That's at least the read from Internet video executives here Thursday at the RBC Capital conference. Executives from popular video search and ad companies said that so-called user-generated videos like those on YouTube aren't drawing any significant dollars from advertisers or agencies. Advertisers need to control their brand, and it's seen as too risky to give up that control on a network with home videos or potentially pirated broadcasts.More info at CNET.
One executive went so far as to say that user-generated videos will never make money.
"It will be like instant messaging. It's ubiquitous but no one makes money on it," said Thomas Wilde, CEO of Everyzing, which hosts digital audio and video for major broadcasters such as Fox Sports and Cox Radio.
Of course, he has a stake in supporting professional content. But that's still a controversial idea, given that Google spent $1.6 billion to buy YouTube two years ago. Despite the site's enormous popularity--it's the no. 5 Web site--YouTube has yet to make money from the massive video inventory it produces. Industry insiders have even estimated that it costs Google as much as $1 million a day in bandwidth fees to serve hundreds of millions of videos, according to Fortune.
Suranga Chandratillake, CEO and founder of video search service Blinkx, speculated that Google didn't really care about the costs when it bought YouTube. The acquisition, he said, was likely about acquiring those millions of people who visit YouTube every day--the same rationale behind Microsoft's interest in Facebook. (That said, YouTube has sought to form partnerships for professional videos.)
He disagreed with Wolfe that user-generated content will never make money.
Google still losing money with YouTube
Posted on Wednesday, August 13 2008 @ 7:21 CEST by Thomas De Maesschalck