The business model of videoblogging is hazardous but is yet another database race... and a major one this time. Not that I don't personally believe or rely anymore in the overly misused Adsense program, but we are talking serious operation costs here.
Compared to websites similar in unique visitors / page views, Youtube (and others of the same kind) use huge amounts of bandwidth, surpassing many (if not all of the) other major platforms. It has been said that the hosting costs of Youtube have been estimated at a staggering 1 000 000$US / month with its 40 000 000 short videos servings / day, and they are not showing any sign of slowing down. And this doesn’t include the 25 people it employs and any of their marketing efforts. Hitwise reports that it has reached approximately ~43% of the videoblog audience, far ahead of MySpace (24,2%), Dailymotion, iFilm, Google Video, MSN Video and Metacafe.
So what else? What revenues can you generate through a videoblog? You can still have sponsors and partners which will advertise on your site, but is that enough? Can a videoblog stand on its advertising/partnerships revenues? I don't think so. Most of the major videoblogs are on steroids right now, living off their VC funding. From what we've been looking at in the past weeks, I have yet to see a smart business model for medium or large scale niche markets videoblogs...
What are your thoughts? Is the videoblog industry diving into a death trap, or do you think that those database giants will find a new way to live on their own? Share your thoughts.
From what I have seen, video blogs are for hobbyists, tend to give the vibe to the viewer of "I have no life / too much time on my hands..." And the very best of the video bloggers seem to stand a shot at being in a couple commercials, a music video appearance, or a character in a sitcom or reality tv show... The video blog itself may be a traffic drawer... but not much of a bread winner. That could change one day though...
i appreciate your feedback
There are multiple ways to make money with your video, depending on how you think of it. Viral video, selling through video, advertising on your video, brand awareness, advertising on your site... Maybe even product placement if you get creative enough...
It may be kind of early, but I can defintely see vertical video blogging where experts in their verticals can create videos on topics in their verticals and send people to their site for more info ($), and/or to other peolpe's sites for more info ($) (like ZDnet whiteboards). Its not that the technology isnt there as much as the people arent caught up yet. Put 1000 people in a room and ask them how many have ever seen a video blog.
Somewhere online there was talk about the relationship between tv and internet and how you could be watching stuff on your tv, the media/tv company knows your demopgrahics and what you like, and then you're served up similar content online in the form of ads from the same media/tv company or their partners.
That said, imagine if top search engines collaborate with top TV networks (which is (klunkily) happening). You're watching American Idol and they promote online video blogs of the top performers (and the worst performers) over a few of the most greuling weeks for them. You watch American Idol and you also watch Sopranos, Family Guy, and The Office religiously. You go to your computer and look up Soul Patrol's online blog and Sopranos, Family Guy and The Office ads touting next week's episodes are dynamically inserted in the slots of advertising you get either layered on top of the video you watch (advertising before or during), or on the page(s) where you get your video from...
Laura, here's what will happen: Before you even realize it, you will become a part of your computer. (Damn, that already happened but I don't fit in).
I feel some kind of nasty convergence... Wasn't Internet supposed to stay away from that
You're right Guillaume - I think I HAVE become part of my computer...(scary movie music goes here) :)
Like anything else, I suspect there will be a few big players in video, and a lot of niche players.
Not everyone can be a YouTube and front millions in hosting fees, but if we've learned anything over the past 10 years it is that entrepreneurs end up chasing the long-tail, and users who value video will be increasingly loyal to those sites. Marketers will follow these advertisers because so many users will be flocking to video sources, and these users will segmentable via site-registrations.
Video is the future of the Internet. As broadband becomes even more pervasive, and as server space and bandwidth becomes even cheaper, I am absolutely convinced that a business model will emerge. Businesses that care about brand will take their advertising dollars from newspapers and TV (as they are doing now) and will put it online where they can target customers more precisely. And regional businesses will follow-suit as well.
Yahoo's launch service has an annoying 30 second advertisement that you must watch before viewing any of their music videos. You can pay for a subscription that allows you to bypass this. Youtube and others may follow this same advertising/subscription model.
With such a huge recurring monthly cost to keep the service running, I doubt they will stay in business unless they find an alternate revenue model to work with the existing one, I highly doubt their revenue from advertising is covering their running costs.
So to answer your question, I do think their diving into a death trap, I cant think of a way they can generate revenue other than advertising, unless they comeup with a way to insert video ads in the blog videos or something.