YouTube and Its Content Play
March 31, 2013
Quite an interesting write up this: “Lessons Learned from YouTube’s $300 M Hole.” First, the “m” means millions. Second, the write up provides a useful thumbnail about Google’s content play for YouTube. The idea, if I understand it, was to enlist fresh thinking and get solid content from some “big names”.
The innovative approach elicited this comment in the write up:
There were a lot of recipients of this money, and many of them were major media companies trying their hand at online video that received some fat checks, up to $5M a piece, to launch TV-like channels. What we all found out is that, no matter how hard you push them and how much money you spend on them, YouTube doesn’t work like TV…and funding it that way is daft.
If the article is accurate, one channel earned back money. The other hundred or so did not.
The lessons learned from Google’s “daft” approach struck me as confirmation of the observations I offered in a report to a former client about Thomson Reuters’ “what the heck” leap into the great Gangnam style of YouTube; namely:
- Viewership and Google money are correlated
- Online video is different from “real” TV shows
- Meeting needs of users is different from meeting the needs of advertisers.
The conclusion of the write up struck me as illustrative of the Google approach:
With regards to the last lesson, allow me to submit to any YouTube employees out there that the ad agency doesn’t have the power in this equation. YouTube is a young company, it does not need to convert 100% of its value to dollars. Please, let the advertisers figure out for themselves how to tackle this very new medium instead of trying to shape the medium to meet their needs. Seems to me, that’s the strategy that got Google where it is today.
In short, Google may have lost contact with what made it successful.
Stephen E Arnold, March 31, 2013
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