points by nl 11 years ago

I'm not sure what your point is?

1) Youtube isn't profitable, but it's taking more and more "hours watched" out of the TV market. Google can keep it running at break even for as long as they want, and then adjust the ad prices up very, very slightly and start making profit based on the huge audience.

2) Video watching (usually) has very little commercial intent, especially in terms of some kind of "commercial value per byte served" measure. This compares very badly to Pinterest, where a very significant amount of usage has almost direct purchase intent.

tdees40 11 years ago

If YouTube can increase ad prices without losing advertisers, why aren't they doing that now?

  • nl 11 years ago

    They don't need to.

    They'd rather increase the top line (revenue) by growing the market. That means keeping it as cheap as possible for advertisers to use, while still covering their costs.

    The idea is to get media buyers used to a given rate per video view, then use increases in YouTube usage to increase the total amount of money they bring in (revenue), and use economies of scale and technology change to drive costs down.

    The long game for them is to build the perfect video advertising platform on YouTube, and then allow other video platforms to use it (in the same way a huge number of websites use AdSense/DoubleClick).

    There's a lot of money in TV advertising. Google wants that money, and they can afford to wait another 10 years for the market to develop enough for it to happen.

kenko 11 years ago

> where a very significant amount of usage has almost direct purchase intent.

But how do you know that it isn't actually 99% window-shopping and fantasy, until you actually put the theory into action?

  • nl 11 years ago

    You can measure it:

    Revenue from Pinterest however was up by 2x over the Thanksgiving weekend and on Black Friday, and up by 3.6x on Cyber Monday (as compared to a 30-day average preceding Thanksgiving). This is very telling about the power of Pinterest in driving e-commerce transactions.[1]

    or

    How did shoppers, who had pinned an item before purchasing the item in store, originally discover the item?

        10% reported that they discovered it while searching on Pinterest.
    24% discovered the item on a stranger’s Pinterest board or newsfeed.
    19% discovered from a friend’s board.
    7% was from a retailer’s Pinterest board.

    This encompasses a total of 60% of people, who had pinned and later purchased an item, originally discovered the items on the Pinterest platform.</i>[2]

    [1] http://blog.piqora.com/revenue-from-pinterest-more-than-trip...

    [2] http://pinnablebusiness.com/infographic-research-shows-pinte...