YouTube’s business plan — revealed

News:  Here are my preliminary thoughts on YouTube’s business plan, i.e., how it hopes to make a profit.

1.  Continually attract millions of viewers, users, and video creators to YouTube

2.  Join forces with Google to incorporate YouTube videos in all basic Google searches (thereby helping to serve No.1 priority above), and to deploy Google ads on YouTube’s site.  (Because of potential secondary liability under copyright law, Google ads can’t be fully integrated on YouTube, particularly not with videos that constitute copyright infringement).

3.  Strike revenue-sharing deals with key “partners” of YouTube who are under contract with YouTube and who supply content to YouTube; such quality content more likely to generate views and more desirable for ads

4.  Deploy sleek ads within and at bottom of select videos (“InVideo ads”) created by YouTube partners (some individual creators and some corporate creators).  This last prong is what YouTube is testing out right now, and what YouTube is banking on.  Higher click-through rate for these ads means YouTube can charge more for these ads than regular Google text ads.

YouTube shuts down InVideo pop-up ads in YouTube videos

News: As far as I can tell, YouTube has shut down the InVideo pop-up ads that it started deploying back in July. I can’t find the pop-up ads anymore on the partner YouTube videos that first had the ads, such as LisaNova, Smosh, and My Chemical Romance.

Analysis: There are several possibilities about what YouTube is doing: (A) YouTube’s rethinking/reworking the ads in light of YouTubers’ mostly negative comments submitted on YouTube’s blog; (B) YouTube’s afraid of VideoEgg, which claims to have developed the ad technology first and applied for a patent on it; and (C) YouTube’s just gearing up for a full deployment of InVideo ads (the earlier ones were a test run).

I think the correct answer is probably (C).

Meanwhile, a Google rep is quoted in papers today touting the success “hit rate” of the InVideo ads, which get “between five and 10 times as many” clicks “compared with the number who view regular display ads — banners or boxes on Web pages.” (More)

Australian PM Howard makes YouTube video to ask for good behavior before APEC meeting w/ Bush

News:  Downtown Sydney near the meeting place of the APEC conference already has been fenced off.  Now, Prime Minister John Howard has posted this video on YouTube to explain all the security and discourage any violent protests. 

As the narrator on the video remarks, “Violent protesters will most probably target APEC. There will be other protesters who will do so peacefully but for those who don’t and seek to disrupt APEC, there will be significant policing and security responses taken.”  (More)