What MTV says about Google-YouTube marriage

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Google executives provided no details on their YouTube integration plans when they announced their $1.65 billion stock acquisition of the popular video Web site on last Monday.

But experts agree that Google must resolve differences between the user-generated content model YouTube has pioneered and the licensing model that portals, including Google, have aimed for, experts said. Traditional brand advertisers, the kind that advertise on television, may be reluctant to buy ads that will be shown next to videos of teenagers playing air guitar and surfers getting attacked by sharks, they said.

Google has proven it can license content from large media companies, but that kind of licensing goes against the YouTube content model of "for the people, by the people," Reilly said. "There are certain types of advertisers that will not be willing to put their commercial in front of YouTube content."

Google will also have to deal with the legal issues posed by YouTube users who download copyright content, for instance from "Saturday Night Live," onto the Web site. "There's a lot of copyrighted content on YouTube now, and that's been one of the reasons they have been reluctant to place ads," said Tom Bedecarre, chief executive of AKQA, an interactive marketing company.

No doubt Google was willing to pay so much for a company that had yet to make a profit in order to serve up ads to the millions of people visiting the site every day. For advertising, the online video market is seen as the next frontier, after search, which Google has dominated. Spending on online video in the U.S. is expected to rise from $385 million this year to $650 million next year, and $1.1 billion in 2008, according to eMarketer.

Brian Monahan, a senior vice president at the Universal McCann ad agency, speculated that Google would turn to ads that run before a video, which he said costs advertisers double what even television ads do.

"You've got somebody who just requested a piece of video content. You have their full attention," Monahan said. "People can multitask. They can keep watching the video, and if they are intrigued by the ad they can click on the (display) ad next to it." Because of the accompanying video ad, the click-through rate of such ads is three to four times higher than simple banner ads, he said.

In addition to Google having to hammer out how to combine its advertising platform with YouTube's video platform, the search giant will have to develop a melange of new ad forms to satisfy shifting demands of consumers and advertisers, ad executives said.

"Ad formats will have to evolve to take advantage of that change," said Adam Gerber, director of media strategy at video distribution company Brightcove.

Added Dorian Sweet, executive creative director in Tribal DDB's San Francisco office: "What all of this is missing is that video can be interactive. It's still a lot like television; it begins and ends."

CNET News.com's Stefanie Olsen contributed to this report.

[herkamur]

here come the ads

First let me start by saying that the day Google inserts pre-roll ads before my video content is the day I pull my content and post it elsewhere. I can probably live with ads displayed UNOBSTRUCTIVELY on the page. One of the features of YouTube that I currently make use of is the ability to embed my videos in another site or page. Unfortunately I fear that Google will pull that feature since they cannot place ads that way without a pre or post-roll video.

I'm so sick of advertising. People are inundated with it every day. We cannot escape the advertising littered all over our environment. One one hand I realize that services need to be funded. Users have to realize that they have two options (for the most part): to accept some advertising or to pay for the service. However, there also needs to be balance. The ads cannot be so obtrusive as to hinder the usability and enjoyment of the service.

Just my thoughts. Your mileage may vary.

[aSiriusTHoTH]

agreed

No, I agree with what you are saying. There needs to be a balance, a ton of ads tends to be annoying.

I think the whole content with ads thing will backfire and this is bad for Google as i'm sure this was one of the main reasons why they bought YouTube, hundreds of millions of vidoes to put ads on.

I think when a lot of ads come, people will go elsewhere. There are thousands of startups that just in a few or so will be at the YouTube level.... Web2 is definitely here...

[wartickler]

Lifetime Membership

How cool would it be to get in on the groundfloor of this as a members service?! Yeah you can post free videos but say you want to link to your site?...membership strips leading ads! Or, maybe instead of leading ads they could have trailing ads instead...gives you the option to close it but also plays out if you don't touch anything...I happen to do three things (at least) on my machine and would probably see a few ads at a time... maybe...

[bcaulfield]

Nice story

wow.

[Jim Hubbard]

Holy God! What happened to CNET?

First it was the less informative, "but, gee, it's pretty!" interface change, and now the horrendous talkback interface changes!

Notice that there is no way for us to vote on these changes, and for good reason - they suck.

Read it now....it;ll surely be deleted soon.

[Jon Skillings]

Send in your feedback

It's not voting on the changes, exactly, but you can click here to speak your mind about the new look:

http://news.com.com/2030-12_3-5869813.html

[wartickler]

Monetization of Eyeballs

I was under the impression that Google made some copyright deals with other networks as well and was going to bring YouTube under their copyright umbrella to protect themselves. How does Fox and MTV feel about YouTube? Sure, it was a great site that didn't make money and broke every conceivable Intelligent Property concept on the books...can Google bring it into correction? I would think that ANY monetization of YouTube is a step towards making it a legitimate video site. Yahoo! and MSN are the only other real contenders in the video arena and they both apply advertisements to their video lines.And, Google is now in a position to steal the show with the number one AND number two slots handled. I like Google for this and all the other companies it's acquired. Smart move to conglomerate one and two into the absolute king of video. Booyah!

[i_made_this]

I'm convinced GOOG will opt for post-roll..

..beyond all the licensing & copywrite mumbo-jumbo which you know GOOG's legal team has already addressed pre-purchase of YouTube, the issue boils down to sticking with the single key feature GoogleVideo AND YouTube offer which differentiates them (and MySpace for that matter) from MSFT & YHOO's product: click and link without an annoying pre-roll ad. Yes, they'll probably monetize this by sacrificing the degree of ad revenue in favor of the far more attractive post-roll. Users can watch the show and kill the damn post-roll ad.

I suspect GOOG's next eyeballs buy may well be MySpace. The strategic relationship between them is strong to begin with. I would've liked to be a fly on the wall at the Schmidt/Murdoch meeting behind closed doors last week. We can rest assured that the two kings of their domains need not have met mano a mano about any old business matter.
MySpace won't come cheap like YouTube did for the obvious reasons. GOOG is paying for all of these assets in stock anyway, so it's quite not the "huge" cash price melodrama issue ppl are making it out to be.