Saturday, February 19, 2011

How Google could kick-start video monetization by applying the One Pass model to Youtube

There's a lot of buzz this week about Google's launch of One Pass, the content subscription service they've created to compete with Apple's new subscription service for the Ipad and the Iphone. Details on the services can be found here in a concise Apple Insider summary; the main difference between the two services is the fact that Apple is charging publishers a 30% fee to process a subscription vs Google being content with 10%.

Apple's position reminds me of the cellphone carries in the US who have effectively destroyed the ringtone, chat and other subscription businesses that relied on carrier billing by charging an average of 40% subscription fees. Such services are thriving in Europe, South America and Japan where carriers typically charge between 5% and 10% for billing services.

IMHO Apple is wide off the mark in terms of the revenue share they're looking for but that's not the topic of this post; As someone working in the online advertising and monetization space, I'd love it for Google to extend this approach to Youtube: instead of charging very high minimum rates for in-stream and overlay ads, why not charge content producers a low percentage (10% ideally, maybe more) in exchange for lettting them monetize their own inventory? I think this could kickstart revenue growth at Youtube because you would empower all publishers to make money on their inventory - not just a select few who can command the premium CPMs required to meet Google's minimum rates. 


Posted via email from digbits's posterous


My Personal DNA

Template Designed by Douglas Bowman - Updated to Beta by: Blogger Team
Modified for 3-Column Layout by Hoctro