Music was the impetus for the MySpace explosion and now YouTube and Google are both getting ready to leverage music as well. YouTube says it’s aiming to put every music video ever made on its site, a move that would take it further from both its genesis as a site for home made clips and a magnet for copyrighted works. EMI and Warner have confirmed that they are discussing the prospect with YouTube, acording to Gigaom.
Presumably a stockpile of legal content would raise the price YouTube could command for advertisements on the site, but licensing the content could be an expensive gamble for a company already spending an estimated $1 million each month on bandwidth. The company says it wants to provide every music video ever made within one to two years. That could be very expensive.
YouTube has raised at least $11.5 million from Sequoia Capital. CEO Chad Hurley said yesterday that the site is already making “significant revenue,” and is more interested in brand driven advertising and mobile extensions than in search driven ads or combining ads and video clips.
I question whether music videos will have the driving power that viral video has for YouTube; staged, familiar footage seems likely to be watched once and unlikely to be passed on to others.
Meanwhile Google unveiled today their own music play, focused on analytics. Google Labs has launched Google Music Trends, a section of Google Trends tracking music listened to by users of Google Talk in iTunes, Winamp, Windows Media Player or Yahoo Music Engine. It’s an opt-in system that tracks both individually and in aggregate. The listings and search results are all accompanied by opportunities to purchase music. Google Trends was launched in May, along with the other projects like the Google Notebook and Google Co-op.
Recommendations seem likely in the future and I wouldn’t be surprised to see Google take Music Trends beyond Google Talk and challenge the business models of companies like Pandora, Last.fm, MyStrands and others. Just today we saw another calender company drop out of the running, with the entry of Google Calendar widely cited as a factor. Users cannot currently listen to music directly through Google Music Trends.
To me the Google Labs experiment seems smart, while the YouTube music video strategy seems risky. It’s also not a sealed deal, or series of deals, by any means.
Comments
All 45,000 Google Talk users will provide deep statistics about the music trends of a fraction of a fraction of a fraction of the world.
Why on earth do people keep bashing YouTube for not having a business model?
$1,000,000 a month is a CHEAP investment considering the prices being thrown around for social networking sites and otherwise.
What are eyeballs truly worth these days? Google just forked over $1,000,000,000 to MySpace for eyeballs, and regardless of all the hype about PPC search-based advertising, when YouTube finally stops pandering to people with the “no commercials” policy and unleashes an awesome format for rich-media I’ll be the first in line to purchase to promote my projects.
YouTube is serving 100,000,000 videos a day right now. They are JUST getting started here!
Even if they inserted a “blink” commercial format of 5 – 15 seconds in front of content, and a banner at the end of video content most users would still watch and love the brand, especially when you have big music & entertainment lining up.
Slap together a nice content / secondary site “affiliate” fee of some nature and you have a ton of valuable real estate.
Somebody check my math – if they have 100,000,000 videos watched a day, at let’s say an average watch time of 1 minute (and get to pepper in 15 seconds of advertising per) doesn’t that mean 100,000,000 commercial plays a day?
Right now I “pay” 2 minutes of commercial time for each 8 minutes of traditional or cable TV that I watch, or 6 minutes of ads per 30 minutes of programming.
If YouTube really does = 1 minute average clip and 15 second programming format they will wind up matching that format exactly.
So $1,000,000 a month to own the biggest video network in the world with the added benefit of real-time user interaction & metrics to please advertisers, zero-cost (so far) content fees, etc? Not to mention tie in deals, sponsorship, and the YouTube property itself?
I’d take it. And you know that “substantial” revenues may actually be catching up to support their growth. Keep in mind sites like “plentyoffish” that pull $100k+ a month on adsense alone without a real media sales dept. pulling money from cash rich Madison avenue firms.
Am I missing something? Why is YouTube such a bad aquisition? Sure there will be some content squabbles but it looks like “big media” learned their lesson - crushing napster was a mistake that only made it harder to consolidate and monitor file sharing. Why not pick a dark horse this time in yahoo (which things like this article turn into a plausable solution w/partnerships to distribute video content in exchange for shared ad dollars).
Zack L works for YouTube.
UK based Technology blog, sorry for the spam, but as you guys know it has to be done
http://www.philipaustin.co.uk
Hope you guys like the news we get, soon we will be producing podcasts/ video reviews. Also notice no advertisments, its all out of pocket for our love of everything IT
Cheers guys, hope it’s not that bad it’s classed as ‘delete’
We
The YouTube move to attempt to go “mainstream” could be a huge mistake. The problem is that the entertainment industry has already let Apple know that no one is going to have a monopoly on their properties.
So when YouTube becomes simply another distributor of downloadable mainstream videos, what will keep it from becoming a company with no differentiation from another one offering movie or TV downloads? This is a risky move base upon that alone.
“I question whether music videos will have the driving power that viral video has for YouTube; staged, familiar footage seems likely to be watched once and unlikely to be passed on to others.”
Honestly now. Do you really have to question that?
Why do I feel YouTube’s CEO just got done reading “The Long Tail” and came up with this music video idea..
In any case I think it’s a great idea. The old music vids seem to be pretty popular on YT.
Music Videos and Movie Trailers are the least common demoninator for Video Portals (like YouTube). Every video portal out there since 1999 has such content already. Music video clips don’t have much value. Sounds like YT is flailing it’s arms to court professional content owners.
All YouTube has created is a strong brand with a lot of awareness (with at least people who don’t pay for things). Ultimately, it comes down to how much value a brand name is to an acquirer. A billion for just a brand? No thanks.
@Zack: YT gets “bashed” because it’s loosing money at a crazy rate and therefore becomes the poster child for a Web2.0 “bubble”. There is *no* demand from advertisers whatsoever for pre- or post- roll advertising for user-generated content. Zero. Zilch. That is why YT is saying that they are not seeking in-stream advertising based on tags. Also BTW, YT is not the biggest Video Network, it’s actually ranked 3rd.
YouTube aims to be like an “online warehouse” for music videos. Here is one likely scenario: you miss seeing that old Culture Club video, click on the link and YouTube serves it up for you, along with an ad, and if you click on the ad, the ad company pays YouTube, and YouTube pays the record company, and then the record company pays into Boy George’s retirement fund.
I hear the guy is not too crazy about his new career as a sanitation worker.
“Recommendations seem likely in the future and I wouldn’t be surprised to see Google take Music Trends beyond Google Talk and challenge the business models of companies like Pandora, Last.fm, MyStrands and others.”
I may be proven wrong, but the momentum, community, and data behind last.fm will be tough to quell. Many people (myself included) use it as others use MySpace. Surpassing last.fm would require a serious commitment to that end, and a degree of specialization that seems uncharacteristic of Google.
Then again, maybe I’m just bitter about the potential fate of a service I’ve been with for so long.
Of course this was coming!
Status Killer is a response. A defacto manifesto, perhaps. A place to vent your frustrations on the hollowness of American culture. It seems that there are so many websites, blogs, and publications out there either praising or ripping apart American culture, from an outside perspective for monetary gain.
We are different.
Our goal is not to praise or rip apart American culture for the sake of turning a profit. We are hear to address dangerous contemporary issues which have captivated American society and pushed us down a very slippery slope.
Status-driven consumerism, celebrity fanaticism, environmental degradation, abuse of political power, and the financial exploitation of the masses are just a few of the problems we face here.
At no time will we advocate one political party over another. All will be criticized equally. If there are good things to be said, so be it. If not…too bad.
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At one point in American history the media served as a whistle-blowing organization dedicated to the well-being of the public.
Let’s bring those days back.
Myspace, Youtube: they are abominations.
I love music videos @ http://ifmv.blogspot.com/
USuggest.com allow the bloggers to make some extra money through recommended products directly from within their blogs, and hopefully directing their readers to the some online retailers. As such, the respective blogger would receive a commission from any sales generated through referrals!
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