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YouTube Mobile , YouTube vs. TV - Google monetizing the acquisition

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I had mentioned two possible options in my earlier post here that Google could employ to monetize the acquisition of YouTube and am happy to see that both those options have been implemented.

Context Setting

In the earlier era, broadcast companies used to invest millions of dollars to create high-quality content shows and make their money selling advertising space during those shows and by licensing that content to a variety of local channels. That distribution model is changing as people turn to the Internet for their programming.

The situation in which the broadcasters are today is somewhat similar to what the print media publishers were a few years ago when the internet became popular. The print media publishers survived that change by embracing the move to internet by adapting their content and distribution to include the internet as a another channel.

As the scenario changes some top of the mind questions that come up are,
  1. Can the broadcasters adapt and change their advertising revenue model and the distribution model to the changing scenario ?
  2. Will the broadcast companies continue to control the television set and the cable box, user generated content will rule the Internet video world of YouTube and Google Video.
  3. Is there a future for high-quality video content on portable media devices - can device advances catch up with the speed of user demand ?
and many more ...

According to Albert Cheng, executive vice president of Digital Media at Disney-ABC Television Group, the proliferation of options to the consumer will bring the cream to the top, even on portable devices and over the Internet. "Once you change the distribution model, you can only increase consumption. And great shows will definitely reap the benefits of all these distribution opportunities," he claimed. By contrast, he said, mediocre shows that people watch simply because "there's nothing else on" will suffer.

CBS, one of the first networks to deliver original, high-quality content to the Internet, agrees. According to David Poltrack, president of CBS Vision, "we're discovering that you can make money by building short-form programming off the show." He thinks bite-size, shorter content offerings that build off the prime-time television show are the way forward.

YouTube vs. TV?

With this changing scenario becoming a reality, one would only be led to assume that broadcasters would clamor to embrace the medium. The fastest way would obviously be partner with a player with a well established user base. Who better in today's scenario than the likes of YouTube which is exactly what CBS has done.

For starters the key driver of YouTube as a brand is its 100 Mn (or whatever that number is now) members. Two reasons why I think these people go there time and again is, firstly it allows you to upload your creation and give your a easy access to others creations and secondly it helps you get a immediate audience for the content you upload. The very fact that this is user generated content means some level of aggregation / ranking becomes necessary. Well this is nothing new to this but exists with all user generated content which is why sites like Digg are a runaway success.

Does it make sense for CBS to approach YouTube and deliver content to the 100 Mn odd YouTube members - definite YES.

Does the same amount of value addition happen to YouTube - could be a YES/NO. If or not there are changes to how YouTube manages UGC will be key here.

As more broadcasters sign in to YouTube, I would think YouTube will just be so so similar to the TV in its earlier era, replete with channels for each broadcaster, money from advertisements etc. The only possible difference would be YouTube would own both the user generated content the consumer (am assuming the last mile access would become a commodity) and the broadcaster owns the content that it delivers to the consumer.

YouTube on Mobile

Who can ignore the power of the mobile consumer today ? YouTube has understood this and has tied up with Verizon in the US in an agreement that delivers clips through Verizon’s V Cast service. I really have nothing further to comment here other than just saying that as mobile TV becomes more of a reality this space will only further heat up.

Players like YouTube would would have access to networks of users and content (albeit user generated) would be extremely well positioned to address this move.


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