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.