CASE STUDY: Google and YouTube Together: Pass the Popcorn While This Ad Plays (Chapter 10: Online Content and Media)

Group FDale Earle MGS 5040-01Kwaku Morgan-Arhin 4 / 26 / 2010Latoya Nelson Dr. Melworm

http://www.mashable.com/2010/04/23/first-video-youtubehttp://www.mashable.com/2010/04/23/first-video-youtube

FIRST VIDEO ON YOUTUBE?!FIRST VIDEO ON YOUTUBE?!

CASE: “Google and YouTube Together: Pass the Popcorn While This CASE: “Google and YouTube Together: Pass the Popcorn While This Ad Plays”Ad Plays”

THE BEGINNING OF GOOGLE => THE BEGINNING OF GOOGLE => YOUTUBEYOUTUBE

YouTube launched on Valentine’s Day 2005; website didn’t officially hit the YouTube launched on Valentine’s Day 2005; website didn’t officially hit the masses with its first video upload until April 23 of that yearmasses with its first video upload until April 23 of that year

Google purchased it a year and a half later (November 2006) for $1.65 billionGoogle purchased it a year and a half later (November 2006) for $1.65 billion

Google’s stock price hit $500 months later and a little over $700 in November Google’s stock price hit $500 months later and a little over $700 in November of the following yearof the following year

The 2008 recession hit the YouTube / Google collaboration hard resulting in a The 2008 recession hit the YouTube / Google collaboration hard resulting in a rumored $250 million loss for that fiscal yearrumored $250 million loss for that fiscal year

CASE: “Google and YouTube Together: Pass the Popcorn While This CASE: “Google and YouTube Together: Pass the Popcorn While This Ad Plays”Ad Plays”

WAS YOUTUBE A WORTHWHILE WAS YOUTUBE A WORTHWHILE INVESTMENT?INVESTMENT?

YouTube’s tendency to keep secret their total amount of videos makes YouTube’s tendency to keep secret their total amount of videos makes skeptics wonder if the total cost of site maintenance makes profits skeptics wonder if the total cost of site maintenance makes profits impossibleimpossible

Estimates show it can be anywhere from 84 to 142 million videos, Estimates show it can be anywhere from 84 to 142 million videos, exceeding 1 petabyte of hard drive spaceexceeding 1 petabyte of hard drive space

It draws over 120 million visitors monthly, but the average stay is about 5 It draws over 120 million visitors monthly, but the average stay is about 5 minutes as opposed to sites like Yahoo! where its 150 million visitors each minutes as opposed to sites like Yahoo! where its 150 million visitors each stay about a hour or sostay about a hour or so

CASE: “Google and YouTube Together: Pass the Popcorn While This CASE: “Google and YouTube Together: Pass the Popcorn While This Ad Plays”Ad Plays”

HOW GOOGLE JUSTIFIES YOUTUBE HOW GOOGLE JUSTIFIES YOUTUBE PURCHASE PURCHASE

Google plans to turn YouTube, the Web’s largest repository of video, into Google plans to turn YouTube, the Web’s largest repository of video, into the largest advertising platform in historythe largest advertising platform in history

The increase of quality content so it’s on par with the amount of user-The increase of quality content so it’s on par with the amount of user-created content will increase profit after advertising next to popular videos created content will increase profit after advertising next to popular videos begins to make sense for sponsorsbegins to make sense for sponsors

After ways are found to collaborate with media conglomerates so After ways are found to collaborate with media conglomerates so permission to upload quality content is obstacle-free, more viewers permission to upload quality content is obstacle-free, more viewers gradually flock overgradually flock over

CASE: “Google and YouTube Together: Pass the Popcorn While This CASE: “Google and YouTube Together: Pass the Popcorn While This Ad Plays”Ad Plays”

• They restrict advertising. They only advertise on those pages that They restrict advertising. They only advertise on those pages that copyright owners have given permission.copyright owners have given permission.

• Google developed a software called YouTube Video Identification. It Google developed a software called YouTube Video Identification. It allows copyright owners to scan the YouTube database for their own allows copyright owners to scan the YouTube database for their own copyrighted material.copyrighted material.

• They are changing their approach to a "Quality Video Content". High-They are changing their approach to a "Quality Video Content". High-Quality content owners, like CBS, HBO, ESPN, etc., are allowed to Quality content owners, like CBS, HBO, ESPN, etc., are allowed to establish their own "exclusive channel" on YouTube.establish their own "exclusive channel" on YouTube.

• YouTube cut deals with companies like Sony, the BBC, Starz, etc., to YouTube cut deals with companies like Sony, the BBC, Starz, etc., to provide full-length movies and TV shows for freeprovide full-length movies and TV shows for free

WAYS YOUTUBE / GOOGLE ARE WORKING WAYS YOUTUBE / GOOGLE ARE WORKING WITH COPYRIGHT OWNERSWITH COPYRIGHT OWNERS

CASE: “Google and YouTube Together: Pass the Popcorn While This CASE: “Google and YouTube Together: Pass the Popcorn While This Ad Plays”Ad Plays”

• They can not be the Internet's single source for all world's video.They can not be the Internet's single source for all world's video.

• They need lots of powerful players in order to make a profit and They need lots of powerful players in order to make a profit and survive.survive.

• YouTube has developed a "sponsored videos" program. They YouTube has developed a "sponsored videos" program. They select amateur videos and offer advertisers text ads to be select amateur videos and offer advertisers text ads to be displayed on the lower portion of the video screen.displayed on the lower portion of the video screen.

• The advertisers bid for keywords and Google uses search tools The advertisers bid for keywords and Google uses search tools to match the keywords with the proper videos.to match the keywords with the proper videos.

YOUTUBE / GOOGLE NOW!YOUTUBE / GOOGLE NOW!

CASE: “Google and YouTube Together: Pass the Popcorn While This CASE: “Google and YouTube Together: Pass the Popcorn While This Ad Plays”Ad Plays”

• The connection between the video and the ad may not be clear.The connection between the video and the ad may not be clear.

• Chances that the advertisers' ads will show up on an embarrassing Chances that the advertisers' ads will show up on an embarrassing video.video.

• YouTube users still expect the videos to  be free and without ads. YouTube users still expect the videos to  be free and without ads. Therefore their response rate to the ads are very low.Therefore their response rate to the ads are very low.

• The ads are killing YouTube's audience.The ads are killing YouTube's audience.

PROBLEMS WITH THE NEW ADVERTISINGPROBLEMS WITH THE NEW ADVERTISING

CASE: “Google and YouTube Together: Pass the Popcorn While This CASE: “Google and YouTube Together: Pass the Popcorn While This Ad Plays”Ad Plays”

QUESTIONS???QUESTIONS???

CASE: “Google and YouTube Together: Pass the Popcorn While This CASE: “Google and YouTube Together: Pass the Popcorn While This Ad Plays”Ad Plays”