Seems like content providers all over the internet are suddenly attempting to charge for content they used to beg us to watch. Local newspapers, sports, gossip, whatever. All these little tests with incentives to purchase 'premium' content are popping up.
And to put the exclamation point at the end of the sentence, YouTube, that avatar of self-produced, self-induced and self-promotional excess joined the party by announcing it would soon charge for access to certain channels. Holy backyard prank gone wrong (and caught on video)! How can they do this to us?
They can, they being Google, YouTube's parental overlord, because they own it. And they can do what they please, including trying to recoup their investment and then make a profit on top of it. The strategic question is whether the consuming public is ready to pay for the privilege. And the answer appears to be affirmative.
The reasons behind this make sense. They have to do with scale and attraction. As more people have become accustomed, one might even suggest dependent, on internet content, the economics of charging them for it become more attractive as the barriers to resistance fall. What might have seemed excessive five years ago - an indulgence that 'offended' the sensibilities of those who believed the turn of 21st century mantra that content wants to be free - has now become a commonplace. I value it, therefore I'll pay for it. Don't need a landline and not sure I need a TV, but my smartphone, tablet or laptop? I'd sooner cut off my whatever than lose instantaneous access.
We have become acculturated and therefore susceptible to the charming schemes and scheming charms of web content and its providers. There's a whole new business model a-building and money will be made. JL
The Economist reports:
Once a warehouse for pirated clips and amateur footage of cats, YouTube has been trying to transform itself into a sleeker, more sophisticated site that can compete with television for advertisers. It will soon look even more like television. On May 9th announced that it will charge users for subscriptions to some “channels”.
ONE of the most popular videos this month on YouTube, an online video site, is a commercial by a bottled-water firm, Evian. In it, adults walking by a shop window see their baby lookalikes reflected, and start dancing with their former selves. The grown-up YouTube, however, looks nothing like it did in its infancy.
Novice clips have attracted a tonne of views, but not a tonne of money, because advertisers are reluctant to place adverts next to shoddy homemade videos. Since Google bought YouTube in 2006 for nearly $1.7 billion, it has tried to make its adopted child polished, not just popular. Last year it spent an estimated $300m funding and marketing new “channels” with higher-budget comedy, drama and other shows, with some run by established media firms such as Fremantle.
According to Needham, an investment bank, YouTube will bring in $2.5 billion in advertising revenue in 2013, but that is not enough to move the needle at Google, or to make it a worthwhile outlet for content companies. Like newspapers that have decided they cannot survive by online advertising alone, YouTube needs to erect a “pay wall” for some of its offerings. Subscriptions will reportedly go for as much as $1.99 per channel, and could grow to make up 10-20% of YouTube’s revenue, says James McQuivey of Forrester, a research firm. More than 1 billion people use YouTube each month, so getting even a small share of them to pay for content could prove lucrative, and will encourage more content providers to bring their material to YouTube. Videos of cats, no matter how cool, will not lure many paying subscribers; but channels with big, loyal followings, such as Machinima, which specialises in animated programmes and video games for young males, probably could. People are unlikely to cut their cable subscription for YouTube’s channels soon, but if its programming gets smarter, people may spend more time there.
Already YouTube is no longer just for amateurs. DreamWorks, a Hollywood film studio, recently announced plans to buy AwesomenessTV, a YouTube youth channel, for $33m. Jeffrey Katzenberg, a YouTube convert and DreamWorks’ boss, has called it the “medium of the future”. Time Warner, a big media firm, has invested in Maker Studios, which produces videos for YouTube channels.
Robert Kyncl, head of content at YouTube, sometimes boasts that YouTube heralds the “third wave” of programming, following broadcast and cable television. Other online sites are betting that having slick, new programming will attract people to their sites. Netflix has attracted the most attention for its splashy political drama, “House of Cards”, starring a brilliantly Machiavellian Kevin Spacey. But Hulu, Amazon, YouTube, Yahoo and Microsoft, among others, are also putting money into new series and original content. Anyone who thinks channels exist only on television is sorely mistaken.
0 comments:
Post a Comment