| How many video sharing sites
do we really need? This is the question many markets
are asking, as smaller niche sites are still struggling to
formulate viable business plans.
A 2006 study showed what we would all expect - YouTube dominating
the market with over 45% market share.
If we combine Google's total video market share - YouTube
& GoogleVid hold 66.38%.
Signs of a competitor shake down are obvious as two out of
three founders of Revver are no longer with the company.
Likewise, San Francisco-based Guba saw three executives leave
the company recently.
With YouTube now owned by Google, smaller niche video sites
are losing ground, and hope.
So what has made YouTube so popular? Many believe it
came down to three factors:
YouTube's video player - didn't require any software downloads
Providing users with an easy way to upload clips.
According to Hitwise, a traffic-measuring company, YouTube
was the most visited video-sharing site in December 2006,
with 45.9 percent of all visits by U.S. Web users. Revver
was 27th with 0.08 percent of visits, and Guba came in 32nd
with 0.05 percent.
Veoh Networks CEO Dmitry Shapiro admits they don't know if
they can make money through advertising. "We don't know
whether we can do that by serving an ad with every video or
every other video or whether the ads will be served before
a user watches the video or after...The only thing we know
for sure is that we will make money."
Other video sharing sites are desperately seeking way to
respond to YouTube's dominance, by overhauling Web sites or
revamping business models. Many believe the balance will start
to even out as demand for quality starts taking a hold. If
serious website publishers want quality video content, they
have to scrabble through a lot of low quality creations before
they find content of sufficient quality.
The public wants professionally crafted video made available
on the Internet "Among the public, there will be
a flight to quality," maintains Luckett , Revver co-founder.
Three Types Of Video Sharing Sites
There are basically three very different types of Video sites,
each of which has radically different growth potential:
- those with no ad's which will power the future
- those with pre-spin ad's [showing before the video content]
- those with post-spin ad's [showing after the video content]
Pre-spin ads are already on the way out, and post spin ads
are showing little promise. So if the only videos that show
strong future growth, it's hard to conceive how video sharing
sites will generate direct revenue to support price tags such
as the $1.65billion Google paid for YouTube.
Technology is not likely to be the differentiator going forward.
It's more likely to come from customer focused innovation
that adds value to the viewer experience, such as:
- deep cataloguing of the components of all videos, copyright
and not copywritten
- how videos may be 'purchased'
I don't believe that mere viewing will attain significant
income. Rather, the use of video in existing ecommerce and
B2B commerce environments is more likely to be the key. In
fact, one could ask whether selling advertising, as the business
model we know today, is becoming more and more obsolete...
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