Three Second Pre-Rolls On YouTube?

I went through a period where I wrote about YouTube a lot. It was fascinating to me to watch web video take off and the lessons we all learned from YouTube’s success were important. After YouTube was purchased by Google, I kind of lost interest. I felt like that story had played out to its logical conclusion and it was time to look elsewhere for lessons to learn.

But I am taken back to YouTube after watching this video of Chad Hurley that Jeff Jarvis took at Davos and posted on YouTube (of course).

What Chad it talking about it a monetization system for YouTube, which apparently will include three second pre-rolls. More on that later. Chad first talks about digital fingerprinting which is similar to the technology that Snocap uses and how it can be used to let content owners to "claim" their content. And when that content is used in a mashup, they can share in the revenue. That’s exactly how this emerging model of content creation/consumption should work.

But of course, there needs to be revenue to share with the content owners and the content creators (the people creating stuff on YouTube). And that’s where the monetization system comes in. To date, YouTube has relied on banners to provide revenue.

But it appears that they are going to offer video ads directly in the player. That’s what most traditional media companies have been doing, mostly via pre-rolls. Pre-rolls are a questionable monetization system for YouTube like web video. But keeping them to three seconds is certainly an interesting idea. It’s hard to object to three seconds. But the question is how much is an advertiser going to pay for a three second insertion?

Anyway, I like the way that YouTube waited for the community and service to develop before locking into a monetization and compensation system. To date, they’ve showed a good feel for what will work in this emerging medium. We will soon see if they have a similar feel for how to monetize and compensate everyone in the ecosystem. As always, I am rooting for them.

#VC & Technology