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Current ad sharing scheme doesn't allow YouTube access to all content

The online video market is dominated by YouTube. The Google-owned website has by far the lion's share of viewers each month for online video, but is unable to generate significant profits from its huge user base. YouTube has said in the past that the key to bringing in more advertisers was to get content that is more professional on its site.

To that end, Google and YouTube have held talks with TV networks and film studios over the possibility of putting full-length shows and films onto the YouTube network under an ad-sharing program. So far, only a few content producers have agreed to the plan. YouTube currently shares profits with some video makers of popular videos that become viral by invitation. YouTube has also tested pre-roll video ads of 15 to 30 seconds for effectiveness.

YouTube may have the most visitors, but Hulu is coming up fast and is where most users go when they want to watch full-length TV shows. Advertising sales on Hulu are doing well and reports claim that key advertising inventories are being sold out at Hulu. Hulu executives have stated before that a free model is a hard way for the site to capture the value of its content leading some to believe Hulu may transform into a paid content platform.

YouTube is now eyeing a paid content platform as well that would see users paying a subscription fee to view longer full-length TV shows and films. Google's David Eun has said that some full-length programs won't be available to it with its current ad revenue sharing program.

Eun told Reuters, "We're making some interesting bets on long-form content; not all content is accessible to us with the advertising model."

The monthly subscriptions to YouTube service would be similar to how cable companies operate and YouTube is looking into movie rentals like Apple and Amazon offer. So far, the video sharing site has not signed any major content partners for rentals or other longer form content types. Short clips of shows from partners are available on the YouTube platform.

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RE: Remember Cable TV
By Slyne on 12/16/2009 3:11:26 PM , Rating: 0
Well, the problem is that companies exist to make a profit, that or they don't stay around for long. And I don't have an economic background that can explain why, but it's my empirical view that companies can only get bigger or smaller over time. If they get smaller, see my first sentence about their eventual fate.

If you assume that a company needs to always make more money, what happens to them once they reach a stable consumer base? They can either increase prices/revenue or reduce costs. As a customer, one usually doesn't like the former option, and a dwindling customer base is even worse than a stable one; for the latter you can always pressure your workforce or your supply chain: choose your poison of Walmart, outsourcing, lower quality products or services...

As an evolution of the company, or coming from a new player in the field, the next step is almost always through technological evolution: automation of production, WOIP (Whatever Over IP), GMOs...

In the case of cable companies, they have practiced both: increased prices (don't forget inflation though) and reduced quality (more ads). Now comes the time of technology with most notably YouTube (Google, new player) and Hulu (evolution of the service provided by NBC, Fox and ABC) to replace cable.

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007
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