Wednesday, October 10, 2012

Why YouTube Is Changing Its Business Model

It seems that YouTube has, after all, become 'just' another broadcaster. This week they announced $200m in spending on original programming for their channels.

I have yet to come across a channel operator that is covering its costs via YouTube alone without being paid for commissioned content, so it seems that the dream of a self-supporting video ecosystem based on the long tail has, essentially, failed.

Or rather, Google has failed with this model thanks to its lack of application: it keeps on clinging on to its 'clicks are where the money is' philosophy when television advertising works better the less viewers click.

Short form certainly has its fans and viewers, but, again, these are fickle viewers who won't hang around for the advertising.

And video advertising online is still a joke. When I watch mainstream channels from the UK such as ITV.com and 4OD the ads just stutter endlessly (the programmes are fine). Meanwhile the ads are all in Flash format, when the online video world moved onto HTML5 years ago (90% of all TVE's video delivery is to HTML5 players now), but even Google's own AdX video exchange doesn't support HTML5.

YouTube has been the 'victim' of the wrong business models badly applied and is still the victim of bad technology decisions and, dare I say, an over-ambition.

Finally, it has found that the only way it can obtain legal, quality content is to pay for it. Just like broadcast TV has always done. Welcome to the real world!