Comment of the Day

Erik wrote this in response to my YouTube post yesterday morning linking to John Battelle’s post:

The copyright stuff is an issue, but I think the big issue is revenue.

I suspect pre-roll and post-roll ads are a non-starter as far as the audience is concerned. Therefore you need video ads that users WANT to watch. Ads that users will voluntarily initiate.

Now on the YouTube site proper that’s do-able (although requires more clever ads than repurposed TV ads). You can do collaborative filtering and associate advertising vingettes with user contributed content. Eventually it will be difficult to tell the ads from the content (if YT and advertisers both execute).

The real challenge is how do they make money letting third parties embed content in their own sites with YT paying the bandwidth bill. Is 3rd party embedded content just a marketing expense?

What percentage of YT content is consumed on the YT site and what percentage is embedded in other pages?

I like the idea of advertisers uploading their ads to YouTube and making them interesting enough that people will voluntarily watch them. I found a number of the “I’m A Mac” ads on YouTube but I doubt that Apple uploaded them and there are quite a few spoofs. Great stuff.

In this model, do advertisers pay YouTube a cost per play? And will that be enough to fund the rest of the service?

#VC & Technology