Youtube: Giving up on monetizing "The Evolution of Dance"

Clickz broke a great story about changes to youtube. Basically, youtube seems to be throwing in the towel on monetizing their brand of UGC. They’re creating a tabbed ‘ghetto’ for not only amateur videos like “Charlie Bit My Finger“, but also for semi-pro content as well (sorry semi-pro, you’re more semi than pro).

Between closing down the Google Adsense/Youtube units and now creating a monetizable player specifically for professional content, I think Youtube is taking a business plan stand. Their UGC, with billions of eyeballs, is pretty much unmonetizable. UGC (and copywrite infringements…and porn…), with its $470 million of loss for hosting and serving, may be the french fries that bring the search audience to youtube. But it’s the professional content where youtube is now betting to make its money.

Some changes I would expect?
Search results will begin to favor professional content in the results. UGC, which is next to impossible to search productively anyway, will become subordinated to the professional results. If you search for “how to bake a cake” chances are you wouldn’t mind finding a Food TV segment, or Martha Stewart or anyone you know. Of course, you actually get “lfritz73″. And as charming as she is, I have no idea if she makes a good cake. Segregating the two will allow you to find all the copywrited clips you want…all legally if Youtube can get their syndication deals done with the majors.

Copywrite infringing materials will get taken down faster, or through a better process. With revenue at stake now, both youtube and copywrite holders (NBC, ESPN) will want to have their results found on the monetizable, “good” player, not the UGC ghetto tab. Previously, there was no economic incentive to takedown infringing content (and actually incentive to leave it up for the audience those clips attracted). Which leads to….

Professional publishers will be more liberal with what they put up online. If youtube is monetizing the content, and they are counting the eyeballs, and there’s a pretty player….well, voila, that’s kind of TV.

More and more eyeballs to broadband…less and less to the TV box. Watch out Comcast. The repeats and archives are now moving online. You know what’s next.

Adsense cancels youtube video units product

Most of you won’t be affected by this, since it seems very few people were using it. Google Adsense discontinued offering Youtube Video Units as part of their never-ending-search for youtube’s revenue model. As part of the program, Adsense users were able to find a youtube video, attach it to their Google Adsense account, and embed the ad-enabled video into their site. Then, they could sit back and let the Adsense for Video overlay money roll in while they slept. From an email they sent to Adsense account holders last week:

What were the problems? We don’t really know, but let’s assume that Adsense publishers really did embed adsense-enabled youtube videos into their destinations. Here are some guesses as to why Youtube still might not have found success:

1) The ads were unable to correctly discern the context of the video in order to match relevant advertisers. Adsense works because of its unparalleled ability to contextually match an advertiser to related text content. Adsense for Video, however, is dependent on Google’s ability to read the tags and metadata attached to the video. The metadata for Youtube videos are created by the uploaders, which include things like “27309 1/9“. In that specific case, the video has no other metadata other than being in the “People and Blogs” category. Hard to create advertising relevancy with that level of information — even for Google. Therefore, not only could the viewer be negatively affected by irrelevant ads, but that leads to poor performance for the ad units.

2) The videos that people wanted to post don’t lend themselves to advertising. Many viral videos, as we know, are extreme, funny, or extremely funny. Most don’t lead the viewer to think, “Hmm…I would like to know more about a cheap plane ticket to Florida right now.” Even if Google was able to discern the context of the video through proper user-selected titling, tags and metadata, finding a relevant ad on the skateboarding cat is hard to do.

3) The age old problem: Branded advertisers want to know where their ad is showing up — not just on which embedded video, but on which embedding site. Advertisers on youtube video overlays often turn a blind eye to whether the video itself is appropriate content for their brand. If you pay by the click, sometimes you just care about the people who clicked, not the people who didn’t. However, in this program, the advertiser must also extend their ‘blind eye’ to include whether the embedding site is appropriate. If Youtube tries to sell CPM video deals with branded advertisers as opposed to applying only CPC affiliates, then the importance of knowing where the video is being played rises. Branded sponsors have too much at risk to tie themselves to unknown destinations, once they get over being tied to unknown video content.

We like the Google Adsense for Video service that places relevant Adsense overlays on video. For informational video content attached to rich metadata, there is no reason that GAFV shouldn’t be as successful for Google Adsense in generating revenue for video publishers. At Expo, we experience very rich RPM from GAFV and high CTR due to the relevance of the ads to our video content. A Krups coffeemaker video review will display a “Krups at Macys” overlay every time. We wouldn’t be able to do that without Google Adsense, but the bar for user gen video is as high as any other content to properly leverage Adsense’s strengths…metadata, quality and relevance of the content still matter.

UPDATE:  If you’re confused about all these monetization attempts on the part of Youtube, here is a clarifying page Adsense put up to help discern them all

Amazon Video Widget

UPDATE 8/24/09: Amazon kills Video Widget post

Apple Store iPhone debut in New York, video courtesy of our intern Billy

We have a 19 year old intern from UCLA in our company this summer. He is pretty interesting because he’s got some great film making skills already under his belt. In discussing how to get us some great consumer video, he thought up the idea (the night before) to go to the iPhone opening in NYC. He got some great footage, edited it and put it up on the same day. Because he was in a self-professed “good mood” he left out the two “criticisms” that he heard that day about the iPhone (the whole thing about not being able to connect because of the problems Apple was having with their system). He even put together his own music.

His presence in the company is a fun reminder that fearlessness will always be a big part of entrepreneurialism. I hope you enjoy his creativeness to real consumer reviewing the iPhone!