YouTube’s Monetization Strategy

January 29, 2007 by Lisa Oshima | Advertising, Monetization, Social Media

The World Economic Forum’s annual meeting in Davos Switzerland took place between January 25-29th.  Today, I discovered some great footage from that meeting on YouTube, which dovetails nicely into my blog from Friday, in which I made several predictions for mobile in 2008. In the video, Chad Hurley, Co-Founder of YouTube, talks about some of the exciting things that lay ahead for YouTube:

For those of you who don’t want to watch the video, the key points are that YouTube is planning to monetize video submissions for users, and they’re creating an audio engine, which will recognize songs that users have overlaid on top of their videos. Once the song is recognized, YouTube will enable viewers/listeners to purchase the said song(s)  through legal means and give a commission on the sale to the person who posted the video that uses the song.

My blog on Friday talked about the rise in popularity of monetizing video submissions of things like news events from mobile phones in 2008.  I think it will be really interesting to see if/how YouTube does this.  Will they be like Revver, monetizing videos by the number of hits they receive/ ad revenue generated, or will they go a slightly different route and charge networks/ news agencies to re-purpose YouTube videos on other formats and pay those who submit videos a portion of the proceeds?

I also wonder how closely YouTube’s audio cross-selling/ commissions based approach to music will mirror what social networking and mobile OS company, Glide Mobile announced with The Orchard in March 2006.  Stay tuned…

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  • Predictions that come with the monetisation of net videos.

    Endomol will suffer intense competition with a number of amateur Big Brother programs will slowly appear on the net.

    Celebrities will suffer a new level of harassment when the world’s population and their mobile phones become instant paparazzi.

    Governments will find the need to strengthen and better police privacy laws, as there will be a huge increase in the number of stalking videos appearing.

    The manipulation of war journalism that we have seen recently with ‘embedded journalists’ replacing freelance reportage, will become much harder as cheap media enabled mobile phones proliferates the third world and everyone becomes a source of news footage (Third World populations will discover a new source of revenue.)

    Big media companies will lose more market to the thousands of independent production houses that will proliferate.

  • YouTube definitely seems like it has a fresh idea that allows the RIAA to continue sopping up its money, however, this idea has the movie editor in the picture to make some minor funds as well.

    However, the pricing for this scheme has to be large compared to something that is popular and successful (like the fourth largest distributor of music in the United States, the iTunes Music Store). If the RIAA is unhappy with the cut it gets from .99$ a song to consider shutting Apple out of its business at one time and to also consider the revenue that YouTube wants to make, even throwing in the fact that a user gets a commission based on the songs purchased… I could not see how a per song price of less than 1.49$ would be a productive revenue generator for a company like YouTube with such advance needs.

  • If you are interested in this post, check out today's entry on TechCrunch: YouTube Delivers Knock Out Punch to Competitors: http://www.techcrunch.com/2007/01/29/youtube-de

  • Platon White

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