The Napster Effect: YouTube's Last Days
Yes, YouTube has taken far too long to establish a viable business model, which is strange because the only model that they could ever make money with is a display ad-supported one. And yet people are already declaring the website terminal.
Admittedly, YouTube is facing a similar challenge that Napster faced in the late nineties, but it has a whole lot more going for it. Healther user interaction, more people, viral popularity and the potential to sell highly targeted demographics to advertisers. To say nothing of the exponential increase in broadband take up and the rampant popularity of user generated video.
The reason so few people believe advertising will work for the site is the unfiltered nature of the content. There is violent video, copyrighted content, nudity... the list goes on. However, this 'wild west' content is exactly what saw YouTube snatch around forty per cent of all video traffic. If you try to filter it in some way, the users will head straight for whatever video start-up site emerges to fill its place.
The same thing will happen if YouTube attempts to pre-roll its video. Users will leave and advertisers will start making more and more filtering demands. However, I don't see how having a small banner advertisement running underneath an emailed video posing the same problem -in fact, this is probably where YouTube's advertising power will come from. Only the funniest and most engaging advertisements are emailed and if you think logically about it: Emailed videos filter themselves. I tend to only email videos to and from my work address -to my friends work addresses. It is highly unlikely I am going to send them criminal video.
Having done a lot of research on In-Game advertising, it appears that users do not actually negatively associate a branded message with whatever violent or otherwise unseemly content they are interacting with. This makes sense when you think about it: It's not Nike's fault that I decided to shoot up a strip mall in GTA. I am willing to bet that these findings will easily transfer to YouTube. It isn't Dell's fault that I am trawling YouTube looking for video of car crashes.
I have said this before but all we need are some brave brands and some clever marketers willing to reach out to this truly huge and potentially lucrative demographic.
Make no mistake, YouTube's imminent move to monetize its success will be controversial and certainly won't please everybody. They may take a hit in their visitor numbers in the short term, but if it is managed properly this will be temporary.
Don't write them off yet. Unlike Napster, they have been compliant in handling copyright infringement and they haven't sold out at the first sniff of success. The cynic in me says this is all a moot point because someone in Big Media will ultimately by them for an absurd sum.
Admittedly, YouTube is facing a similar challenge that Napster faced in the late nineties, but it has a whole lot more going for it. Healther user interaction, more people, viral popularity and the potential to sell highly targeted demographics to advertisers. To say nothing of the exponential increase in broadband take up and the rampant popularity of user generated video.
The reason so few people believe advertising will work for the site is the unfiltered nature of the content. There is violent video, copyrighted content, nudity... the list goes on. However, this 'wild west' content is exactly what saw YouTube snatch around forty per cent of all video traffic. If you try to filter it in some way, the users will head straight for whatever video start-up site emerges to fill its place.
The same thing will happen if YouTube attempts to pre-roll its video. Users will leave and advertisers will start making more and more filtering demands. However, I don't see how having a small banner advertisement running underneath an emailed video posing the same problem -in fact, this is probably where YouTube's advertising power will come from. Only the funniest and most engaging advertisements are emailed and if you think logically about it: Emailed videos filter themselves. I tend to only email videos to and from my work address -to my friends work addresses. It is highly unlikely I am going to send them criminal video.
Having done a lot of research on In-Game advertising, it appears that users do not actually negatively associate a branded message with whatever violent or otherwise unseemly content they are interacting with. This makes sense when you think about it: It's not Nike's fault that I decided to shoot up a strip mall in GTA. I am willing to bet that these findings will easily transfer to YouTube. It isn't Dell's fault that I am trawling YouTube looking for video of car crashes.
I have said this before but all we need are some brave brands and some clever marketers willing to reach out to this truly huge and potentially lucrative demographic.
Make no mistake, YouTube's imminent move to monetize its success will be controversial and certainly won't please everybody. They may take a hit in their visitor numbers in the short term, but if it is managed properly this will be temporary.
Don't write them off yet. Unlike Napster, they have been compliant in handling copyright infringement and they haven't sold out at the first sniff of success. The cynic in me says this is all a moot point because someone in Big Media will ultimately by them for an absurd sum.
posted by Gordon White at 11:02 am
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