Having experimented with a number of different types of advertising and settling on none in particular, Google is once again experimenting with pre-roll adverts that play before video clips. The difference this time is they’re skippable.

YouTube Revenue Vs Pageviews

Since buying YouTube for $1.65 billion in 2006, Google has tried to turn it into a moneymaking site. It’s certainly managed to take the site to the next level, with it now managing one billion page views a day, but the revenue still hasn’t come.

There’s been some debate over whether YouTube makes money, breaks even, or loses money every year but needless to say revenue needs to be upped in order for Google to make its money back. Especially as Google CEO Eric Schmidt has admitted the company paid $1 billion too much for the online video site.

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Full-length episodes of television shows and movies are an important part of YouTube heading forward. Which means the company must be delighted to have signed a deal with UK broadcaster Channel 4 which will see 3,000 hours of content coming to the video sharing site.

YouTube and Channel 4

YouTube has for a while now been moving away from user-generated content and trying to entice broadcasters into providing content via the site. It’s had mixed success but it has now nabbed a major broadcaster in the form of Channel 4.

Channel 4 was the first UK broadcaster to launch a video on demand service, doing so in 2006. But 4oD failed to get the attention it deserved and the BBC iPlayer snatched the limelight instead. 4oD has gone through some major changes since then and now rivals the iPlayer for user experience.

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The storm in a teacup which saw everyone, YouTube, Warner, and viewers, lose out when music videos were pulled from the video-sharing site is over.

YouTube and Warner Music Group have now forged a new deal which will see WMG having its own branded player and able to sell its own advertising inventory.

Warner Walks Away

It was late December 2008 when Warners decided to pull all its music videos from YouTube. It happened due to a breakdown in communications while the two parties were trying to thrash out a new licensing deal. The ones that had been in place for years were coming to an end.

As always, it came down to money. The Warner Music Group wanted a bigger slice of the revenue pie and YouTube was unwilling to deliver. Regardless of who was right and wrong, the incident helped no one in the end.

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Music videos are big business on YouTube. Which is why they are being moved off the site and onto their own dedicated site in the very near future.

Can Vevo be monetized successfully enough to please both YouTube and the major record labels? And will the viewers willingly move over with the music videos?

Online Music Videos

Music videos make up a large percentage of the most viewed videos on YouTube and other online video sites. Along with movie trailers and the very best viral videos, music videos are the biggest hitters by far, as Visible Measures’ viral video chart consistently shows.

This makes the decision to move music videos off YouTube and to their own domain both justified and a strange one. While Vevo has the opportunity to become a premium portal for music videos of all kinds, it’s going to leave a gaping hole on YouTube.

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Hulu is a brilliant service which has truly brought American television to the online masses. Part of the appeal of Hulu is the fact it’s free, with revenue coming from a purely advertising-based model. But certain parties want to change all that. Could Hulu survive the transition to a subscription-based model?

Hulu – Hot and Getting Hotter

Being British, I’m jealous of Americans for one reason and one reason alone – Hulu. Yes, we get to watch BBC programming on the iPlayer, and there are a number of other online TV catch-up services either already present or about to launch in the U.K. But Hulu offers American television at its best.

Hulu is massively popular in the States, having around 40 million viewers at the last count, who between them watched nigh on 500 million video streams. Which is surely cause for celebration amongst the partners behind the project.

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Making money on YouTube isn’t an easy venture, even for Google itself. But it’s getting easier for individual users. Now, as well as established video partners being able to monetize their efforts, producers of one-off viral videos will be able to make some money.

The Revenue Issue

The problems Google has had turning the massive popularity of YouTube into a massive and repeating payday are well-known. OK, so it’s not as though YouTube is a failure or anything but its revenue is certainly struggling to justify that huge $1.65 billion Google paid for the site.

Part of the problem is the sheer number of videos on the site that either can’t or aren’t monetized. The “can’t” is due to concerns over making money from copyrighted clips while the “aren’t” stems from YouTube’s unwillingness to monetize videos which have no chance of making any money – most of the videos uploaded to the site every day.

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Online video will only truly take off when media, TV, and cable companies embrace it as an alternative to traditional TV. But for that to happen, there has to be a profit in it for them. Can Web television ever compete with traditional TV in the revenue department?

Online Video Advertising

Online video is forever increasing in popularity with viewers, and the TV companies are starting to realize there’s a need for a cross-platform strategy, with the days when the television was enough well and truly over.

But to truly grow, and more importantly be able to compete with the television set in our living rooms, advertising rates, both in terms of quantity and the monetary value, are going to have to increase.

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