“We lose a little on every sale,” said the fabled used-car salesman, “but we make it up in volume.” That seems, as well, to be YouTube’s strategy at the moment.
The Google subsidiary has yet to figure out how to make money on the Twinkie-sized videos it sends over the net, but its international expansion is apparently going gangbusters. At least, that’s pretty much all that Steve Chen wanted to talk about in his appearance at the NewTeeVee conference this week, according to Chris Albrecht: “Despite the significant hurdles YouTube has yet to overcome – including a billion-dollar lawsuit, a new copyright protection system, and the question of how to monetize its massive amount of content – co-founder Steve Chen’s focus was on the international market. During his talk, he kept reiterating YouTube’s global plans.”
Chris Nuttal, of the Financial Times, says that Chen’s refusal to discuss the big challenges his company faces merely amplified the “palpable atmosphere of dissatisfaction with YouTube” that prevailed at the event. “The lack of monetization on YouTube today is astounding,” groused one venture capitalist. Mary Hodder, of Dabble, noted that YouTube’s market dominance seems to be eroding as the online video market fragments: “She cited how six months ago she surveyed videos being referenced by Digg members and found nine out of 10 were sourced from YouTube. Now only one out of 10 were from Google’s $1.65bn acquisition.”
Nuttal also reports that an audience member heckled Chen over the lousy quality of YouTube videos, shouting “HD! HD!” during his talk. Another onlooker quipped, “Someone scream out ‘Better Content!’” To add insult to injury, Nuttal compares Chen’s haircut to the infamous “quiff” worn by the North Korean strongman Kim Jong-il.
When it comes to the bottom line, Google appears to be flailing at the online video business. It’s already abandoned its attempt, through Google Video, to charge for content, and its YouTube ad strategy seems to be going nowhere slowly. The big question that has hung over YouTube since its inception has yet to be answered: “In a two minute video, where the hell do you stick the commercials?” Maybe there is no good answer. Maybe NewTeeVee is just a rerun of OldTeeVee, except even dumber and a whole lot less profitable.
May I interest you in a 78 Pinto?