We heard how Google CEO Eric Schmidt doesn’t have a clue how the company is going to make back the sort of revenue it must have expected when it paid out $1.65 billion for YouTube a couple of years ago.
Then a writer for CNET asked the question no-one else seemed brave, or stupid enough to ask: Should Google kill YouTube? Although it is obviously never going to happen, the raising of the question does at least show the scale of the problem.
The debate has raged ever since, with some quite bitchy arguments happening between industry analysts over the issues involved, and over how much money YouTube is likely to make this year.
Pre and Post-roll Adverts
Schmidt had already promised some new ways of monetization on the way, and it seems at least one of them has now come to light, with The Wall Street Journal reporting the dreaded pre-roll and post-roll adverts are coming to YouTube.
YouTube has long held the policy that pre-roll and post-roll ads aren’t right for the site, mainly because the viewers hate them, and if the use of them were to become widespread, traffic would be sure to suffer.
Adding pre-roll and post-roll adverts would surely indicate that Google are desperate to make YouTube in to the revenue-making machine it surely has the capacity to become. But that it couldn’t actually fathom any new and innovative ways to do so, and reverted to this most hated of methods.
Legal Wrangles Continue
The WSJ article noted that Google was only putting ads on to video clips that have been approved by media companies and other partners, obviously due to the legal wrangle the company is currently having with Viacom over copyrighted clips.
The problem with that is only about 4% of video clips uploaded to the site are approved, so that’s 96% of content on the site, and eating bandwidth, that will never make any money for Google.
Profits Before Viewers
Even speaking from personal experience, pre-roll ads are a big turn off, and would potentially make me not bother watching a video. Google are definitely taking a gamble with this decision, but then profits can sometimes come before viewers wants, as seems to be the case this time.
If the user backlash that followed the overlay ads appearing on YouTube last year is anything to go by, then this will see a mass mutiny. If traffic drops off massively, then will the ads actually be worth it?
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