How YouTube Is Missing Out On $1.2 Billion A Year By Not Having A Business Channel

25 June 2008 Written By: Jim KukralComments: Comments

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Why doesn’t YouTube have a business channel? They have channels for musicians and experts and journalists and more, yet no place for businesses to upload their content. Why?

Well, it could be that as of the time of this writing, there is hardly any business-type video content in existence. By this I mean that businesses have not begun en masse to create videos for marketing purposes. So it makes sense, right now, that there is no YouTube business channel because there is not any content to fill it.

Another reason that YouTube may not have a business channel is that of the business video content that does exist, most of it is spammy to say the least, and YouTube doesn’t want spammy content in any form.

So here we are, in June 2008 and businesses are beginning to realize that a big piece of the future of marketing online, and search, is having an online video. But YouTube, who owns 77% of all video views, has decided not to create a sandbox for businesses to play in.

If Google Wants To Make Money Right Now, YouTube Has To Stop Thinking Like A Publisher
Recently, much talk has been made about how YouTube cannot make money in their current publisher business model (page views + ads = $$$). I’ll leave the intense debate on that issue to people like Mark Cuban who I agree with. But that’s not what this manifesto is all about.

If YouTube wants to make money right now, they need to create a business channel, or independent brand (Google Video perhaps?) that is built specifically for businesses to put their video content.
Let’s first talk about why they need to do this, then about how it’s going to make them money right now.

Reason #1 YouTube Business Should Exist & Segregate the Prisoners

Business content doesn’t fit with the current content on YouTube. A commercial or training guide or seminar recording does belong next to music videos or skateboarding videos or soft-porn videos.

Ask any Chairman of the board of a Fortune 500 company (I have) about why they aren’t putting their videos on YouTube and you’ll get the same answer. “I’m not putting my brand in the mix next to videos of underage teens dancing in their underwear.”

Good point. Why would they? The answer is they’re simply not going to. Done.

YouTube has to wall-off business content and separate it from the general population. How can this be done? Well, one way would be to take Google Video and turn it into the “business” arm of YouTube. The other way would be to simple create a walled-off section of YouTube called YouTube Business and make that video content exist on its own, not integrated into the general population.

Reason #2 YouTube Business Should Exist & Universal Search is an Empty Cup

Universal search is the future of Google search, and a big piece of that is direct integration of video into the organic results.

But Houston, we have a HUGE problem!

Yep, the reason you’re not seeing Google universal search in action (one of them at least) is that there simply isn’t enough relevant video content in existence to “fill” billions of search results. Let me explain.

Every day millions and millions of people come to Google and look to find high-quality, relevant content that solves their problems. So let’s pretend that one of those searchers comes and searches Google for “skateboarding manufacturers. It’s obvious that that person is interested in finding a list of companies that sell or product or distribute skateboards.

So when they search, they get some web pages (276,000 or so) with tutorials and probably some image results and maybe some blogs show up too.

Then they get a bunch of videos (17 only to be exact) of kids doing skateboard tricks.

How relevant!!! Not.

There are millions of examples like this. The bottom line is, because of the very nature of the type of content that exists on YouTube right now, there is not enough relevant content to display in universal search.

Google searchers are not going to continue to use Google if they are not receiving the highest-quality, most relevant results, and if they turned Universal search on right now in full it would be a joke.

That’s why YouTube needs, no MUST, have business content!

What Kind Of Content Would Fit On YouTube Business?

Online video is a huge opportunity for businesses. Imagine having the power to put a commercial, or educational guide, or viral video, saying whatever you want to say, however you want to say it, on your website for people to be able to watch 24-hours-a-day, 7-days a week.

This is reality. Businesses that do not take advantage of online video both on their website and on sites like a YouTube Business will be left behind down the road. Video communicates so much better than bulleted text on a screen, we all know this.

So there is no question that all businesses will be required to produce videos for online consumption. It’s like having a website today that’s easily findable online. It’s no longer something you could do, it’s an expectation. If you don’t have it, there’s something wrong with you in a consumer’s eyes.
This same expectation will happen with online video eventually. It’s that important.

So what kinds of videos should businesses be making and storing on YouTube Business?

Commercials or infomercials
Educational videos
Training videos
Recruiting videos
Website spokesperson videos
Viral videos
And any other type of video you can think of that will help educate or guide or inform a potential customer about

A Big Problem Is That YouTube Doesn’t Want Those Types of Videos

In case you haven’t noticed, the types of videos mentioned in the list above are NOT videos that exist on YouTube today. In fact, if you read their terms, you’ll understand that YouTube does NOT WANT those types of videos and will remove them if noticed. I know because they took a few of my videos down that had calls to actions on them.

Why doesn’t YouTube want business related videos? Because that’s not their model at the moment. They want a critical mass of user-generated content videos and they’re going to sell ads on and around them.

Fine. That’s great. But it still doesn’t solve a problem for millions of businesses who will need a place to have their videos hosted and served and viewed.

ytbiz

Introducing YouTube Business!

So we’ve talked about why YouTube needs a business section. Now let’s talk about how YouTube is going to make money, immediately, with a business section.

But first off, let’s talk about the huge opportunity that exists. Millions and millions of businesses, from mom and pop stores, to billion-dollar, global corporations will all have the need to have a place to put their videos. Guess what? They don’t have a resource right now to do that.

That’s right. As of right now, there really isn’t any place for a business to quickly, easily and cost-effectively put their business video content. They could invest in third-party hosting, but then they’re going to have to figure out how to create a proprietary flash player to stream their videos, and more importantly, their videos, if not hosted on YouTube, are not going to be indexed into Google universal search.

The bottom line is, even for large companies, it is going to be much easier to simply have a place that is built for business video content that solves all the issues associated with video streaming, compression, quality, etc…

It’s All About Subscriptions

Remember we talked about stopping thinking like a publisher? YouTube needs to forget ads on business content, ok? Keep them on user-generated content if you wish.

Let’s talk about subscriptions. For the sake of this argument, let’s say that there are 1 million businesses ready to sign up today to this new YouTube Business channel. Of course there are millions and millions more businesses in the Global market today, but let’s stick with the 1 million.
(Actually, the U.S. Census reports that there are 5,983,546 businesses in the USA alone in 2005.)

What if YouTube Business charged each business $100/month to host their videos? That’s $1200/year, times 1,000,000 accounts = $1.2 BILLION/year.

Alright, let’s say that they signed up 5 million businesses at that same rate?
That’s $1200/year, times 5,000,000 accounts = $600 BILLION/year.

You think that would pay a few bandwidth bills?

Ahh, yes, but Jim, would a business pay $100/month to have their videos hosted at YouTube? Why yes, they’d pay that in a heartbeat, and here’s why.

1. Universal search integration for videos that meet “requirements”
2. The ability to remove the YouTube branded logo on the player allows the business to both stream the video on YouTube, as well as on their website
3. Full HD capability if wanted
4. Long-form. Allowing videos up to 2-hours in length
5. Maintaining brand equity by segregation from amateurish and inappropriate videos in the general population
6. Unlimited views
7. Trend tracking and analytics
8. Private community
9. Custom-branded business channel pages

Links & Clicks Are Just Gravy

Let’s take this a step further now. So we’ve got all of these businesses paying YouTube a monthly recurring revenue. Now let’s start upselling them.

Want the ability to put clickable links to outside website urls in your videos? Add $50/month to your fee, or charge the business by links or clicks or views.

Example #1: One link per video. And it costs you $1.00 every time that video is viewed.

Example #2: All links in your videos that are clicked cost you $1.00 for every click.

Example #3: You pay for views of your videos on a sliding scale. The more views the more you pay.

There are many combinations YouTube could choose from that the business would pay for.

In Conclusion

Why would any business upload their videos anywhere else? They wouldn’t. A YouTube business channel just makes sense for both businesses and YouTube. Someone from Google give me a ring. I’d be happy to lead this for you. I’m not kidding. Let’s do it.

I’d love to hear your comments. Tell me I’m wrong, tell me I’m right, but make sure you actually read the entire piece above first?

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  • Jim, I couldn't agree more.

    There is a huge opportunity with this and you're right companies would pay the $100 per month. We've got three clients right now regularly publishing video content that we full on agree to be on a platform like YouTube Business. But right now, we're in the position of hosting the videos ourselves and building our own branded flash players - costing far more than the $100 per month.

    Creating a platform that business don't have to worry about their message being mixed with the UGC crap, having the ability to create private communities, and long-form video. The clients I mentioned have content this is valuable but it is best in a long-form format.

    Great insights - it's one of those What The Heck, I Can't Believe This Doesn't Exist moments.
  • Exactly. And how hard is it right now for a "regular" non-tech business to figure out how to build a flash player, and embed in their website, etc... It's a lot.

    I agree. I can't believe Youtube doesn't have this yet. I wish they'd call me so I could build it for them.
  • I think using Google Video as the platform is the way to go. The other advantage is that embedded YouTube videos can be viewed in RSS readers such as Google Reader.
  • Alex -S-
    A lot of valid points there. But - i think youtube should just stay youtube, full of amatuer videos etc. google's first prob is the youtube vs google video thing.

    Maybe they do a revamp of Google video and make it more business oriented - if i'm looking for something i can learn from i tend to search there anyway as it is less polluted. Plus i like that Google Video offers the option to openly offer the video as a download to the end user in many cases - that could be a seller too. Instead of 3rd party ripping it from the site, which many people do with YT - be open and say "hey - like this video - it's yours to watch again and again and show to your friends on your iphone"

    I think as you say there's a huge market potential for business video - maybe youtube isnt the platform for it is all i'm saying. When it comes to performance and user interface - theres a lot better (allbeit smaller) companies out there - i personally like Vimeo, that could work a lot better IMHO

    Even if there was a separate youtube business - i'm sure there'd be some sort of "bleed" between the two. And i bet "the kids" would try and post their dance videos into youtube business just to be funny. :) From what i've seen so far - just keeping copyright infringement off their site seems impossible - so imagine how much time the big G would have to spend moving/deleting content posted in the wrong "area" of youtube - sheesh :)

    The type of revamp/ rebrand youtube business would take - it would be almost cheaper taking the same code and rebuilding a whole new platform. Offer options like custom players on a per company basis (Someone does that allready i think - i forget who).

    There's def a lot of great ideas here and the potential is huge - just not feeling the youtube aspect of it.
  • Thanks for commenting. The problem with Vimeo and all the rest is they don't offer those list of features I mentioned that are very important to a business moving forward. Maybe they will in the future. Not sure why Youtube would want to let a competitor move up and take this piece of the pie though.

    As for kids putting their skateboarding videos on YT business. Um, nope. Nobody except a real business is going to shell out $100/month. Especially some kid.

    The potential is huge, isn't it?
  • I think your math is a little whacked - I don't see that many people paying for it.

    But I applaud your Jerry Maguire-esque manifesto.

    Who is going to be your Bob Sugar?
  • If you can agree that having videos as part of your website is something that every business MUST have in the future, then you have to see that millions of businesses will need this, and will pay for it.
  • I think every business should consider producing quality video, and that a minority will do it.

    Unless something changes, it's too difficult and expensive to create video that would be at a caliber that companies with the budget for a paid YouTube account would want to upload.
  • I think more strongly than you. Video is a huge part of the future of mobile, search, website communication, etc... Things are already changing, you can get low-cost videos done that are pretty good nowadays, and the tools are getting better by the month.

    Plus... the whole universal search integration is key to this. What business wouldn't pay for the "opportunity" to be included in the universal search results? You'd have to pay.
  • I agree on the opportunity that shouldn't be passed by companies, but I don't think there will be such a surge from the companies unless there is a really sexy and influential case study about it.
  • I'm not sure 1.2 billion is enough to interest Google.
    However, for some enterprising web entrepreneur, it will be their billion dollar company. I agree that a business video site is something many businesses (especially small businesses) would be interested in. There are many ways small businesses could use video to enhance their websites or increase their businesses.
    I just do not think Google is going to care-have they ever listened? Why try to get them interested when they aren't. I think they would rather sell you TV advertising or radio advertising through AdWords.
    I think we are missing the opportunity ourselves here.
  • Well Google needs to figure out how to make Youtube profitable. Even though Google spends money left and right, they will want a good ROI especially in a down market. If they don't, Youtube might end up one of those stories of the second tech bubble, sold for a ton and never made a buck. Also, Jim has a very good point about integration and the universal search. Youtube videos will rank higher than another business video host company.
  • Mike, some argue, like Sam H., that Youtube wasn't bought to be profitable. But I disagree. I think they just haven't figured it out yet. My plan gives them a solid way to do it and doesn't mess with their user videos or publisher model.
  • My argument against this hairbrained idea of yours is that Google didn't buy YouTube in hopes of ever directly monetizing it. Sure, they want it to be "profitable" in the same way that GMail, GDocs, etc are profitable... long term, high quality advertising.

    As someone above said, this would be a great idea for a startup, but not for Google.
  • That's just dumb. We can make money with a good idea, but let's not do it because our intent when we bought this was to not make money. Go tell that to a room full of shareholders. Fail.
  • Not when they can make much more money down the road.
  • Well, yes, anyone besides Google could do this. Google holds the key though of "universal search". With that carrot, you "HAVE" to pay them. You wouldn't have a choice.

    And 1.2 Billion/year isn't enough to interest them? Um... tell that to the shareholders and I bet they disagree.
  • jonaande
    More corporations need to be looking at professional-quality videos as an avenue to court potential customers because it is a viable way to increase traffic and potentially your sales. Just look at the success BMW is having with their viral video for the 1 Series - it even jumped to mainstream media. However, I'm not convinced I would want to put that content on a third-party site - instead I would want viewers to come to my site to see it. Then I have them there, I can engage them and hopefully I can begin a relationship with them with the ultimate goal of having them come back on a regular basis.
  • You've missed a key feature. Youtube hosts it for me. I pay them and they give me the ability to put a non-branded nice looking flash player with my video on my own website. So I get the website benefit, and the youtube benefit.

    You're right, web video should be on your site first for businesses.
  • jonaande
    I understand You Tube is hosting the content and you can then take the video and throw it on your own site, and for a small company it would definitely work - I've actually done something similar, but with blip.tv because youtube's quality wasn't quite there. However, I'm still not sold on it for a mid-sized to larger company that can put video on their site, especially when I think it is going to become easier to do in the future.

    I guess I'm struggling with how I can incorporate having strictly corporate videos on youtube into a broader strategy - and there may not be a way to do so, it might simply be an easy way to host the video.

    You've got me thinking.
  • The issue with Blip is that they don't want your business content. Anything with a call to action that isn't a "show" will or can be removed and account deleted at any moment without notice. So it's not a solution for businesses.

    Adding video to your site in the future will be as easy as adding a blog is today. Get my point? Millions of businesses still can't figure that out. Video is tougher.

    Keep thinking!!! I will to.
  • I'm just find your blog. Amazing article, and on certain points you are obviously right. I do not even complain, while you listed all of the important issues and concerns. My opinion is that there need to be a separate section for all of the business related videos, and then the party can be started.
  • Ash
    its 6b/yr, not 600b/yr, just a typo there jim
  • Where do I say 600 billion?
  • Alot of money to be made here to say the least.
  • ji
    cause google IS the business!
    google is the world!
    there is only google!
  • Jimm Fox
    I go to youtube to watch the viral video de jour and to be entertained. Why would I go to Biztube?...

    Intersting idea. You are suggesting that google become both a content delivery network (many exist and many, many more will spring up in the next few years) and a video content aggregator for all business video.

    Google as a business video CDN - like almost every new business on the web - Google, Microsoft, Apple and everyone else with huge capital reserves has to decide what business they are in... and stick to their knitting. I could imagine a hundred impationed articles -just like this one - defining yet another multi billion dollar opportunity that Google is ignoring. I agree that this idea is closer to their core advertising model than most, but I'm not convinced this is the right move for them.

    Google as a Business Video Content Aggregator. Google owns search already - so this is not a pressing business issue for them. The reason the VC's in silicon valley haven't invested millions into this business idea is that no one wants to compete directly with Google. (Are you going to go to Google to look for business information or are you going to go to Biztube and do a search for a video related to your query?)

    How important would this new site / portal / tool be. Video is just a media type (getting lots of hype)Why is there no company brochure portal, or product brochure portal? Yes - video is going to become a very importan marketing tool for all companies (lot's of it will be crap - just like websites were 10 years ago and still are today) but video is just another media type used for marketing. Am I going to a site/portal to look for business videos or am I going to the web to look for something to solve my busness problem- video or otherwise. Just like companies today make the mistake of putting all of their video's together under a 'videos' link (like they assume that people are actually looking for 'videos' ) on their websites, putting a whack of disparate business videos together on a video portal (just because they are the same media type) won't necessarily help people get answers to their business problems.

    Yes, Google could easily become a CDN and compete with Akamai and the many other CDN players who also charge a fee to host content, but they could just as easily do something else with their billions.
  • Jim - Have you looked at Ooyala yet? They are ex-Googler's creating the platform you seem to be describing. I don't think their TOS limits your content the way YouTube or Blip does.
  • I am checking it out now, thanks!
  • That’s $1200/year, times 5,000,000 accounts = $600 BILLION/year. <<<< Quick change it to $6 BILLION/year before more people realise!!!
    =P
  • Rich
    Yeah, Fliqz.com does this.
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