Of course, the market has surged over the past year. In fact, almost half of all online videos are user generated. And Screen Digest sees the growth continuing.
The problem? Well, it is particularly tough to monetize user-generated content (UGC). For example, only about 15% of online video revenues come from UGC. Then again, UGC has a good amount of bad content. Also, there is also danger to a brand (if the content is offensive).
True, a company can preview the content. But, what would the cost be?
So, is this bad news for Google's YouTube? Perhaps. However, keep in mind that the company has been aggressive in licensing high-quality content from traditional media companies.
So ironically enough, the big beneficiaries may be companies like Sony Corporation (ADR) (NYSE:SNE), Time Warner Inc. (NYSE:TWX), The Walt Disney Company (NYSE:DIS), and Viacom, Inc. (NYSE:VIA).
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide go Decoding Financial Statements.
1. This is a shaky relationship that has potential to be both profitable or eventually a nightmare for YouTube and Google.
Some media companies have 3 full time employees a day filtering manually through YouTube and making tons of requests to take the content down.
That and the slowness in providing the promised content filters is not adding a lot of good will to the mix.
A lot of this depends upon the media companies and how long they're willing to wait and how much they value the revenue that YouTube could eventually provide them with.
Posted at 2:18AM on Jan 16th 2007 by Gary Bourgeault (thealphamarketer.com) 0 stars