YouTube will take in a reported $200 million in revenue this year, but apparently it’s not enough for them to make a profit (I’d hate to see their bandwidth bill).
It was reported in the Wall Street Journal that YouTube’s current revenue model is such a mess, that Google is drawing up plans to start showing pre-roll videos on YouTube.
If you’re not familiar with the term “pre-roll”, those are the 15-30 second video advertisements that play BEFORE you get to see the video you’re trying watch. I’m not sure how much people will appreciate that when they’re trying to watch their favorite Alicia Keys impersonator sing “No One”.
On the other side of the Atlantic, another popular video sharing site, MetaCafe (headquartered in Israel), has cut it’s staff by 10%. Of course they only had 95 employees and cut 7 positions, but 10% sounds more dramatic. It’s the fact that a couple of the cuts were top management that has garnered the attention.
So what does it all mean? Well, it certainly doesn’t mean that online video popularity is falling (to the contrary, it’s growing by leaps and bounds). But what it may mean, is that user-generated video content has become so matter-of-fact, that it’s no longer a blue chip revenue model.
Or in other words, that quality video content is becoming more and more important. In fact, only 4% of the videos on YouTube actually generate any revenue. Which 4% are these? I’m guessing it’s the rare one’s with quality content.
What’s your opinion on YouTube showing pre-roll ads…and the overall viewer experience found on video sharing sites?
I don’t think that the Pre-roll ads are a problem. They’ve got to pay the bills somehow and 15-30 seconds is worth putting up with if I get the content that I’m looking for. It’s a heck of a lot less time that one would likely spend surfing around the same site or the web looking for that information (assuming of course the subsequent video delivers the goods).
CNET does this all the time and I’m ok with it.
Dave.
I accept watching pre-rolls at quality sites like the BBC where the video content is always good. However, watching pre-rolls at YouTube and then the content of the video that you want to see is sub-standard would be annoying at least.
As you said, it’s the quality that counts.
Hi Dave…
It’ll be interesting just how the punters take seeing adverts… I mean – what if the video is only 10 seconds long? With a 20 second advert in front of it…
It would probably make more sense that an advert be placed in front of videos that have a more viral nature – e.g. once they’ve reached 10,000 views (or something like that) they automatically append an advert in front of the clip.
If it’s too intrusive, I bet people will look elsewhere for video content… But hey – I also bet that they’ll be tracking the stats to the “N”th degree…
That’s my 2 cents worth!
Dave
By the way, YouTube has also inked a deal with TiVo.
Now you’ll be able to watch YouTube videos right on your TV (but do you want to?)! Have to admire Google’s reach though.
Well someone who understands the cat vs dog competition when comes to user-generated videos vs. premium high-qulaity video content. pre-rolls is a must for professional video content. Great and new tv show sites and popular video clip sites like hulu, zoogatv and tidaltv are perfect examples of professional entertainment sites that do well with quality content and branded ads.