Who's afraid of Youtube

Who's afraid of Youtube?

Youtube is the number one video site in the world. In the states alone, it sees 75.43% of traffic in the online video category. Outside the states, in countries like Israel, it is ranked 4th most visited site (according to DNS survey). Its dominance in online video is even bigger than Google's dominance in search category.  And with a future where video content will constitute half of all traffic, Youtube is still expected to grow. Its fast streaming, ease of use and an unrivaled variety creates a video site that's impossible to compete with.

 In a free economy everyone strives to be as big as they can. Those who make it to the top have a better chance of staying there because they are in a better position to grow. You tube, for instance, holds a market share that is 50 percent bigger that following 64 video sites on the list, put together.

A monopoly over content distribution has a problematic potential. One that can be exemplified through another content platform: the movies: When the mega-plexes emerged, showing more than 14 films under the same roof, the smaller theaters began to close down. They could not compete with the unrivaled variety. The audiences voted for the better deal, better air conditioning and fresher popcorn. Today, small cinema houses hardly exist and a mega small amount of distributors decide for everybody what movies will be seen on the big screen.  (And many of those "big screens" are not much bigger than a big screen TV). Once in the theatre you are also forced to watch a 15 minutes pre-roll of commercials despite paying a hefty sum for admission. Needles to say, the ones who benefit most from this situation are Big screen TV's retailers.

(One note regarding this example: Youtube's variety is not controlled by a small amount of people. However, with thousands of videos added daily, the site's content has a unified shade of blur)

 Now, I don't want my young and flexible new media platform to become a grumpy, centralized platform too fast but I don't think it is neither wise nor effective to stand in the way of progress. Thus the Monopoly of you tube over video distribution means that we need to reconsider the industry's profit model. 

The prevalent profit model based on amount of views (CPC, CPM) has an inherit glass ceiling since the bulk of the traffic is already at Youtube. Anyone who opened a video site can sum up his challenges in three words: Traffic, traffic and traffic. Being the reality what it is, a new profit model must arise that leans on three other areas: content, content and content

Commercialized content – Models like product placement that offer brands a real exposure and consumer involvement.

.Niche content – A defined focus, narrow or wide, that is easier to brand and market

Quality content- Professionally and semi professionally produced content so there'll be something worth distributing and something for the advertiser worth getting behind.


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