Wow things have really moved on for YouTube. One time advertisers had little interest in the video sharing site and now they are fighting to own the video site’s homepage, which means a profit ahead as revenues leap.
Advertisers used to be worried about being associated with some of the inappropriate content that you can find on YouTube. Not it seems anymore according to this Adage piece.
YouTube’s home page sold out in the fourth quarter and film studios are now biding for space on what is a prime piece of video real estate to promote their latest movies.
Lionsgate and Twentieth Century Fox are among the studios that have embraced it. And what they have embraced is a site that is estimated to be serving as many as 1 billion videos per day.
Twentieth Century Fox bought the YouTube homepage in 15 countries for ‘Avatar’ to drive traffic for the trailer. Well something worked (clearly being a mega budget 3-D extravaganza helps).
Last week alone YouTube’s advertising partners accounted for 44.7% of the views among the top 100 videos, compared to 36.3% six months ago. That’s quite a change.
The piece quotes YouTube Ad Director Shishir Mehrotra, saying: “When I took this job a year and a half ago, people kept asking ‘What is going to be the equivalent of the Google text ad for YouTube?’. What we realized is there is no one ad format for video, because consumers come to YouTube to do different things.”
The piece makes a very good point in comparing it to MySpace circa 2006. Everyone talked about MySpace being the place where entertainment advertisers went. That was only a year after Rupert Murdoch bought MySpace for $580m. Now it’s worth…oh way less. Is it on a road to profit? Well it is on a road at least.
YouTube seems to have triumphed even as the market has become more competitive with the likes of Hulu and others taking a share of its market. It has been helped by more and more professional content being uploaded onto the service much by media companies and advertisers who have become adept at establishing their own channels.
What does all this mean in hard numbers? Well last month All Things Digital reported Barclays analyst Douglas Anmuth saying that YouTube will see a revenue jump of 55% to $700m in 2010 and that it will “start contributing positively” to the Google’s earnings. I think that means the long road profit has almost been reached.