YouTube getting serious


Saw on Linked In that Google local heavy Kate Vale has moved roles and is now the head of YouTube in AUNZ.

If you are unaware, Kate was Google’s first employee in Australia (7 years ago) and was the Director of Sales Operations for the company (and possibly still is)

SMH article covering Google 10 year anniversary – http://www.smh.com.au/news/technology/google-10-years-old-and-still-searching/2008/09/07/1220725858555.html

Moving Vale into this role I think shows that YouTube now want to build the revenue of YouTube.

Its been reported the site is losing up to 1.65m USD a day (http://www.internetevolution.com/author.asp?section_id=715&doc_id=175123&) – who knows how true those figures are as Google aren’t commenting on revenue nor costs … but it’s clear YouTube as a standalone entity is bleeding money for Google … who bought the site when it was red hot for $1.6b USD in 2006. That’s not to say it hasn’t provided a helluva lot of value to Google being part of their wider offering – it no doubt has.

It’s a tough gig – very tough … and is going to take a lot of work. Youtube has a few issues that make making money hard.

1/ It is effectively a site full of home videos, copyright infringement and some professional content. Yes there is some unique pro-am content … but not that much and most of it is more about the ‘am’ than the ‘pro’. This limits the ad formats it can run – reading between the lines Google has to be careful to make sure it isn’t technically profiting from copyright infringement by running ads next to content like that. (see this video for an example – no ads – http://www.youtube.com/watch?v=UY04gIruZ4E)

2/ It is a video site that doesn’t run video ads right now. Yes, you can run video within ad units but not before actual video content. Why? Well … the reason is mainly due to copyright. So it’s the number 1 video site but it can’t run video pre-roll ads … so it’s limited to display ads.

3/ Until now it was a difficult buy. I won’t go into detail but there were more than enough hurdles involved in buying YouTube that almost cancelled out any potential benefit. The message to the market is that these have been removed and they are willing to work with advertisers more.

4/ Advertisers are cautious around the space. It’s a bit of a jungle. For evidence of this – see how this Bushfire benefit appeal video turns into an abusive stream of posts (http://www.youtube.com/watch?v=G4ugwfq9Wx8&feature=dir). I can’t see Disney wanting to be next to a video where one user is calling another a “fag” or “fucktard” or worse.

I see value in the space but it needs a lot of work from all angles. Best of luck to Kate.

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2 responses to “YouTube getting serious

  1. Darn tootin YouTube’s getting serious!

    Credit Suisse estimate YouTube will lose $470m this year.

    And there’s a slick promo video by The Google Agency Channel, extolling the virtues of advertising with YouTube.

    I’m sure Hulu is also throwing a spanner in Google’s works to make YouTube the quality video content hub. No pesky controversial comments there. You’re spot on about studio reservations about being associated with the opinions of the world’s fucktards…

  2. B&T just ran an article about Ms. Vale and it seems they wil be offering clients in-video ads…

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