So, it looks like network TV programming is finding a secure home online. According to stats from eMarketer, 154 million people in the U.S. will download or stream such video content on the Web at least once a month this year. And 80 percent of Web users should watch videos online, a number which accounts for a staggering 52.5 percent of the larger U.S. population. In my view, this is just one more indication that professionally-produced content has a big advantage online…which I’ll explain more below.
OK, I’ll admit that the numbers cite above don’t exactly spell the death of YouTube, which draws about 68.5 million unique visitors and 3.7 billion page views per month. But when it comes to making money online, the commercially-created content has a tremendous advantage over YouTube’s amateur stuff. And that makes me wonder what’s going to happen to YouTube’s business model as consumers get sick of stupid teenage tricks, cute kids, lousy bands, boring pets and the like. (Hey, America’s Funniest Home Videos didn’t stay on the air forever either, right?)
What’s going on underneath the surface is that it’s getting increasingly unclear how to monetize junky amateur videos.
As a matter of policy, YouTube doesn’t run any ads along with videos submitted by regular users, because they don’t know enough about the clips’ content–and don’t know if the clips contain copyright-infringing material. It only runs ads against professional content from its commercial partners, such as the NBA, CBS and Universal Music. That leaves tons of content they have to deliver (a huge bandwidth hit even for Google (GOOG)) but can’t really monetize effectively.
TV networks, however, have complete control of their Web content from day one, which has to make it much easier to use te content for advertising sales. In fact, one marketing exec recently told me that a cable network client of his was spending big bucks analyzing how much they spend to deliver each program viewed online, so they have accurate means for pricing ad spots against them, not to mention the demographics of viewers, the paths that bring viewers to look at a program and so on. What’s more, they can then turn and take these stats (and advertising response) and use it to boost the performance of their traditional TV programming. Sweet all around.
I guess the underlying question that comes up for me, here, is whether YouTube will ultimately stop looking like a consumer site at all–or whether consumer content will be shunted off into some other brand. Tricky stuff.