>> ads don't work with ephemeral content. > > Surely that's exactly where they do work? Most of the media we > consume is ephemeral - TV, newspapers, online news, we see adverts > alongside those things as they stream into our lives. On-demand > video is largely different from that, isn't it? it's short and self- > contained and chosen individually and unlike TV and news, it's not > time-sensitive - it's actually less ephemeral.
No; it's actually more ephemeral when you consider it from a position of total impact. The overwhelming majority of YouTube videos reach tiny numbers of viewers who consume it once. This bears no comparison to, say, TV or newspapers, which reach much larger audiences. It also bears no comparison to media where there are smaller audiences that accept repeat exposure. Such media are ripe for targeted product placement. But most YouTube videos simply don't make good raw material for an ad. The audience is small and not defined, the video will be seen once per viewer (who may not even make it the majority of the way through), the producer isn't available to exploit their relationship with the viewer to endorse things...it's basically an advertising void. > But most of it - 97% apparently - is unmonetizable with advertising, > because individual videos' viewing figures are too low - and maybe > it's all too fragmented and uncategorizable, and perhaps advertisers > are not prepared to see their adverts up against every little home > video and copyright-infringing clip. Even if those things eventually > collectively gather millions of views and last for a lot longer than > most ephemeral advertising-funded media. Again, consider "ephemeral" from a standpoint of overall cultural staying power, and not just from how long something is on a screen once, and you'll see that the YouTube videos are culturally ephemeral. You actually touch on that issue in your above paragraph. > According to Credit Suisse, YouTube seems to be making $50-100m from > ads in videos, adjacent banners and sponsored videos. That's as good > as they can do all year, and they have 40% of the total online video > market worldwide, at a time when online video is booming? Right, and this is because they're monetizing wrong. Let's say that 40% of the car market, in terms of cars on the road, was GM's, and GM was found to be losing money badly. In reality, it's because GM loses $1 per car they sell because they do everything wrong. Is it valid to ask if cars as we know them will be viable? No. It's not that cars aren't viable. It's that GM is doing it wrong. > Sure, online viewership is tiny compared to TV, but the gap between TV > and online video advertising seems to be disproportionately large. This could have everything to do with a casual numbers game not showing the real details. > Especially when you'd imagine that online video would provide greater > opportunities for more targeted "addressable" advertising, supposedly > the holy grail. Imagination isn't reality, though, and presupposition gets you nowhere. If YouTube isn't doing this sufficiently, then they're losing money. > But the TV ad industry in the US alone is worth $80 billion, 60% of > total advertising spend. Superbowl ads this year earned NBC over > $200m - that alone is perhaps between 2 and 4 times as much as > Google's making all year from YouTube video ads. Of course, it's distorting to use the SuperBowl in a good comparison here, because it's well known that the SuperBowl is basically tulip season for advertisers. People spend on those ads because they exist. It's similar to how city after city hosts an Olympic Games but never profits on the venture. That said, I understand where you're trying to go with this, but you keep treating this as a problem with online video when, in fact, it's a problem with YouTube. Your assumption is that, if YouTube can't do it, nobody can. That itself only makes sense if you can prove that the only people capable of doing it are YouTube and what supporting engineers Google gives them. > Is online video really that unattractive to advertisers? How is that > going to change? It seems to me that at the moment, short on-demand > online videos are more attractive to the viewers than the advertisers, > and therefore that viewers are likely to pay more for them directly > than advertisers would. Again, it's not about online video. It's about different classes of video requiring different monetization processes. A huge class of online video, which I'd estimate as the overwhelming majority of YouTube videos, is completely worthless at making money. As for why micropayments won't work, I'll defer that to Clay Shirky, who said it far better than I ever could: http://www.shirky.com/writings/fame_vs_fortune.html > At the moment, they don't have to make the choice, because 40% of the > market is being subsidized by Google at a cost of $500m. No other > business could sustain that kind of loss. That's what I mean about it > distorting the market. And if that subsidy disappeared tomorrow, > surely something would have to pay for the huge costs of bandwidth and > content in delivering all this video to people? Will that be > advertising? Or pay per view? Judging by the stats so far, my money > would be on pay per view, not advertising. My money would be on an option that you don't seem to consider-- that YouTube would just end, and that people interested in delivering online video would have to pay their own hosting. The end result will be that we will still have the artists, producers, video bloggers, etc, but what we'll lose is the endless archives of cellphone videos of someone's drunk friend falling down or of some random person in London getting stoned and lecturing everyone on history...then getting all the facts wrong. > But again, that's just a broad personal impression from very little > knowledge or experience. I am just a layman. I'm just a layman, too, but I just trying to impress on you that there may be more options out there than the handful you're bringing to the table. To wit: * Online video can sometimes be monetized and sometimes not, just like online text. * YouTube has a model that doesn't maximize money over time. * If Google doesn't want YouTube to be a loss leader, a possible outcome is that YouTube will end but that online video, as a medium, will survive. Plenty of good video already survives without YouTube. In fact, some of the best and most ready-to-monetize content isn't on YouTube. -- Rhett. http://www.weatherlight.com
