Online TV: Future? What future??

[Former Member 1]

YouTube’s popularity has gone viral since it started in February 2005, with millions of viewers visiting and watching every day.

According to Nielsen Online, YouTube was the fifth-most-popular Web brand in the US. Credit Suisse estimated that over 40% of all U.S. online video streams went via YouTube in 2009 with around 375 million viewers worldwide. Phenomenal figures; but do they equate to phenomenal revenues and, most importantly, a sustainable business model?

YouTube’s revenues were estimated by leading media analysts as follows:

• Jefferies & Co., 2009: $500 million
• Bear Stearns, 2008: $90 million
• Screen Digest, 2009: $120 million
• Forbes, 2009: $350 million
• Morgan Stanley, 2008: $75 million to $189 million
• Credit Suisse, 2009: $240 million

Woop De do! Except Credit Suisse tell us that projected bandwidth costs, content licensing, technical costs etc probably exceeded $700 million in 2009.

The spark of genius that created YouTube realised its full potential less than two years after the company was formed when Google paid $1.6Bn for it. Since then its haemorrhaged money like an gaping artery. The consensus view of many industry experts is that for YouTube to remain viable it needs to increase the percentage of its videos that can be monetised. That means driving more advertiser demand, improved ad effectiveness and reduced ad intrusiveness.

Monetisation is possibly the biggest problem facing online video companies at this moment, and YouTube, the daddy o ‘em all, is no different! Until the business model supports the ideal, then Web video can never reach its true potential.

It’s within the content that the key monetisation lies... In layman’s terms, that means fewer sneezing pandas and more slick production; content, in other words, that people will invest in!

You get nowt’ for owt’ in this world. And those who are considering the use of online video need to realise it’s a serious medium they need to engage with on a professional level. The truth is the ‘something for nothing’ culture was always based on a simple lie, is unrealistic and ultimately unsustainable.

YouTube aren’t the villains of the piece here... They cut fresh ground and are to be admired for that. They are what they are and for the moment perform an important role and provide a good service.

Expect to have to pay YouTube and every other legitimate video host for hosting your business videos in the future though...

Beware of so-called ‘free’ imitators that, one way or another, acquire control over the content they host for you... The value of ANY media based company is in the intellectual property it controls. And that's especially true where IP relating to your business is concerned...

Could you imagine the implications if it emerged (for instance) that "The Beatles" first album had been recorded for free by some obscure backstreet studio that still actually owned the rights??? Or if the first "Harry Potter" book had been acquired by one of those 'free' print-on-demand publishers before Bloomsbury picked it up?

Or if some obscure free hosting company from 1995 were to suddenly emerge claiming rights to the 'E-bay' logo... :001_unsure:

Remember; to get a return on investment you actually have to make an investment!

Video generally, and online video in particular is an amazingly powerful medium for making your point. But as with any form of promotional tool there are pitfalls...

 

[Adventurelife]

I agree and disagree Matt. With most online video hosts I agree they need to make £ at some point or they will fade to dust. With youtube though all is not as it seems. Yes as a stand alone they are not viable but with the might of google behind them they are.

Youtube is now the 2nd most search search engine on the web, no way are google going to do anything that drives that backward as they get to plaster youtube with PPC adds

Youtube may be a company that never ever makes any money but with a parent that supports it because the parent makes more money indirectly. This combined with the fact that hosting costs and bandwidth costs fall year on year the cost base relative to the user base is falling rapidly

I have recently moved a lot of our video content onto amazon servers as small providers just cannot compete with the reliability/cost mix I have unlimited hosting of as much video and photography as we like for under $200 a year.

The whole google model is to produce as many free tools as possible to get the net user base to be interacting with google on a daily basis and they will and do make more money because of that because of PPC.

The main weakness in google's business model is that it is totally based on PPC and the web being the web someone may come along with something that is better. The other threat they have is the relevance of real time search engines such as twitter/facebook and others, as more and more people are using real time search they are losing potential customers

In summary I would be very shocked to see google start charging for youtube as it does not makes sense for them to do so.