So I just read an interesting article over at Wired about YouTube/Google trying to figure out just how to adapt their current systems to allow for advertising, how to handle it, and what to do with the profits.
It's a very interesting topic. I've also questioned just how sites like YouTube were able to make any money off their service...I don't think I've ever noticed a single add on their site, and certainly not on embedded YouTube videos found on other sites... Looking at YouTube now, I notice there are banner ads above the videos now, though I could swear those haven't always been there. Double checking with GoogleVideo (youTube's new owner for those who've been living under rocks), there are still no ads to be see that I can find.
Even though the vast majority content found on these, and similar sites are given to them at zero charge, bandwidth and server space isn't cheap. Neither is your IT, development and maintenance crews. In the case of Google, they've obviously got plenty of money, but up until their recent purchase, was YouTube really capable of supporting the millions upon millions of hits they recieved each day off of simple banner ads?
The major advertising industry wants in. They know that traditional TV is a sinking ship and it's only a matter of time before it all but completely dies. The question on everyone's minds, apparently, is how to ad advertisements to services like YouTube without ruining the user experience that's made it so popular. I've got a couple ideas...as per usual ;)
One idea discussed in the article is either putting ads at the beginning or end of the videos. Apparently it's widely accepted that pre-ads are a bad idea and no one likes them. The problem with post-ads is that there's a very likely chance the user will just stop the video after it's complete and not watch the ad following. Sites such as iFilm and GameSpot have been putting pre-ads before their free videos, and personally, I've never really minded them so much. The only time they really were ever annoying was when I would go to watch 10 different videos and all of them had the exact same ad, or sometimes sites will have poorly written playlists that play the pre-ad, but then stop and never play the actual video....now that's annoying! However as most of the new video sites are all flash powered, I don't think the latter problem will come up too often any more.
As YouTube thrives on having their videos embedded into numerous other sites, the ads that surround their video rarely get seen...although they do have kind of a tricky system where if you want to full screen the video you have to click the embedded video which takes you to the main youTube site, and then there's a couple seconds where you ...might... accidentally glance at an add before you can hit that full screen button. Along with those industrious few of us who take the time to view the pages' source and just put the direct *.swf in our address bar, Adobe is apparently planning on adding a built in, real, fullscreen feature in the next release of Flash... so there goes that...and really, that was kind of under handed I think, to begin with....if it was intentional.
Google Video has attempted many other things, such as having a pay-only digital distribution service for certain videos...and potentially that could make a little money, if anyone ever actually used it. Another feature, many of the major videogame sites use is to allow free, low bandwidth/quality streaming and then require a paid subscription to see the high quality videos. All of this brings up many questions of owner ship, especially when subjects such as DRM get brought into the equation. Is the customer merely renting these videos, or are they actually buying a copy of them. Sure Google's proprietary, DRM-ified version of VLC they ship will let you want purchased videos any time you want, but will those videos transfer to your other machines? Can you watch it under Linux? On your video iPod? no... Sure, they could strictly offer download only services, but high quality standard definition video can take quite a while to download even with a decent broadband connection....just imagine how long it would take to have to redownload/stream every HD video you bought from them... It's not feasable.
This also brings up another issue... I've never posted anything to YouTube myself, so I don't know the specifics, but it would appear they have a limit on resolution and bitrate your video can be posted in, who knows they may do all the transcoding for you automagically. Would a site like YouTube benefit from offering higher quality videos to paid subscribers like the gaming site do? Would it perhaps be considered kosher for them to offer ad-less low quality videos, but have high quality version that have both pre and post ads tacked on? I personally would be fine with that last option. As long as the ads are 30 seconds or less, I could really care less myself. And I think most would probably agree.
There's one more option out there, and that's basically virtual channels. Basically a never ending playlist that would more closely represent traditional TV channels. Basically what you would do is have users or some algorithm group similar videos in a channel. A use could either watch a specific video or just hit random video for that channel, then you would automatically go on to watch another video from that channel after that one finished, and then another and so on. Then random ads could be placed between every so many videos. The closest thing to this idea I've ever seen was the old Yahoo Music Video service (aka Launch)...but I haven't watched that in years since there's still no Linux support. You tube kind of does something like this too I suppose by offereing up suggestions of similar videos afterward, but it requires user interaction, which some may not want to bother with.
If I were Google, I'd probably do a combination of the above. I'd leave regular YouTube usage the exact same way it is now, with the same quality videos. All embedded videos stay as they are, however, if you goto the main site you have the option to watch high quality videos. There you can either opt to have ads tacked on them, or pay a subscription fee to go ad-less. In addition to this offer the virtual TV channel service and you're good to go.
So, now that we have a good source of profit coming in, there comes the need to discuss who gets a cut of that. Google has already started offereing profit sharing with their highest watched videos, which is certainly a step in the right direction. The other problem is that almost every YouTube video out there infringes upon someone's copyright somehow. Just about every video is either going to be a straight rip from a TV show, or a home video with multiple copywritten pieces of music thrown in the mix. And as per usual, everyone wants their royalities. There are a few different ways to go about this. Either Google can sign a massive contract with the big record labels and TV/movie studios that does blanket coverage for any of their content that ends up on the site, or Google can get strict and delete any videos that the author did not get proper concent ahead of time for. The blanket coverage would probably be the easiest...but Google's still reluctant. Why? Well, even though copyright is fairly clear cut in the law books, it's not in the mind of the people. Once a piece of content become wide spread enough, many would argue it partially belongs to everyone. The fans take personal stake in franchises. Combine that with how the average person feels the various industries charge too much for their products, and the situation is no longer so simple.
In this situation, I'm afraid I'm gonna have to say it's better for Google to do the blanket contracts. There are so many videos posted, that it's near impossible to moderate them all, and good luck getting your users to rat out their fellow posters. Really, since Google is just a business, it's not really their place to worry with if copyright laws need to be changed, that's up to the people. And if they're all too lazy and/or apathetic, then they'll just have to deal with the consequences.
However, in light of that it seems that sites like DeviantArt and the ever popular mySpace have an easier time dealing with the issue. On DeviantArt, users are much more likely to report copywritten material, as most of the users take the art they post very seriously. MySpace, now owned by one of the large content producing conglomerations around, News Corp, is very thorough about making sure no one is posting music and videos that they don't have the proper copyright for. I think the number one reason they've been successful here is because so many bands have their own accounts and post their music already. If there wasn't such great support from the bands and their labels to begin with, I'm sure it would be much more rampant.
It's all very interesting to consider. If Google doesn't make the right choices now, they're 1.6 billion dollar purchase may become a major mistake, and someone who gets it right will even surpass the seemingly unstoppable YouTube.