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Google Still Unsure How To Make Money With YouTube

   
4:37 pm on Jun 12, 2008 (gmt 0)

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Eric Schmidt, the search giant's chief executive, said it "seemed obvious" that Google should be able to generate "significant amounts of money" from YouTube, on which hundreds of millions of videos are watched every day, but that as yet it hadn't figured out how to go about it.

In an interview with The New Yorker writer Ken Auletta, Mr Schmidt was cautious about how profitable YouTube might be, but said he believed the site could lead to "the creation of a whole new industry." He said his optimism was based on two facts: "We know people are watching it" and "We have the luxury of time to invest."

Google Still Unsure How To Make Money With YouTube [technology.timesonline.co.uk]
2:14 pm on Jun 13, 2008 (gmt 0)

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Well, and then there is that tiny battle with Viacom. Should Viacom win, I guess the potential to see (at least) a black zero from Youtube any time soon is pretty much gone.
10:53 pm on Jun 14, 2008 (gmt 0)

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said he believed the site could lead to "the creation of a whole new industry." He said his optimism was based on two facts: "We know people are watching it" and "We have the luxury of time to invest."

Very true.
11:06 pm on Jun 14, 2008 (gmt 0)

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The last time I heard someone say it could "create a new industry" was when one of our company connections was really hoping someone would take the "thing" off their hands...new industry indeed!
11:07 pm on Jun 14, 2008 (gmt 0)

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Thanks for this post. I have a meeting Monday with a webmaster who has a useful web service, but very little income and is feeling foolish. I can use this to show him he is in good company.

That said, when I was a young man I set up a photo filing system for my employer.

It sank in slowly as people tried to use my system that people see pictures differently. Numbers are easy, text can be handled often, but filing pictures where people can find them (and put ads on them) is tough.

My advice would be to find a major sponsor for the overall service at first. "YouTube Wednesday, brought to you by Pepsi!" (Music, video, la la la...) See Super Bowl for other ideas.

2:08 am on Jun 15, 2008 (gmt 0)

WebmasterWorld Senior Member billys is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Eric Schmidt, the search giant's chief executive, said it "seemed obvious" that Google should be able to generate "significant amounts of money" from YouTube, on which hundreds of millions of videos are watched every day, but that as yet it hadn't figured out how to go about it.

I wonder whom it seemed obvious to... I would have thought it would be difficult.

I guess some of us were right when we thought Google Defending YouTube Purchase [webmasterworld.com] was silly...

Oh yea, the quote back then was...

Google Chairman and CEO Eric Schmidt said Tuesday that it will take time for the company's recently acquired YouTube online video-sharing service to become a major source of sales and profits for the company.

[edited by: BillyS at 2:09 am (utc) on June 15, 2008]

2:10 am on Jun 15, 2008 (gmt 0)

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Actually, I do know how Google can make some money from YouTube - sell it to Yahoo...
2:27 am on Jun 15, 2008 (gmt 0)

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It seems obvious to me... Every third video you watch has a 15 second video ad in front of it. MSN do it.
9:30 am on Jun 15, 2008 (gmt 0)

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I don't even believe they should make money out of it at the moment, till they sort out the copyright lawsuits.
12:20 pm on Jun 15, 2008 (gmt 0)

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Brand awareness - that's all it will ever be in real terms... not a bad vehicle either.

However, in G's world they may find this a bit of a struggle.

See you need to have Account Manager, Brand managers, traffic people, planners and more... ie read a Digital Media Agency.

G can't even manage Adwords customer services for their biggest clients ... so this could be a tough nut to crack.

They will need to buy a media business like Media 24/7 or how about WPP.... then they can have everythgin in-house and start to make money on YT - but all that takes serious money and serious commitment - does G want to do that?

3:17 pm on Jun 15, 2008 (gmt 0)

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It seems obvious to me... Every third video you watch has a 15 second video ad in front of it. MSN do it.

And they would loose half if not more of their supporters in an eye-blink in the process.
3:34 pm on Jun 15, 2008 (gmt 0)

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I knew that they are not making money through it. And Adsense would not be a good solution since the content sucks, it really is an entertainment portal.

My opinions is, you can offer adwords advertisers a cpm model that will work on youtube based on channel and descriptions. Similar to their tv ad model ads will be displayed at the beginning of each video.

Just my 2 cents.

7:39 pm on Jun 15, 2008 (gmt 0)

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I think this is one thing they should not monetise through ads. Maybe they could act as the streaming media expert for the movie companies. People could pay to stream high res movies, see exclusive content etc.

There would still be a free service, but some longer and higher res movies would only be available to subscribers. I think they could have an annual charge for as much as you can watch. They could also charge the content providers for bandwidth, promotion (ie charge to be a featured video) etc.

8:16 pm on Jun 15, 2008 (gmt 0)

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Maybe they can do what Flickr's doing?

Charge users say, $29.95/year IF they want to unlock High Definition web viewing. I'm talking Apple.com trailer video quality...

It's working wonders for iTunes ($1 per song).

Every motion picture movie would be released next day straight from dvd -> youtube.

I doubt youtube can really make them any more money, the traffic they get just wants to see funny, interesting content. They're not clicking on ads, they want to see funny videos, watch music, etc. The only way they can extract dollars from these viewers imo, is to give them a better viewing experience. So thus, youtube is no longer a ad revenue platform, but a cable/video hire network.

They could supply HD content for the world. New movie releases, music videos, adult vids, etc.

2:49 am on Jun 16, 2008 (gmt 0)

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Google should make YouTube a platform for showcasing all kinds of movies. To make make money, Google should pose itself as a director, while all users actrors.
The current situation makes YouTube a non-goverenment community. It's not well administered. Can you see any "Google Factor" on YouTube so far?
6:13 am on Jun 16, 2008 (gmt 0)



>> It seems obvious to me... Every third video you watch has a 15 second video ad in front of it. MSN do it.

If you aren't making money content owners (think of the background music on your youtube video as a start) are usually more lenient. However...

12:12 pm on Jun 16, 2008 (gmt 0)

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The major problem with YouTube for Google is YouTube will forever be ahead of the corporate culture and if it ISN'T then it will fall to the wayside. That is if youtube doesn't stay an early adopter and free spirit in all ways shape or forms then someone will come in and replace it. The major catch is just how much infrastructure is needed to keep it running and modernize it. With HD this and HD that the crappy old webcam erra will be gone before we know it and bandwidth and storage will infinitely increase.

I say its going to take another acquisition or a competitor to kick googles gears into monetizing it.

Adsense on there is about as worthless as you can get unless you're simply trying to brand something in which case i'm not sure you're better off doing ads when you could be making a free video. (missing the point of youtube - the irony of it all)

3:19 pm on Jun 16, 2008 (gmt 0)

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youtube and google are both developments giving away sophisticated services for free to endusers.

That`s how they succeed.

In the search market they have crap competition, in media they will have to mature into a real media company to remain competitive. Only providing upload services will not be enough.

5:35 pm on Jun 16, 2008 (gmt 0)

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Why is it so hard to have a 2 second 'sponsored by' image/animation before every video? Long enough to see the brand but not so long that it gets annoying. Done. I'm now smarter than Google, woot.
9:40 pm on Jun 16, 2008 (gmt 0)

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Why is it so hard to have a...

Because Google/Youtube KNOWS that most of these impressions are made on copyright protected content, not on some shaky video done by a teenager with a mobile phone. One of the prerequisites for being protected by the DMCA (which actually backs the whole Youtube service) is that NO direct financial benefit is being created by the infringing activity. THAT makes it so hard for Youtube to earn ANY money off copyright protected content. THAT's why we are seeing no pre-roll/post-roll/in-roll advertisement. It's not a technology issue; it's an IP law issue.

9:57 pm on Jun 16, 2008 (gmt 0)

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Napster was to audio what YouTube is to video. Napster got in lots of trouble for pirated audio just as YouTube does for pirated video.

AdSense ads are not the solution. The way to monetize YouTube, if there is one, is to follow the path of Napster. (New version.)

Google's problem with YouTube is it had no idea how to make money with it before or when it bought the site. Google had never monetized anything like YT before and had no basis to believe it could. Total pipe dream, excuse the pun.

Eric Schmidt, even today, sounds like a 1999 internet businessman. He's talking about eyeballs = money. That's so pre-dot-com bust.

The simple fact is there are very few ways to monetize YT. It's either ads and/or subscriptions. Ads aren't going to work (they've already tried); that leaves subscriptions.

p/g

P.S. I'm not optimistic about the future of video online. If I want movies, I got cable. If I want news clips, I got cable. I don't pay attention to video ads online (more annoying that image ads).

12:53 am on Jun 17, 2008 (gmt 0)

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MySpace is the YouTube of audio. Napster is more like The Pirate Bay of audio.
11:16 am on Jun 17, 2008 (gmt 0)

WebmasterWorld Senior Member beedeedubbleu is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Maybe they should just admit defeat and kill it?

[news.cnet.com...]

8:33 pm on Jun 17, 2008 (gmt 0)



Why is it so hard to have a 2 second 'sponsored by' image/animation before every video?

Do you actually like commercials? The reason Universal Tube (UTube) is so popular is that its not commercialized. The minute it becomes a commercial a new grassroots site springs up and everyone goes there.

5:44 am on Jun 18, 2008 (gmt 0)

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zett,

good points that you raise.

If G wants to earn anything with youtube they have to play the rules of media. Shaky freakstuff will never attract top advertising dollars and G has to invest into proper content production like everyone else.

Also the design department does not seem to be competitive at all with no real further developments in comparison to other sites.

Media is not that easy to challenge as Yahoo and MS.

2:55 pm on Jun 18, 2008 (gmt 0)

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They could compete with and kick NetFlix' ass, and Google has the server power to do it; they need only the bandwidth. Anyone for Google investing in ISPs to help the infrastructure and shut them up? I'm more for it than the nebuad crap going on.
4:39 am on Jun 20, 2008 (gmt 0)

WebmasterWorld Senior Member quadrille is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Maybe they should just admit defeat and kill it? - Don Reisinger

Youtube is not only one amazing site, it is also a very powerful brand.

And, while they may not yet be making huge profits, I suspect the losses are not too great either (by G standards). They have time and to spare.

Is Don Reisinger always totally bananas, or is this a new development? I've not read such a sad analysis for many a month.

[edited by: Quadrille at 4:42 am (utc) on June 20, 2008]

 

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