Even Google Doesn’t Know how to Monetize Video

Posted by admin

June 15, 2008

There is no question that Google is one of the world’s most profitable Internet companies, but that doesn’t mean it always knows how to monetize new properties. In this case, the new property in question is YouTube.

It is no question that video is the fastest growing medium on the web with the popularity of YouTube and the number of other video start-ups launching on a weekly basis. But still, that doesn’t mean anyone knows how to monetize it, despite its rapidly rising popularity.

In a recent interview, Eric Schmidt, Google’s CEO, said that the company should be able to make money from YouTube and the millions of video watchers it attracts, but stated that the company has yet to figure out the most effective way to monetize this audience.

Running pre-roll and post-roll ads would be useless, since who wants to see a 15 second ad for a one minute video? Google has been experimenting with ads that pop up over the bottom third of the video box, which is probably the best way to place an advertisement in these short boxes. Other than that, Google can still look to monetize the service through traditional display advertisements and sponsorships outside the video players. Google could also opt to offer a subscription service offering more video production related services to dedicated users willing to pay.

Regardless, YouTube has a large audience and as Mr. Schmidt said, the company has the luxury of time when considering what it should do with YouTube and video advertising in general.