in videos, adjacent banners and sponsored videos. That's as good as they can do all year, and they have 40% of the total online video market worldwide, at a time when online video is booming? Sure, online viewership is tiny compared to TV, but the gap between TV and online video advertising seems to be disproportionately large. Especially when you'd imagine that online video would provide greater opportunities for more targeted "addressable" advertising, supposedly the holy grail. But the TV ad industry in the US alone is worth $80 billion, 60% of total advertising spend. Superbowl ads this year earned NBC over $200m - that alone is perhaps between 2 and 4 times as much as Google's making all year from YouTube video ads. Is online video really that unattractive to advertisers? How is that going to change? It seems to me that at the moment, short on-demand online videos are more attractive to the viewers than the advertisers, and therefore that viewers are likely to pay more for them directly than advertisers would. At the moment, they don't have to make the choice, because 40% of the market is being subsidized by Google at a cost of $500m. No other business could sustain that kind of loss. That's what I mean about it distorting the market. And if that subsidy disappeared tomorrow, surely something would have to pay for the huge costs of bandwidth and content in delivering all this video to people? Will that be advertising? Or pay per view? Judging by the stats so far, my money would be on pay per view, not advertising. But again, that's just a broad personal impression from very little knowledge or experience. I am just a layman. Rupert On 8-Apr-09, at 4:30 PM, J. Rhett Aultman wrote: > > > I think you're painting online video with an incredibly wide brush > here, > and it's pretty distortionary. These questions were once asked about > text > online, too, and the answer is that any of a number of business models > have arisen. Content that has been worth money and isn't value-added > through linking, such as books and academic journals, has successfully > followed system of paying for titles/editions/subscriptions. Some > text is > most value-added when it can be linked...like news. That's followed > some > flavor of ad-supported. The overwhelming majority of text on the web > is > not seen as worth buying and/or is so ephemeral that its only value > is in > being linked to for a short period of time. It's remained "free", in > the > sense that its authors tend to absorb costs for keeping it online. > > Video will be the same way. If YouTube is losing money, it doesn't > mean > that the advertising model is dead. What it means is something already > known-- ads don't work with ephemeral content. > > -- > Rhett. > http://www.weatherlight.com > [Non-text portions of this message have been removed]
