Google (NASDAQ: GOOG) continues to search for the Holy Grail: how best to monetize YouTube. It's no easy task. And everyone is paying attention. Microsoft (NASDAQ: MSFT), Yahoo! (NASDAQ: YHOO), Time Warner (NYSE: TWX), Disney (NYSE: DIS), News Corp. (NYSE: NWS) -- all the major Internet and media companies want to find the best model to use in terms of extracting value from content distributed over the web.
According to TechCrucnch, Google is experimenting with placing a value on YouTube downloads. For about a dollar, customers could download certain content from the social-networking site through Google Checkout. Offering the ability to download a clip instead of always having to stream it should be appealing to consumers, and as Google needs to get serious about monetizing YouTube, and this could be a step in the right direction. That doesn't mean it's guaranteed to be accepted with open arms, though.
I think this is a great test, but I also have my reservations about whether or not it would ever be accepted on a critical-mass basis. Imagine having to pay a dollar for every piece of content that you wanted on YouTube? That would add up pretty fast. A much lower price point might be worth trying out at some juncture. Plus, by initiating a charge-per-download scheme, media companies would have the opportunity to try out all kinds of products. Would you be willing, for instance, to pay a dollar to watch the first ten minutes of a movie that is set to hit the multiplex several months from now? Would you be willing to pay a dollar for an exclusive behind-the-scenes segment? Of course, working with major media companies in paid YouTube downloads is probably far into the future, as VentureBeat points out.
No matter what, Google has to step up its efforts when it comes to generating money from YouTube. It has to get over its reluctance to alienate users. Management needs to remember that YouTube is a very easy platform to use and that it has a ton of brand equity with surfers. Users should be willing to pay for the right content. Now, not every bit of content will be accepting of a price: no one is going to pay for goofy 30-second clips of people doing stupid things. But that doesn't mean that the eyeballs can't sit through a few ads every now and then to help fund the experience. If Google doesn't aggressively attack this problem, then YouTube will turn out to be one mighty big financial albatross. In fact, see Sheldon Liber's comments on this subject.
Apple (NASDAQ: AAPL) figured out a way to monetize music on a mass basis. Google must do the same for YouTube.
I own Disney, Microsoft; positions can change without notice.
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Reader Comments (Page 1 of 1)
2-17-2009 @ 12:42PM
Gary E. Sattler said...
A pay per download scheme will never work for YouTube. However, a yearly subscription fee of $9.95 might be worth the price. If Google implements a per use fee, I'm off there completely, and I won't be the only one!
What did we learn from eBay?
Fee them and they will leave...
2-17-2009 @ 6:05PM
blogs11111 said...
I love watching youtube videos but I wouldn't pay for any of them. I could stand watching an ad before the video, that would be okay.
2-17-2009 @ 9:57PM
ally duan said...
With a YouTube Downloader, it is no use to pay for the youtube content.
http://www.flash-on-tv.com/youtube-downloader.html#124
What Youtube downloader can do ?
1. download any video from YouTube.com ,google,yahoo,etc.
2.Convert flv to WMV, AVI, 3GP, M4V, MPEG, MP4, MOV, VOB,MP3,WMA,etc
3. Transfer youtube video to iPod nano, iPhone, Zune, PSP or other portable players.
2-20-2009 @ 5:52PM
GeorgeS said...
This could lead to something good. If viewers are satisfied to get it for a dollar, everything's fine.
2-20-2009 @ 6:00PM
GeorgeS said...
A further step could be for labels to authorize uploads of their material by users, and everyone could share in the income. Many things are not available in the general market and private uploaders can fill the gaps and contribute for fans. Splitting equally with the poster could be fair and create a thriving enterprise. The poster would be getting like a "distributor fee". Couldn't do it without him.
Don't stop because of quality questions. If downloader is satisfied, okay.