Traffic skyrocketing for video-sharing sites
Unique users to video-sharing sites (dominated by YouTube) have doubled over the last year. The same study of Pew Internet Project highlights a more long-term growth of video sharing sites. The spread of broadband connection, the widespread use of video by a variety of websites, and the increasing of amateur video makers are factors for the longer term.
Nearly half (48 %) of U.S. users visited a video sharing site during 2007. On a typical day, some 15 % were either watching or posting video.
In addition, video sharing sites are getting more involved in political and social issues. In the summer YouTube co-hosted a presidential debate with CNN, and this fall Facebook partnered with ABC News.
High traffic on YouTube, few profits on YouTube
Perez Hilton complains that he only made $5,000 on 25 million video views on YouTube (that works out to a lousy .20 CPM). As a result some analysts say that there is not much money out there for independent web video publishers. This is a wrong conclusion in our view.
Perez Hilton is hosting their clips on a free service. He does not have control over pre-roll tied with banner ads. Even at a modest $20 CPM (and it could be $30 - $40) he could be bringing in $500,000 a month in preroll ads. He is missing out on $6 million in inventory. As another analysts say, “there is no money in giving away your video and hoping someone else will sell it and make you rich.”
Pre-Rolls video ads scare viewers away
Consider pre-rolls as a transitional video ad unit. They are not going away anytime soon. Advertisers need to understand better what audiences think.
A study by Burst Media reveals that more than half of all Internet users bail out of a clip before the pre-roll stops playing, and a significant percentage leave the site entirely. It is not so difficult to find compelling video ads.
TV Stations look to their Websites for new sources of revenue
Local TV Stations in the U.S. are buying syndicated program to show on their Web sites, as a way to sell advertisements with those programs to local businesses. Some stations are crating original programming for the Web, but it is far easier for them to purchase the online rights to syndicated shows.
So far a majority of local TV stations sell video advertising on their Websites, but for that they use one of these three vendors: WorldNow, Internet Broadcasting Systems or Broadcast Interactive Media. Another company is TitanTV, a technology vendor turned media company, which has introduced a platform to attach local commercials to online video clips. This company is also producing short-form series and has the online rights to two shows: “Jury Duty” and “Animal Rescue”.
The New York Times reports about this phenomenon, and raises a conclusion: “The success or failure of online ventures will ultimately rest on their promotional abilities. Viewers of local TV are often reminded to go online for weather and traffic updates, but often they go to the site of their local newspaper instead. And when they want to see television shows online, they gravitate toward the networks’ Web sites.”
Eyes on Google, Microsoft bids to buy Yahoo for $44.6 billion
Microsoft said this week it would pay $44.6 billion to buy Yahoo –if the search engine takes the deal. The unsolicited bid would be worth $31 per share -62 % more than the company’s Thursday 31 closing price.
Microsoft made a similar attempt a year ago, but Yahoo rebuffed them because they thought their company was going in the right direction. Now, in a letter to Yahoo, Microsoft execs say “A year has gone, and the competitive situation has not improved.” Yahoo has promised to “evaluate this proposal carefully and promptly.”
Microsoft may see Yahoo as its last best chance to catch up Google in the Internet search and online advertising arena. It would be its largest acquisition.
Yahoo to acquire Maven for $150 million
At the same time, Yahoo is in the final stages of deal to acquire Maven Networks, for $150 million. The company, founded in 2002, headquartered in Cambridge, has raised more than $30 million in private funding. Maven provides IP video hosting and distribution services for media outlets and private enterprises.