In yesterday’s post about Glam Media’s new online video platform GlamTV, I mentioned how the popularity of online video has so far failed to turn in to massive profits for the companies involved, and that is the greatest challenge to overcome now.
Fast forward a few hours, and an interesting post appear on TechCrunch looking at the same issue, but focussing on YouTube, and how it is building a huge market dominance but how the business of profit is failing with it.
Market Dominance
The article cites statistics that show YouTube now accounts for 37% of all videos viewed online and about half of the audience, this is courtesy of ComScore figures.
However, despite this absolute dominance the profits YouTube make are small. Okay, $200 million estimated profits this year aren’t small, but comparatively speaking, they are out of sync with the amount of traffic coming to the site.
The money it does make comes from Google adverts, but there’s definitely a feeling Google are holding back from properly turning YouTube in to the money-making behemoth it could be.
More Revenue On Way?
I think this could be about to change though. Google are pushing AdSense for video, and the more YouTube becomes a dominant force on the Internet, the more ways of making money Google is going to think of.
After all, Google do have to justify the $1.65 billion they paid for YouTube somehow. It’s more a question of when than if, o and of course how.
