Monday, November 27

The inherent flaw in youtube

From: BBC NEWS | Entertainment | The first superstars of web TV

Internet video is coming of age, with the best amateur film-makers attracting millions of online viewers.

Two of the web's hottest film-making teams have made videos for the BBC News website, talking about what they do and where they think it will lead.


Ian Hecox and Anthony Padilla are two 19-year-old college students from Carmichael, California.

They are also two of the biggest stars on YouTube, where they go under the name of Smosh.

They started by filming a spoof music video for the Pokemon theme tune, which is now YouTube's second-most watched clip of all time, with 17 million views.

They have since branched out into their own comedy sketches, which have established the pair as firm favourites among the online video audience.

So where's the problem you ask.

1) Money Ian and Anthony have made of youtube: $0

2) Money Ian and Anthony can potentially make of youtube: $0

3) Money youtube has made of just one of Ian and Anthony's videos given 17 million page views and a conservative $5 CPM for all the ads and related traffic. $90k

4) Money google paid for youtube and needs to be made back before youtube can become a profitable enterprise for google: $1.6 billion

So... What does happen when all the stars of youtube wake up and start realizing that youtube is making hundreds of thousands and even millions of dollars off of them and not sharing a penny and they have no mechanisms for making a profit or experimentation?

Provided google does start a revenue share, whatkind of percentage do you think these youtube stars are going to get? 5% mayb 50% even?

It all boils down to this.

No matter what google offers them the stars of youtube are going to wake up and realize thay can make hundreds of thousands of dollars a year if they migrate their fan base away from youtube onto an open vlog where they can place advertisements, or do paid subscription... or sell DVD's and merchandise or anything they damn well want, and take home 95% of the profits.

As they say, easy come, easy go.

Dare I say it?

Yes, I day say it.

Youtube is a fad.

One HELL of a fad, yes, but definitely a fad.

That google bought it will give it some staying power and longevity, but the masses are VERY fickle.

I think we're likely to see the migration away from Youtube over the coming years starting with the best and brightest stars that bring them the most traffic unless youtube offers them some serious revenue share AND... youtube must open up to the great world of iPod's, PSP's, and other portable media players and video podcasting which is going to increasingly threaten it's closed business model of web only video.

I speak of no killer app, and I speak of no rapid decline in youtube. All I say is this. Remember Yeah? Well that's youtube five years from now if google isn't very careful about taking the culture of creatures on youtube and turning disenfranchising it by treating it like a culture of consumers whose eyeballs are available to the highest bidder.

Audiences are no longer captive. They owe no loyalty to even the most hard core social networking sites as Orkut, Friendster and many, many others have found out.

This generation is increasingly savy, they get while the getting is good and move along. Youtube is to rigid of a playground, too much of a clay sandbox for the best and brightest of video producers.

Increasingly I'm find more and more of my favorite video makers have started their own domain, their own brand, and their own video blog... and they're using youtube the way traditional media companies are using youtube... purely for product marketing.

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