Wednesday, April 22, 2009

The Future of You Tube: Making It Pay

There is an increasing amount of talk about the future of You Tube. According to Farhad Manjoo at, You Tube has been losing money at the rate of half a billion dollars a year, raising the legitimate question of how long such losses can be allowed to continue. Manjoo describes the difficulties of You Tube as follows.

"Just like many print outlets, the company is struggling to sell enough in advertising to cover the enormous costs of storing and distributing its content. Newspapers have to pay to publish and deliver dead trees; YouTube has to pay for a gargantuan Internet connection to send videos to your computer and the millions of others who are demanding the most recent Dramatic Chipmunk mash-up."

Advertisers find that professionally produced videos attract far more advertising dollars than home videos or newscasts delivered from someone's kitchen table. In between amateur home videos and the Hollywood films now being carried on You Tube are many documentaries, historical footage and videos produced by non profit, political or other types of organisations. I find it useful for learning about everything from the Zoroastrian religious minority in Iran to African pop music. For people like me who have interests that are out of the mainstream, You Tube is a valuable resource. I feel a lot of gratitude to them for indulging my obscure interests. I am in full sympathy with their desire to earn money rather than lose it.

I would like to make a suggestion to You Tube that will preserve a measure of their grass roots character. Those who like freebies may roundly condemn me for my proposal. But everyone likes to get paid. Developing a new type of media also involves developing the financial framework needed to sustain it.

I am an avid You Tube viewer. I never upload. The second class of small time You Tube users are those who upload videos. If memberships were made available for uploaders and regular viewers, that could close a big gap. An additional class of membership could be created. Some people want to put up their home videos for friends and family, but not for public consumption. There could also be a family video scrap book category of membership. An additional way of making You Tube pay would be to have a You Tube marketplace. Any purchase made through a You Tube advertisement could give a person money back on their membership fee. If someone purchases three CD's and a video for around $65.00, they would get maybe 10% off of their monthly membership. Also, they could start selling legal mp3 and movie downloads that are hooked up to the videos shown. A membership might cover three such legal downloads.

Although most advertisers might prefer to be associated with professional content, some might want to link to some of the amateur content now offered. Some advertisers might agree to run ads with private content like" kitchen table newscasts" and "baby's first steps " type of videos.
There is the additional possibility of home town channels. I have often wondered how people are doing from my home town, or from my mother's home town, of which I have fond memories. The possibilities are endless.

The pioneers in making money on the internet are unfortunately the pornographers. But a lot of their ideas for fee structures might work in more wholesome entertainment. There is nothing wrong with studying techniques of making money from those who do well at it. The idea of a "fun pass" which admits viewers to different sites might well work if entertainment outlets group together in a sort of cyber amusement park. If money is collected efficiently, the cost of entertainment might well go down.

There are many possible ideas for the next step of the internet revolution, which is making it financially viable. It need not restrict content. One of the beauties of You Tube and the blogosphere is its democratic character.

A lot of the allure of peer to peer networks is the idea of the latest hit or best seller being a mouse click away. You Tube could help in combatting piracy by setting up a framework for selling legal downloads. They could even sell premium memberships that include a few monthly song downloads as a benefit of membership.

We You Tube beneficiaries should not hide under the bed and wait for this problem to go away. We should approach You Tube with ways of making their incredible idea work as well for them as it has for us. Gratitude is an attitude that pays. Let's work on a solution for You Tube and for all of us. Sphere: Related Content

No comments: