YouTube: What Does Google Need? Money?

July 13, 2014

I read an exclusive to Thomson Reuters. I must admit I was a bit confused about what Google is or is not doing with YouTube.

You can find the “exclusive” (for the time being) at “YouTube Weighs Funding Efforts to Boost Premium Content—Sources.” This is, because it carries the Reuters’ logo, a “real” news story I presume.

The story jumps out of the gate with the suggestion that Google needs money. Digital video is the new living room for couch potatoes. If Google needs money, it the firm’s ad revenue flow insufficient to realize Hollywood-style fancies.

Here’s a passage I marked:

YouTube is by far the world’s most popular location for video streaming, with more than 1 billion unique visitors a month, far surpassing Netflix Inc and Amazon. But it is trying to lure more marketers for premium video advertising, boosting margins as overall prices for Google’s advertising declines.

There you go. But we learn that the special channel investment was a less than stellar success:

YouTube set aside an estimated $100 million in late 2011 to bankroll some 100 channels, though it never confirmed amounts spent or other details. Beneficiaries of that largesse included Madonna and ESPN, as well as lesser-known creators. Reuters was one of the companies that received funds for a channel. But few of those have garnered much mainstream attention

Is it possible that the write up suggests that when Thomson Reuters tried out the dedicated channel thing with YouTube, the test was a belly flop.

I find video ads are sort of an annoyance. In fact, I can’t figure out how to make them go away. My solution is to not look at the video. I browsed some videos of the SU 27 and did not encounter ads one day. Try this query on YouTube and on Google Video:

“su-27”.

Here’s what I saw today.

image

Link is http://bit.ly/1ycyteQ.

Variable ads. Errors. Then a few videos of the only fighter aircraft that can do a cobra. Unfamiliar with the move? Ask around for a fighter pilot up on slick moves.

I was baffled. Is Google hunting for investments or is Google just doing Google moon shot thinking? My take on the write up is that Google is flipping rocks, looking for money.

Why?

When the online ad world shifts more aggressively from online search ads to other types of marketing, Google has to find a way to deal with its looming crossover of revenue and costs. Amazon is struggling with the same issue. I find giant, dominant, digital entities interesting. One is never sure of their motives whether it is a “real” journalism outfit or an online ad company.

What’s happened to search? Oh, right, I forgot. The new Google was Google Plus and social search. How did that approach to search (text and video) work out? Why are there two video search systems available? Is Google in sync with the couch potato market and the hot buttons of Hollywood moguls? I don’t know.

Stephen E Arnold, July 13, 2014

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