Case Study: Has 'Video killed the web promotion star'

1. Advertising on YouTube

In my view as a casual user of YouTube, acceptance of advertising while watching videos on YouTube depends on the quality and relevance of content being viewed.

I believe a content portal should maintain financial stability to continually provide services and deliver content. In this case I see two possibilities YouTube can adopt. A subscription based membership model, where members pay a reasonable amount on agreed terms. The other would be a ‘fee free’ based membership model as YouTube currently operate.

Content delivered to ‘paid’ members could contain little yet targeted advertising content – similar to Pay TV advertising model.

There is no doubt, overtime consumers will agree that they need to pay for the value created by quality content delivered in quick time.

From YouTube’s point of view, they can place more emphasis to content’s appropriateness to a user’s profile. Maintaining the quality of the advertising content as well as of Videos available for view is extremely important.

An example site that has lost its initial ‘charm’ due to commercialisation that I’m aware of is www.dnsreport.com, which used to provide free network analysis tools, and now charging a subscription based model.

However losing the ‘charm’ does not necessarily mean loss of visitors and 'death' of the site. After the subscription model was introduced I have noticed a considerable improvement in the quality of the services. On the downside, you can see on blogs such as these (http://www.webhostingtalk.com/showthread.php?t=606200) where some users looking for alternative free solutions.


2. Copyrighted Materials

From a commercial point of view, I believe YouTube’s decision to adopt the Digital Millennium Copyright Act, is a smart one. However as a key player in the digital content broadcasting, I feel more should be done to protect intellectual rights of the content creators and owners.

Digital Millenium Copyright Act is a good solution for YouTube for obvious reasons. Imagine having to filter around 200,000 uploads on daily basis, essentially meaning a massive workforce screening content 24x7 basis.

Not only this option would be financially viable for YouTube and Google but also will have a direct impact on its shareholders. It will also will arguably limit the number of users browsing the content on YouTube if up to 50% of copyright infringed content is removed.

Adaptation of Digital Millenium Copyright Act would be a poor solution for content creators and owners, because onus falls on to them to ‘police’ the copyright infringements on YouTube, which can be time consuming and costly. It is a fact that most start-up creative talent would have neither the time nor the money to take such measures to protect their copyrights.


3. YouTube for Brand Establishment ?

Major concerns I would have would be exposing my customised designs on the YouTube. Since I would look at to gaining a competitive advantage in the market place by providing innovative sporting goods, I will certainly have concerns about the protection of my product differentiators from the rest of the market.

Of course I would not like to see a container load of ‘look alkies’’ being sold over the Internet for a fraction of the cost! I would also have doubts if I’m reaching the target audience with YouTube.

How many of the viewers will be in the ‘mood’ to watch a video on sporting goods (unless they are watching really 'boring' content and find my advertisement is more appealing - which would be a positive)?

I will definitely consider other methods of brand building methods before considering YouTube.


4. Google Response Rates & Long Term Sustainability

I agree that there would be a higher rate of responses (clicks) on its Flash animation on the bottom of the video screen, however find it hard to believe it is 10 times likely. After all, these are claims made by Google and not verified by independent research.

Long term sustainability depends on multiple variables. Since adaptation of broadband is definitely set to increase every year it is likely more and more people will be entertained/ educated (or even humiliated) by the ever increasing content o YouTube.

However the quality and appropriateness of content are fundamental items that will dictate the long term sustainability. YouTube operates in an open playing field and therefore inherently at the risk from fierce competition.

It is very clear with today’s share prices of Google that it has lost more than 50% of its ‘paper’ value from its peaks in 2007. In order to ascertain the long term viability of a business, we also have to ask other questions such as what is the ‘true’ value of a portal such as Google/ YouTube and how do we measure it?

While companies such as Google have not directly contributed to the current Global financial crisis, we see that they are not immune to setbacks. Therefore, personally, I will measure the sustainability of such organisations in shorter terms rather than 5+ years periods.

Therefore I believe the sustainability over 5+ years is extremely hard to predict. Depends on what values we measure sustainability; for example is it the share value, users’ satisfaction, revenue from advertising, revenue from possible memberships etc