YouTube

YouTube is now five years old, and has enjoyed quite a history in that short space of time.

It was approaching profitability before Google swooped into acquire the site for $1.65 billion, and the search giant has focused its attention on setting the site on a new path with longterm goals in mind rather than chasing short term profits.

Those longterm goals may be about to pay off as an improved advertising setup combines with an increasing userbase to put the site in the black for the first time.

YouTube Advertising

YouTube has had some form of advertising on its site since Google took over. But the majority of video clips have been excluded for fear of making money from copyrighted material, an offense Viacom accused Google of committing in its recent lawsuit.

At one point around 96 percent of all YouTube videos were ad-free for this very reason, but according to The New York Times that figure has dwindled to 86 percent. That leaves 14 percent of YouTube videos with some form of advertising.

The main focus of the NYT feature is how YouTube is now able to advertise against copyrighted clips uploaded without permission from the owners. Where once they would have been removed, they are now left on the site complete with ads so that both Google and the copyright owner can make some money.

This is something we covered way back in January 2009 when a Japanese anime company called Kadokawa used this method to its advantage.

Profitability Beckons?

With YouTube now serving around 2 billion video ads a week revenue is expected to hit around $450 million in 2010. That should earn Google its first profit on the property it paid well over the odds for almost four years ago.

Once YouTube is making a profit I doubt it will ever make a loss again, as its viewing figures are continuing to climb month on month. And as these new figures show, the opportunity to display advertising is also growing.

BBC iPlayer

The BBC iPlayer is a fantastic service, and its popularity has grown massively since its launch three years ago this December. At its core is the ability to freely and easily watch BBC programming from the past seven days, but there is a lot more to it than that.

The latest version of the UI, iPlayer 3.0, puts social networking at the core, and it brings another element to bear. The BBC iPlayer is a must for all Brits to use. Any that don’t aren’t taking advantage of the fact they’re paying for the service through the license fee. Those that pay it, of course.

Global iPlayer Expansion

There have long been rumors that the iPlayer will one day go global. The most recent, before this week, was last October when BBC Worldwide (the BBC’s commercial arm) spelled out its aims and ambitions for such an expansion.

During his MacTaggart Lecture to the MediaGuardian Edinburgh International Television Festival, which was considered newsworthy thanks to the baiting of BSkyB and its chairman James Murdoch, the Director-General of the BBC Mark Thompson once again floated the idea.

According to PaidContent, he said, “Within a year, we wish to launch an international commercial version of the iPlayer.”

That’s the first indication of a timeline from anyone at the BBC, and suggests the project is already underway. Unfortunately there was no indication of pricing but you can be assured the iPlayer won’t be free outside the U.K.

That is, unless it’s being watched by British residents abroad, as Thompson also said people such as servicemen should be able “to use a UK version of the iPlayer wherever they are in the world”.

Conclusions

I’d like to see the BBC iPlayer offered abroad, as that would be a good first step towards breaking down the copyright barriers still in place across the Web.

However, the BBC will surely have to charge for access by non-license fee payers, and that could limit the number of people interested in the service.

YouTube Fame

YouTube has made many people famous over the years since its launch. Some have been unwilling stars made famous by someone else uploading a video clip of them doing something which has spread across the Web. While others have made names for themselves by seizing an opportunity.

However, not all of these YouTube stars have actually made any money out of it. In fact, most probably haven’t seen a penny. But there are a select band of people making serious money from the videos they upload to YouTube.

YouTube Fortune

TubeMogul recently compiled a list of the top 10 biggest earning independent YouTube stars. The income figures involved are estimates based on how many views each of the people listed received between July 2009 and July 2010.

Top 10 YouTube Earners 2009-2010

1. Shane Dawson – $315,000
2. The Annoying Orange – $288,000
3. Philip DeFranco – $181,000
4. Ryan Higa – $151,000
5. Fred – $146,000
6. Shay Carl – $140,000
7. Mediocre Films – $116,000
8. Smosh – $113,000
9. The Young Turks – $112,000
10. Natalie Tran – $101,000

None of these people are part of a company or brand and are therefore making videos for themselves and earning big bucks as a result. To earn $100,000 or more in the space of 12 months from what is essentially a part-time job that is also fun is amazing.

Having said that, some, if not all, of these people work extremely long and hard on their videos. And they’ve had to be consistently good in order to build the audience needed to make this kind of money. So good luck to them.

Could You Be Next?

The big question is how you or I could join this elite group. It’s certainly possible, as these people were at one time unknown and unpaid online. But it’s also not easy.

The key is to find a niche, an idea, something to make you stand out from the crowd. Both Fred and The Annoying Orange used an original idea and built on it until the fanbase reached tipping point. While others on the list have found their groove very naturally.

It’s much more likely that you won’t reach these dizzying heights. So don’t give up the day job. But the more of us who try and make our mark on YouTube, the more chance that the cream will rise to the top.

Conclusions

Blogging isn’t a particularly well-paid job. I’m not complaining because it does have many other perks, but being a YouTube star has all those perks – working at your own pace and from home – while also being a potential money-spinner.

I guess like every other hopeful I need to think of the idea which will springboard my entry into the YouTube hall of fame. And the fortune could, should, then follow.

[Via Business Insider]

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The Revolution Begins

In terms of the Web being accessed by computers, online video has made its mark. The likes of YouTube, Hulu, Netflix, and the iPlayer have all been massive hits and proved beyond any doubt that the consumption of digital media is the future.

So it’s now time to ramp the effort up, with the living room the next big target. The ultimate goal must surely be to disable the big TV and movie studios’ abilities to control the marketplace.

Rose Loves Apple iTV

If the rumors are to be believed, Apple is preparing to relaunch Apple TV as iTV, turning Steve Jobs’ hobby project into a mainstream, highly-affordable piece of kit designed to revolutionize people’s viewing habits.

Kevin Rose, the founder and CEO of Digg, believes iTV will “change everything.”

His reasons for thinking this include iTV apps, similar to the one for the iPhone and iPod Touch, a la carte TV stations, video sharing between family and friends, and the integration of Apple’s existing mobile devices, including the iPad.

I agree with Rose that should iTV succeed, then it will be an important part of the living room revolution. But Google TV and video games consoles also have a part to play.

Google TV & Games Consoles

Google TV is set to launch before the year is out, and the interface is so far looking great. The one problem Google appears to be facing is convincing content partners to sign up. Mainly because while Apple is happy to charge end users for services, Google prefers free, open-source products. And studios and networks will balk at giving much away for nothing.

Then there are games consoles such as the PS3, Xbox 360, and Wii. They have already proved their worth to the online video sector by offering a means of reaching living room audiences thanks to their in-built broadband connectivity. If anything, Sony, Microsoft, and Nintendo will likely fight for more partners as online video options give their console the edge over the competition.

Conclusions

Put these three products together – all of which are affordable and appealing to the mainstream – and you have a seemingly magic combinations.

2011 could be an important year for online video making the move to the living room, whether the current owners of the space support the revolution or not.

ITV and NBC Universal are two such examples of this growing trend.

On-Demand In The U.K.

While Netflix, Hulu, and individual U.S. networks are using the Web in America to gain viewers, the U.K. is enjoying its own boom in online and on-demand video sites.

The BBC iPlayer is massively popular, while Channel 4 (4oD), Channel 5 (Demand Five), ITV (ITV Player), and Sky (Sky Player) all have their own dedicated catchup services.

Then there are the likes of SeeSaw, YouTube, and the MSN Video Player which are acting as third parties to broadcast content from others. All in all, the U.K. has a great mix of options for potential Web TV viewers.

NBC Comes To SeeSaw

NBC Universal has become one of the first U.S. companies to ink a deal with SeeSaw, following in the footsteps of MTV, Disney, and Comedy Central. Shows such as House, Battlestar Galactica, Heroes, and The Office are now available on the site.

Unfortunately they aren’t free, with rental prices starting at 99p per episode, and between £3.99 and £17.99 for a full series. Which isn’t actually a very good deal seeing as DVD boxsets usually cost around the same or even less than that. And they are for keeps while SeeSaw content is only available for 90 days after purchasing.

Still, it’s good to see SeeSaw building its content. I just wish more of it was free.

ITV Player Overhaul

Meanwhile, ITV has announced plans to overhaul and increase the reach of its ITV Player on-demand service. Which has so far failed to attract the kinds of viewing figures enjoyed by the BBC iPlayer.

ITV Player will soon be coming to the PS3 console, which already boasts iPlayer integration. ITV is also committed to rolling out the service to other games consoles, set-top boxes, and mobile devices.

This should help increase viewing figures and consequently improve on the revenue brought in by the pre-, mid-, and post-roll advertising ITV embeds into each online stream.

YouTube, Vevo, Etc.

At the end of 2008 it came time for YouTube to ink new deals for access to the major record labels music videos. Things didn’t quite go according to plan, and Warners ended up removing all of its content from the site.

After many more issues over many more months, Vevo was born. Vevo is a partnership between UMG, Sony, and EMI (but not Warners) which sees one entity controlling the partners’ music videos.

It’s proved very successful, and Vevo is now one of the most popular online video destinations on the Web.

MTV Loses Out

The online destinations of MTV Networks, which include MTV.com, VH1.com, and CMT.com, have lost access to the music video catalog of the Universal Music Group after talks to forge a new deal broke down.

It could get worse for MTV as well, as the three labels which make up Vevo will likely stick together. MTV’s existing deal with Sony ends in a couple of months, and the deal with EMI is up for renegotiation shortly afterwards.

MTV has always had a difficult relationship with the labels, with the latter considering they didn’t get the revenue they deserved from the former’s TV channels. And that rocky relationship has continued on the Web.

Conclusions

Music videos are a big draw online, with the instant accessibility of them meaning the television music channels which dominated for a couple of decades feeling decidedly old hat and unnecessary.

The music labels have woken up to this fact, and are now calling the shots through Vevo. If MTV wants to remain in the online game then it’ll have to eventually capitulate to UMG, Sony, and EMI’s demands.

[Via CNet]

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Netflix’ Changing Business

Things are changing for Netflix, partly forced, partly by choice. A business built on the idea of delivering DVDs to customers by mail is now evolving into one built, and growing, on the idea of streaming content to customers via the Internet.

Netflix’ increase in publicizing and populating ‘Watch Instantly’ has seen the number of customers signing up to the service growing, and revenue growing as a result. Obviously. There is, however, a consequence to this: more money being spent on streaming content.

Acquiring Content Costs Money

It’s hardly a revelation that acquiring content costs money, but quite how much it costs is a little surprising.

Its latest earnings report for Q2 2010 (ending June 30) shows that Netflix has considerably upped the amount of money it’s spending on content for the streaming part of its service.

In the last quarter alone, Netflix spent $66 million on streaming content, up from just $9 million spent during the same period last year. For the first six months of 2010 Netflix spent $116 million, up from $31 million on a year before.

On the flip side, Netflix spent $24 million on DVDs in the last quarter, down from $43 million on a year before. The cost of sending DVDs to customers increased to offset this reduction in the cost of purchasing content.

The good thing for Netflix is that the increased spending on streaming content has persuaded more people to sign up for the subscription service, which includes DVD rentals and access to ‘Watch Instantly’.

Conclusions

Netflix‘ future is definitely in streaming content. And it knows it. The good thing is Netflix is leading the way in what is set to become the norm for more companies. So it’ll be a great thing for Netflix to succeed.

[Via NewTeeVee]

Netflix Streaming

Netflix has been slowly and surely building up its ‘Watch Instantly’ service over the past couple of years. And subscriber numbers have been increasing in line with new features and increased content.

‘Watch Instantly’ is now available on a multitude of devices other than the humble PC. This includes set-top boxes, games consoles, TVs, Blu-ray players, and even the Apple iPad.

Netflix subscribers are responding by watching streaming content more often and for longer.

Q2 Financial Results

The Netflix financial results for Q2 2010 have now been revealed, and they show Netflix is on the cusp of a meteoric rise.

In the last three months alone, Netflix added one million subscribers, going from 14 million to 15 million in total. The majority of new subscribers are plumping for the $8.99-a-month plan which allows one DVD at a time but unlimited access to ‘Watch Instantly’.

Revenue for the quarter came in at an impressive $519.8 million, 27 percent higher than the same period in 2009. Net income also increased from 54 cents per share in Q2 2009 to 80 cents per share in Q2 2010.

61 percent of subscribers are now streaming more than 15 minutes of video via ‘Watch Instantly’, which is a huge increase on the 37 percent who did so this time last year, and a modest increase on the 55 percent who did so during the first quarter of 2010.

Netflix now expects to end the year with around 18 million subscribers.

Conclusions

Netflix is truly showing itself to be a company with a bright future. It’s ahead of the game in terms of offering streaming content, and with an international expansion starting in Canada later this year, I can’t see the momentum slowing anytime soon.

[Via NewTeeVee]

From Broadcast To Online TV

The tide is ever so slowly turning away from broadcast TV and towards online TV.

YouTube is insanely popular, as is Apple’s iTunes service. Tie that in with the iPad and a new range of similar tablet computers on their way which are able to stream all types of media and you have one vision of the future.

Another vision of the future is connected TV platforms, of which Google TV and the BBC’s YouView are the biggest hopes on either side of the Atlantic. And then there’s Netflix’ Watch Instantly service, streaming to a huge range of devices both in the home and mobile.

Netflix/Relativity Deal

Netflix today announced a deal with Relativity Media that will see some of the films this small distributor works on be available exclusively on Netflix’ Watch Instantly.

The deal sees 14 of the company’s offering from this year heading for Netflix rather than cable TV.

Ted Sarandos, chief content officer for Netflix, said:

“Our continued goal is to expand the breadth and timeliness of films and TV shows available to stream on Netflix. Historically, the rights to distribute these films are pre-sold to pay TV for as long as nine years after their theatrical release. Through our partnership with Relativity, these films will start to become available to our members just months after their DVD release.

Netflix currently has around 14 million subscribers, and is clearly hoping to add to this number by upping the range of content it offers through Watch Instantly.

Conclusions

As great as Netflix Watch Instantly is, its selection of movies has always been lacking new releases. This deal means new releases will appear on Netflix instead of cable TV stations such as HBO, Showtime, and Starz, which traditionally snap up content from movie studios.

If Netflix can make similar deals over the next few months then it may start becoming the true player it has ambition of doing so.

[Via The Wrap]

ABC iPad App

ABC was the first U.S. television network to release a dedicated app for the iPad, with the company endeavoring to complete it in five weeks so it would be available as soon as the Apple tablet went on sale.

The ABC Player is free, which led half of all early iPad buyers to download it in the first couple of weeks. Big-name advertisers mean that the five 30-second spots were helping to pay for the streaming of content.

Increased Advertising

It was helping, but it obviously wasn’t paying out in any big way, as ABC has now doubled the spots to around 10 per show. According to VideoNuze, the iPad app is just the beginning, with the increased ad loads due to also be rolled out to the ABC.com website.

Five 30-second ads only add up to 2 and a half minutes total. 10 add up to 5 minutes total. So it’s a 100 percent increase, which some people won’t be happy with, but it still compares very favorably with the 20 minutes of ads per hour ABC enforces on broadcast television.

Adverts Are Good, In Moderation

I actually see this as a good thing for online video, as advertising is essential if TV networks are going to move to the Web and keep offering programming online for free rather than charging for it.

ABC believes this will become the standard for premium online video, and that does look likely. Online TV advertising is more profitable than broadcast TV advertising, especially if it is targeted by content and demographics.

Conclusions

TV and online video is converging ever closer thanks to the connected TV platforms such as Google TV, and we need the networks to see profits if they are to continue spreading onto the Web.

Now, if we could just sort out the international rights licensing to make online video global rather than local, we’d be getting somewhere.

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