Youtube Content ID – Major Media Companies To Sell Video Ads

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youtube-moneyThats right!  Now, according to an exclusive that I just read on Techcrunch: “YouTube is trying to convince them that love is better than war by giving them a cut of advertising revenues from their videos that appear on YouTube, regardless of who put them there.”

According to Techcrunch, industry analysts have suggested that this program/model may soon be expanded to additional big media partners in 2009.  Youtube declined to comment on future revenue strategies and plans.

Youtube already confirms that only a few media partners like CBS are able to sell video advertising inventory.  Not only does CBS have the ability to directly sell and monetize video assets that appear in their channel, they are also able to monetize video views on videos that are identified by YouTube, as CBS copyrighted. More specifically, CBS can monetize videos that are upload by users and picked up by YouTubes’s Content ID system.  This Content ID system can identify copyright material users upload and quickly removes it from the video sharing site or allows the content to remain live and run advertising against it.

We already have seen that the job of monetizing Youtube has been a challenging one for many reasons.  Hulu, a site that launched to the public only 10 months ago (March 2008), and isn’t even available worldwide like Youtube, is already expected to match Youtube’s revenues in 2009.  Here is a simple graph to show how remarkable that is:


– Funny side note here.  I first tried to do the graph using Google trends, and guess what site they wont show the traffic for..  Yup, Youtube ;-)


Why do I find that funny? – Google’s official mission statement:

“Google’s mission is to organize the world’s information and make it universally accessible and useful.”

Hey, Id be a bit embarrassed as well.  Besides, I suppose it is their information and not the world’s  I digress…

Why is this Significant:

I think that it is fair to state that the overwhelming consensus in the industry is that most advertisers are not yet ready to embrace video advertising on what is primarily, user-generated content. Additionally of course, there are several other reasons:

  1. Ad Formats: Youtube runs overlays, not in-stream pre-rolls, mid-rolls, post-rolls, etc…. (with very few exceptions) Many advertisers have existing digital assets created for cable and broadcast television. These lend themselves well to in-stream advertising and the advertisers and media agencies placing buys for video advertising are lazy! Just kidding, well not-altogether. That being said, when the creative is already there, it makes sense to utilize it.
  2. Branding and Effectiveness: Advertisers are not only more acquainted with in-stream advertising formats, requirements, etc…., but they tend to feel that in-stream ads offer more prominent branding. I could write a whole post about this but in all honesty, they are right, and they are wrong. Perception is reality.
  3. Short-form content: As a great post on CrunchGear summarizes: “YouTube, as you’re all painfully aware, is primarily comprised of short videos of guys falling off their skateboards (embedded here), dudes playing video game songs on the piano and illegal Seinfeld clips.

And there are of-course other reasons related to sales force, audience demographics, attention span, etc…

one-billion-dollars-youtube-googleNone-the-less, YouTube seems to be more open these days to embracing other models and this will certainly help.  Can you blame ’em?  How much did Google pay again?  $1.6Billion?


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