YouTube

YouTube channels McDonalds: “Billions and billions served.”

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YouTube logoIn case anyone doubts the significance of YouTube as a media platform … the video sharing service just announced that it is now serving in excess of 2 billion video views per day.

For an entity that’s barely five years old, this statistic is pretty incredible. But it becomes easier to believe when the full extent of YouTube’s video inventory is understood.

In fact, these days nearly 24 hours of video footage is being uploaded to YouTube every minute. That’s more than 34,000 hours of video each day.

Plus, there appears to be no end in sight to the growth of YouTube’s video library, as the rate of uploading has increased by nearly 20% over the past year.

The fact that the vast majority of YouTube videos are hardly worth the time it takes to watch them makes little difference. Far more than Yahoo Video or Hulu, this site has become the “go-to” place for finding everything from old TV commercials to short clips from movies or shows. Or to engage in the guilty pleasure of browsing around and viewing everything from news anchor bloopers to boring college commencement speeches and embarrassingly bad student dance recitals.

Actually, the number of people who visit YouTube to “channel surf” is astonishingly large. It’s become the new pastime that TV watching once was.

And the “social” aspect of YouTube is important as well, as people love to pass links to their favorite videos on to their friends. Or to “broadcast yourself,” as the site’s tagline states. YouTube makes that process easy and effortless, contributing to the burgeoning inventory of new video material.

When Google acquired YouTube in 2009, more than a few industry observers wondered about the rationale behind the purchase and questioned the effectiveness of YouTube’s business model. Looking back one year on, it’s hard to understand what the fuss was all about!

And just yesterday, Google announced ambitious new plans for YouTube. It’s begun converting the entire library of videos to its new WebM video format that incorporates VP8, special codec compression software that facilitates the delivery of smooth, high quality video images.

In yet another swipe at its rivals, Google is offering VP8 royalty-free, in a bid to knock Flash (Adobe) and H.264 (Apple) platforms off their current top perch. Will they be successful? Well, based on history …

Facebook Continues on its Merry Way to Social Media (and Web?) Dominance

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Here’s a very interesting finding ripped from today’s social media headlines: The Business Insider and other media outlets are reporting that Facebook now accounts for nearly one in four page views on the Internet in the United States.

So claims database marketing consulting firm Drake Direct, which has studied web traffic in the U.S. and the U.K. by analyzing data collected by Compete, a leading aggregator of web statistics.

Just to give you an idea of how significant Facebook’s results are: by comparison, search engine powerhouse Google accounts for only about one in twelve page views.

And Facebook is now closing in on Google when it comes to site visits – with each currently receiving around 2.5 billion visits per month. In fact, studying the trend lines, Drake Direct anticipates that Facebook site visits will surpass Google any time now.

Another interesting finding is that the length of the average Facebook visit now surpasses that of YouTube (~16 minutes versus ~14 minutes per visit), whereas YouTube had charted longer visits prior to now.

These findings underscore the continued success of Facebook as the most successful social media site, even as it has grown to 350+ million users, including more than 100 million in the U.S. with 5 million added in January alone. No doubt, it’s on a roll.

What is YouTube’s Business Model?

Phillip Nones Uncategorized , , , , , , , , , , , , ,

The information is starting to trickle out. YouTube is hemorrhaging red ink. Credit Suisse estimated recently that YouTube will make approximately $240 million in advertising revenue – revenue that has come from a cavalcade of different forms of advertising, licensing and partnership deals.

Balance that income against estimated costs of over $700 million and you get a loss of more than $450 million.

What’s wrong with this picture?

Advertising Age magazine has just reported that YouTube is now selling advertising against 9% of its video views. That’s up from 6% a year ago. But those figures are still paltry. And it’s really no surprise since so much of YouTube’s content is user-generated, devoid of any significant interest and thus not really “monetizable” for advertising purposes.

No one – not even parent company Google, with a market capitalization of over $100 billion – is going to put up with such a scenario forever. The question is whether YouTube will ever be able to generate enough ad revenue to offset the huge bandwidth and storage costs associated with managing a humongous repository of video material. It’s a question that, even if Google’s own senior management doesn’t ask, the company’s shareholders should.

Paid subscriptions, anyone?