YouTube will unveil a number of custom branded commercial channels tomorrow in its latest move to monetize the site. The bizarre cultural icon Paris Hilton is already highlighted on the front page of the site with her own YouTube channel, to correspond with the release of her debut musical album on Tuesday. Fox has paid an undisclosed sum to advertise its TV show Prison Break on the YouTube channel of Hilton, whose album is produced by Warner Brothers. YouTube reportedly pays more than $1 million each month in bandwidth costs and some people have been concerned that it would be a challenge to turn its huge traffic into money. Thus Paris Hilton to the rescue.
Robin Bechtel, head of new media at Warner Brothers Records, told the Financial Times tonight that Paris Hilton and YouTube were a natural fit. That’s hard to argue with. Hilton’s channel on YouTube contains 13 music videos, a promotion for Paris Hilton cell phone ring tones and custom branding that looks much nicer than the standard YouTube page design. Other branded channels haven’t been identified as of midnight.
YouTube was launched in February of 2005, has raised at least $11.5 million from Sequoia Capital and reports that it delivers more than 100 million videos each day. CEO Chad Hurley said last week that brand driven advertising was of more interest than ads inside of videos and today we get to see that strategy in action. The company said last week that it intends to host every music video ever made within the next two years.
Custom branded channels may create a sufficient partition from the parts of the site filled with copyrighted content and thus command higher ad prices. I’ll be watching the Paris Hilton channel closely and will report further details as they become available.
Hopefully they will start making so much money that they will be able to have IPO one day.
Sorry, but this is lame. You can say Paris Hilton from now till the next Oreilly confrence, but the content is plain useless PR. And that “word from our sponsors” there, it’s plain useless. The users won’t care.
If YouTube wants to make money, it should start selling ads. 3-5 second video ads in the beggining and ending of each clip. The users won’t mind the short commercials (especialy if they are funny and attractive), and the sponsors will get the best ad slot possible. YouTube can make some kind of premium bundle, and put the sponsor’s banner along side of the player.
I just don’t get the “How can to monitize YouTube”. It’s like the most monitizable site ever.
No, I think you’re totally right about the monetization potential - it’s just a mystery as to exactly how they are going to do it. I think you’re wrong about the ads in the front of the vids - I think users would likely get annoyed with that on a site where they click through a lot of videos in one session.
I think they should start a BoobTube section, where they can put the Paris Hilton (and othe risqué) content on.
“I’ll be watching the Paris Hilton channel closely”
It’s a tough job but I’m sure Michael is the best guy to stare at Paris Hilton closely for a while. Keep it up! (I mean the good work!)
What happenned to my comments (2) ?
Given that I’ve never visited YouTube and never particularly wanted to watch people’s home-made movies the addition of Ms Hilton would just give me less reason to want to see the site.
Can Paris Hilton boost YouTube?
More like reduce YouTube, I cant stand her - White Trash
I’m not sure about the comment about “The company (YouTube) said last week that it intends to host every music video ever made within the next two years.”
Isn’t this getting away from the aim of the website: Broadcast Yourself?
I agree with the other comments re monetization, show ads in the videos but not as additions to the site. What’s to stop someone like Sony coming along and starting there own online music video website? Sure, YouTube should exploit music/TV but they shouldn’t rely on it as there only revenue stream as they could alienate their userbase.
Revver videos like ZeFrank have ads at the end, which seems like a fair payment to me.
I think this and the music videos is about having a ’safe’ space where brand advertisers know that their copy will be next to professionally produced content, as opposed to the user-generated items they can’t control and are uneasy about.
Adverts IN videos seems to be the obvious solution to everyone except youtube.
They need to treat it like TV.
There’s a more in-depth article about this at the LA Times (http://www.latimes.com/business/la-fi-youtube22aug22,1,2327134.story) [registration required].
YouTube does NOT pay $1 million in bandwidth costs/month.. that’s just stupid to say.
Creating custom channels to generate cash is not the right way to go. Also, inserting ads in the beginning/end of clips does not fulfill any purpose. What they could do is that find out which category videos, like porn, are viewed the most and place ads in those categories only. I am pretty sure both the advertiser and youtube stand to gain a lot from this kind of advertising.
TechCrunch still does not grasp youtube, which *is* the most successful Internet company ever. $1-2 B is the current fair market valuation, and you are still trying to figure out how the company will survive.
Andy: that’s an astute observation. They are indeed moving away from “broadcast yourself” to “broadcast them.” Now that they are apparently trying to become a distribution channel for the major media companies, they’ve lost sense of their core mission and what made them popular in the first place. Perhaps they’ll be able to become profitable doing it. But it indicates that they are unable as an organization to come up with a way to monetize the business that made them successful and they are risking becoming just another online video distribution channel for big media.
Wow Paris Hilton has had a tv show, been in movies, made an album, and even dated a Backstreet Boy. Of course it would only be fair to give her a channel. I really liked YouTube before, but Paris really has no talent. Luckily for her she has a rich daddy and a willingness to do anything.
Fox’s Ad inside Warner Bros. Channel???
YouTube is over-monetizing these channels by running third-part Ads, despite their obvious brand ownership to the channel creator.
The fact that Warner Bros. don’t have a problem with this behavior doesn’t remove its unfairness, I bet other advertisers will have a different saying about that.
I’ll be watching Paris on YouTube too. You should post up the best clips.
Stupid remarks aside, I don’t see how 1 Paris deal can turn around the hemmeraging of red at YouTube. It’s not scalable to ink deals like this and doesn’t cover the bandwidth costs associated with all the free loaders watching videos at all ends of the “tail”.
Google needs to come out with a contextual video product that can analyze/match video content to video ads.
A lot of people (including me) use YouTube mainly to store their own video clips and spend very little time watching other people’s videos. Those strictly personal uses alone generate millions of clicks for YouTube, which is an advertising gold mine.
Those who claim that there is nothing to see on YouTube is missing the point — millions visit YouTube just to check out their own shticks, and that is good enough as a business model.
Marshall is right, in-video ads are annoying. Other less important video sites have used the model, to their own detriment. Setting up “Paris Hilton” (or for that matter, “Bombay Motel 6″) channel is smart — if you’re over at YouTube uploading your own videos, minding your own business, you can choose to click over to watch the thin blond, or not. The point is: you, the customer, have the control, which has been the simple principle of success of YouTube.
I give YouTube another year before its shut down, as copyright violations are quite evident.
>>TechCrunch still does not grasp youtube, which *is* the most successful Internet company ever.
this is the funniest shit every….cause it doesn’t even make a profit…like say Google, Ebay, Amazon….
its successful cause its has lots of crap videos on it…especially of teenagers trying to be cool.
Obviously YouTube has a lot of watchers and despite what TechCrunch readers (or commenters anyway) believe, a lot of people watch Paris Hilton’s TV shows, buy her albums and read magazines with her on the cover. I think this is a great direction for YouTube and hope it is the start of the trend towards profitability. I agree that ads before a clip would be annoying, and would probably drive many users away, especially with the way the site is used by a lot of us: watching short clips (
How much transfer do they do in a month?
*Clearly* Ms. Hilton was the missing link on YouTube’s revolutionary evolution to huge profitability and success. Her charm, wit, and intelligence will be no match for the sad and stale fare on other video distribution mechanisms. Where can I sign up to invest?
Interesting move. I just wonder how much these channel owners are paying. Still alot of ground left to cover monthly costs. Hard to imagine this sponsored-channel-type stuff generating $15-20MM/year to cover estimated costs.
It does appear that YouTube is willing to dilute its own brand to support branding efforts of other. I’m sure over time, things will evolve into a “powered by YouTube” co-branded marketing solution. Also kills the viral aspect of the service - I’m not sure people will forward Paris Hilton-type staged clips.
The game’s afoot, as they say, and it’ll be interested to see where it ends up. Personally, I’m still a skeptic. As noted above, this strategy does not scale well (in terms of simultaneous front-page channels) since only one will be featured at a time. More than one, then it gets too blatant and will turn people off from the site.
Jay. Stop dreaming.
Nice market capitalisation. Between $1-2 billion? Thats a very broad figure you have there.
The fact is the minute YouTube puts advertisements on copyrighted content, they are screwed. Lawsuits will be flying hard at them.
So if they choose to go down this avenue, they will have to take the copyrighted content down and there goes 75% of the hosted video, leaving YouTube looking pretty bare.
Is YouTube worth $1-2 billion? No way. Not until I see a revenue model.
Would I buy YouTube? Yes of course. The revenue potential is absolutely huge. People are watching this stuff.
YouTube attracts wide range of audience. On the most popular page, currently mostly you will see young crowd trying to look cool and do cool things.
However, there are lots of other ways people use it.
-Sharing personal video’s with friends and family members.I have uploaded first video ever to YouTube. I upload few clips of my kid every month so that my other family members will see.Similary they do of their kids or any other functions.
-lot of education stuff.
- lot of DIY stuff
- Tutorials.
-music videos
-news videos
-blogging videos
-Most importantly , side videos people take at games, events - nowhere you can fine these.
I think YouTube potenial is endless. i donot know whether they are worth $1 billion or $2 billion or whatever, but I seem them as google of online video. I like their channel concept - innovative.But they should keep on innovating. Other than providing the bandwidth, they should continue to innovate on the core online video technologies - for more flexible, better viewing etc.
Pathetic that youtube needs a retarded bitch like P.H. to boost their revenue. Masses are asses.
i don’t know if PH will boost youtube, but she boosts me!
http://www.addictos.net
GO PARIS:
http://www.youtube.com/watch?v=iZHN8qVpXls
OOPS…WRONG VIDEO…TRY THIS ONE…
http://www.youtube.com/watch?v=F88gf5iBOdA
BAH!!! !! !! ZOMG !!!!! YouTube + Paris Hilton = TEH ABOMINATION. Kill ‘em. ’nuff said.
Nice day, cool!
Help me redress the balance and get the Great Paris Hilton Experiment off the ground! Simply visit http://www.24hourtrading.co.uk/blog/?p=42 for details, or you can simply copy this page and link the words Paris Hilton Experiment to the page.
Paris Hilton was the most commonly searched term on Google in 2006. There’s something clearly wrong with that. Lets undo this anomoly!
All the best,
Rob
NEVER underestimate the power of social networking
Help the Paris Hilton Experiment end this madness!
Visit http://www.24hourtrading.co.uk/blog/?p=42 to see how.
Or copy this page and add it to your blog.
Tell your friends, Paris Hilton is bad for the world. Fact.
All the best,
Rob
NEVER underestimate the power of social networking