Last week, when rumors broke that YouTube might finally become profitable, most of the response was actually pretty snarky.
As an example, take the initial post at Slashdot – it suggested that it was about time that YouTube was making some money. If anything, YouTube’s success – which certainly has been a long time coming – seemed like something that was well overdue.
But another take on YouTube’s slow, steady move into profitability is a bit different. Instead of snarky, it is optimistic.
Why? Well, first is that maybe it had to take this long to create a viable online business model for video; and second is that, though YouTube’s model meant profitability was a long time coming, that it has now proven to work means it is in fact a model and a beacon of hope of for other online businesses going forward.
The Online Conundrum: How The H@&# Do You Make Money?
This is the problem for online media businesses, is it not? As we exist in this weird historical moment of transition from the pre-web era to the future, even the world’s best minds are struggling to figure out how to produce profit online. You might have heard one or two stories about ‘the future of newspapers‘ or the ‘future of the TV biz’. Or, ya’ know, nine thousand of them. Whatever. So why is there so much discussion? Well, very roughly:- Attention has become scattered – not because of ADD, but because of how the web works. If you magazine had 300,000 subscribers before, those same people might still read 1 or 2 pieces from your rag – but also 10 or 20 others from 10 or 20 other sites. The web massively expanded what individuals have access to, fragmenting the amount of attention paid to individual entities.
- Advertising online is… well, hm, how do I put this delicately? Oh, right: it blows. Flashing text that says “Click here for a discount”! Brilliant! More seriously though, no-one has cracked the code to up user engagement in light of the fragmentation of attention, or which type of ad actually works. Online ads are an enigma wrapped in a puzzle – that are then put into a really annoying Flash container that eats up CPU cycles.
- People don’t want to pay for things – not so much because they’re cheap, but because there’s so much free stuff available. Album purchases have been impacted by streaming and torrenting. But it’s not just ‘entitlement’; it’s a cultural change.
- But most important of all? Content owners cannot control what happens to their content once it goes online. It gets re-purposed. It gets remixed. It gets mashed up. Hell, sometimes, it just gets stolen. If one or two people do it in an obvious manner, it’s easy to contain. If 200,000 people do it, it’s a touch more tricky.
Interesting post, I like “when you can’t beat them, join them”. I was hesitant when I first signed up for my youtube account the 1st year it came out. I thought YouTube was going to use the content of others for their own profit and now years down the line as said in this article YouTube has figured out how to make money and SHARE the profit with content owners and creators.
That was a good read. thanks for the post. pity about the JB film clip choice. I’m going to have the song stuck in my head for the rest of the day, but great post.
Good article! The videos are a test. There’s no reason to click on any of them, unless you want to get rick-rolled. Or in this case, Bieber-rolled!
nice post, especially reading about how online advertising is naff and out of the corner of my eye a really irritating flashing banner telling me about “free cursors”. Well done youtube!