Friday, April 17th, 2009 by Andy Beal

14

Google Desperately Trying to Make YouTube Profitable

I’m pretty sure that if it were not for its enormous size and price tag, Google would have shutdown YouTube along with all the other services that couldn’t turn a profit for the search giant. As it stands, Google has so much invested in the video sharing service that to fail would likely wipe at least a dollar from its share price.

So, it’s not surprising that Google has announced yet another business model for YouTube, this time it’s hoping a combination of new shows and movies, combined with new Google TV Ads Online, will inject something into its bottom line.

This is a new feature of Google TV Ads that lets advertisers place commercials into the ad breaks of TV programs watched online. It works in the same way as Google TV Ads: advertisers can target specific programs and select their cost-per-thousand (CPM) bid. Based on their targets, budget and bid, ads are inserted in the same program breaks that were designed for advertising when the programs first aired.

The new TV shows and movies will come courtesy of new partnerships with Sony Pictures, CBS, MGM, Lionsgate, Starz and the good ole BBC. Now instead of "dozens" of movies, YouTube users can view "hundreds" of them–oooooh!

What’s interesting is the control Google had to give up in order to get the Sony deal. According to CNET…

YouTube has agreed to display the films using a video player from Crackle, Sony Pictures’ own video site. The studio will control all the advertising for the films and Crackle will also get credit for the traffic.

Kind of demonstrates the weak negotiating position Google has with YouTube, doesn’t it?

Other noteworthy YouTube developments include a new "Hulu" style design and a promise from CEO Eric Schmidt that we’ll eventually see "micropayments and other forms of subscription models" on YouTube.


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14 comments on “Google Desperately Trying to Make YouTube Profitable”

  1. David Leonhardt Says:

    April 17th, 2009 at 11:07 am

    There has to be some value-added benefits of paying for a YouTube subscription. Full-screen quality? Dowloadable? Transferable?

    David Leonhardt’s last blog post..The Bugs Bunny Guide to Linkbuilding

  2. Andy Beal Says:

    April 17th, 2009 at 11:12 am

    @David – who knows? I’d probably pay for new release movies in HD, but not sure what else.

  3. My Google Reader Shares - April 17, 2009 | OBannons Leap Says:

    April 17th, 2009 at 11:46 am

    [...] Google Desperately Trying to Make YouTube Profitable [...]

  4. Youtube branche séries TV et films pour contrer Hulu | Ze Laurent | Video Internet & Social Web Marketing Says:

    April 17th, 2009 at 3:31 pm

    [...] pour sa plateforme vidéo fétiche et l’absence de revenus significatifs, Youtube semble vouloir faire taire ses contradicteurs avec une annonce de [...]

  5. Google Come Desperate fecondazione monetizzare YouTube « Web Design Roma News Says:

    April 18th, 2009 at 12:05 pm

    [...] Commenti [...]

  6. jpeek345 Says:

    April 18th, 2009 at 10:25 pm

    YouTube is NOT a good business platform to launch a web video idea from.

    Even if it is OPB (other peoples bandwidth) on your start-up, email response from their advertising form has not turned a response for me in over 60 days.

    It is safe to say that their customer response team consists of a culture of “wake-and-bake” college interns.

    For a MFing contrast try Pandora.coms email response team or Freebase.coms tracking system for every solitary email request at their dot com.

    jpeek345’s last blog post..Bio for Jay Peek

  7. » Pandia Search News Wrap-up April 19 Says:

    April 19th, 2009 at 8:15 am

    [...] Google Desperately Trying to Make YouTube Profitable [...]

  8. Michael Martinez Says:

    April 20th, 2009 at 12:38 pm

    They can still keep the video ad units going as far as I am concerned. I really don’t want to lose that revenue.

  9. Symbian Says:

    April 20th, 2009 at 6:21 pm

    Looks like this is completely different content type so it is more suitable for device supporting services like AppStore.

    Symbian’s last blog post..Upgrade your Nokia 5800 with free apps

  10. Earrings Says:

    April 20th, 2009 at 7:46 pm

    I’d like to be able to download the movies for a small subscription fee, easily re-watch parts of the movie I missed.

  11. radyo Says:

    April 21st, 2009 at 2:25 pm

    Google Desperately Trying to Make YouTube Profitable

  12. Morgan Says:

    April 22nd, 2009 at 2:43 am

    I’d like to be able to download the educational videos for a small subscription fee.

  13. DA Says:

    May 6th, 2009 at 1:55 pm

    Stop it .. The users made youtube have its fanbase.. Now were thrown to the side from producers to consumers .. I dont think so..

    http://www.youtube.com/watch?v=qdU5K3dp3OY

  14. georgia Says:

    May 7th, 2009 at 12:58 pm

    This has been very interesting and it was very informative.