Wednesday, September 13, 2006

YouTube's Catch-22

YouTube has billions (slight exaggeration) of users, but not much ad revenue. The company's primary conundrum -- much of the most popular content is copyrighted material that is pirated, so advertisers won't spend money to support it.

What's a fledgling company to do?

How about this - go to the media giants with hat in hand and offer to cut a deal. They will work together in recording the best clips from TV shows and share the revenue.

The reality is that with DVRs and easy video uploads, every time someone screws up on camera (see Rick Sutcliffe, George Allen, Bert Blyleven, etc), Jon Stewart rips someone a new one, or Jimmy Kimmel tosses out a great line, it will be put online.

So, the media companies can sell advertising against their "best of" content, or continue to allow pirated versions to be run on YouTube and no one makes money.

NBC gets it, to a degree Today they decided to do the "NBBC" venture that will include full episodes plus clips from its affiliate stations. They may not put the funniest live mishaps online, but it's a start.

The music industry was in denial about media sharing online for years, and see where it got them?

Posted By John Gartner at 02:07 PM
Permanent Link: YouTube's Catch-22 | Comments (1)

(1) Comments on YouTube's Catch-22

They are trying to cut deals as of now with a number of media companies.

I think the problem they're having is that while the owners are trying to keep their users happy by now interfering with their experience too much, they are also dealing from a weakening hand as time goes on.

With running between estimates of $500,000 to $1,500,000 monthly on bandwidth alone, there has to be a pressure on them to start producing some revenue streams.

They are trying to be too perfect I think. They understand their demographic, they should roll out a few things on a smaller scale to see how their users react. If they wait too long, the traditional media companies will gain the upper hand.

They are already starting to go that way with recent threatenings concerning copyright issues.

Comments by Gary Bourgeault (bizofshowbiz.com) : Thursday, September 14, 2006 at 02:11 AM

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