Two years to the month after it was bought by Google Inc. (GOOG) for $1.65 billion, YouTube LLC still is looking to harness and monetize its vast content assets without upsetting its legions of contributors and visitors.
In roughly one week, the video portal announced two core efforts to address this tallest of tasks. The streaming of full-length movies and the site’s e-commerce platform could transform the super-popular site into one that’s equally popular to those looking to sell products and services to the massive online audience.
The portal’s strategists don’t plan a one-size-fits-all approach to accomplishing that tall task, however.
“We do not believe there is one advertising solution for YouTube, but [there are] lots of valuable ways for advertisers to engage with our audience,” explained Shiva Rajaraman, senior product manager for YouTube. “We are constantly testing a wide range of options to find the right advertising format, for the right content, for the right video experience on YouTube — whether you're watching short videos or long videos, uploading videos, or even searching for videos on our site.”
News that YouTube would start streaming full-length movies is raising some eyebrows, however, as it represents a departure from the site’s content strategy to date. However, it reinforces Rajaraman’s comments on moving forward on all fronts. The revenue part of the streaming effort will be provided by ads, though he did not say how they would be chosen or where they would be placed vis-à-vis the content.
Asked what the next three to six months hold in terms of YouTube’s advertising strategy, Rajaraman did not give much in the way of specifics. But he did say: “The YouTube model is one of innovation and experimentation. We will continue to test advertising products to better understand what works (and what doesn't) for our users, partners and advertisers. The community has defined what works in this space, and we will continue to innovate based on their feedback.”
E-commerce Meets YouTube
YouTube recently launched its e-commerce platform — the other new revenue initiative in about a week.
To recap, YouTube announced the first steps in its e-commerce strategy — deals with Apple Inc. (AAPL) iTunes and Amazon.com (AMZN) that let the Web video community site directly buy and download music, games and other products.
Non-obtrusive retail links to buy songs from iTunes and Amazon.com will appear on the watch pages of authorized video content from companies such as EMI Music, says YouTube.
Users watching music videos from their favorite artists will be able to click on buttons that link to the corresponding pages on iTunes and Amazon MP3 where they can buy and download that music. Those partners who use YouTube's content identification and management system also can enable retail links on claimed videos that they choose to leave up on the site, according to the company.
The company said the YouTube eCommerce Platform will be rolled out on a larger scale over the coming months to allow partners across all industries including music, film, TV and publishing to generate additional revenue from their content beyond advertising.
“Our goal is to improve the overall YouTube experience by connecting consumers with relevant information and entertaining content,” said Chad Hurley, co-founder and CEO of YouTube, in prepared comments. “The addition of retail links will enhance the viewing experience and allow people to engage more deeply with the content they want to consume.”
