This past Saturday I went to a digital media forum discussing how to navigate the shifting landscape of digital media ecosystem. We always learn how digital media seems to benefit and connect users like never before--enable users to communicate wherever we are and whenever we want it. It is interesting to hear the discussions on how to utilize this benefit and create a viable business model that ensures a win-win situation between consumers and businesses. This makes me further ponder on the example of Youtube.
There are still enormous controversies and debates over the business model of Youtube: despite all the theoretical popularity, Youtube’s revenue still can not cover its cost. Several market researches showcase Youtube's revenue for 2009 ranges from highest $500 million to the lowest $120 million. Yet accordingly to Multichannel News, Youtube’s cost, including bandwidth costs, content licensing aggrements, hardware needs and other expanses reach over $700 million in 2009, way over its revenue.
Thus the question comes to how to turn the traffic into physical monetization. As Youtube still has to earn most of its revenues from advertising, the suggestion is to create more professional production which can be monetized to drive more advertisers. Luckily, we are seeing Youtube moving to this direction. According to New York Times, this January, Youtube dipped its toes in online film rental market by making five movies available for rent. Note worthy is that the all the five distributed items are independent films. Youtube is satisfied with the result it achieved given limited amount of rental films and limited distribution time frame. What this new distribution model say to independent filmmakers? Youtube is still testing the water, but this attempt of charging feature films signifies Youtube's shifting to a more commercial viable direction.
No comments:
Post a Comment