Yahoo for the Tube!

So, back on May 28th, the E-Commerce Times ran a story, written by Erika Morphy, on Yahoo's plans to create a video sharing service to compete with YouTube. The story, entitled Wheels Greased for Summer Yahoo-Tube Debut, is worthy of being mentioned here on Blog Time Passing because, you guessed, it included quotes from me.

Here's the blurb that precedes the beginning of the article:

Yahoo wants to give YouTube a run for its advertising money by launching its own channel for user-generated videos. Yahoo shouldn't have much trouble attracting advertisers if its product offers nonexclusive deals at more attractive rates. Getting inventory is another story, however. It won't be easy to get content creators and viewers to think twice about where to upload and devour videos.

And here's how it begins:

Yahoo is in advanced talks with video producers to launch its own online video channel this year, a product meant to rival Google's YouTube, according to Ad Age, which cited unnamed sources briefed on the company's plans.

The news has intrigued the online video and advertising industry because it would introduce some very welcome competition into this channel, owned largely—but not completely—by Google.

Yahoo reportedly hopes that generous revenue-sharing arrangements will attract producers and content creators to try out its new platform. YouTube takes a 45 percent cut.

Yahoo will offer the option of a fixed ad rate that will be 50-100 percent higher than YouTube's average net ad rate, according to Ad Age.

Sound good? Or maybe too good to be true? I weigh in on the matter in the next section of the article, which has the heading "Winning Over the Masses":

While these numbers may pique the interest of producers, Yahoo will be hard-pressed to trump Google's ownership of this market, Lance Strate, professor of communications and media studies at Fordham University, told the E-Commerce Times.

"The name YouTube is practically synonymous with user-generated online video, and it will be very difficult for Yahoo to make a dent in Google's dominance of this sector," he told the E-Commerce Times.

"The bottom line is that if you want your video to viewed by the largest possible audience, you'll upload it to YouTube. No one comes close to the number of views, viewers, subscribers and uploads that YouTube has, and even if everyone stopped providing YouTube with new material today—a highly unlikely scenario—it would take a very long time for Yahoo to come close to the enormous archive of videos that YouTube has amassed over the past decade."

Now, let's hear from someone else:

The hill Yahoo proposes to climb is indeed steep, said Warp 9 CEO Andrew Van Noy, who suggested that Yahoo get a little more imaginative as it tries to face off against Google.

"Assuming the rumors are true, I have a difficult time imagining any video platform posing an immediate threat to YouTube," he told the E-Commerce Times. "It's going to need to make concessions in order to challenge one of Google's flagship products."

In addition to better ad rates, Yahoo could offer advertisers analytics or partnership opportunities with major media publishers, Van Noy suggested.

"Another idea could include cutting down on the length of ads, which many YouTube users often complain about," he said.

And at this point, a new section begins with the heading of "The Real Problem With Scale":

Yahoo had better expect to post a loss as it moves into this space, Guido Lang, assistant professor of computer information systems at Quinnipiac University, told the E-Commerce Times.

It took Google about five years to turn a profit on YouTube, he noted—and that followed experimentation with a number of different videos ads, such as pre- and post-roll ads, as well as YouTube channels and video-editing features.

"Google's experience has shown that it is extremely difficult to monetize online video. You need scale—both in terms of content and in terms of audience—to make it work," said Lang. "I'm not sure that Yahoo will be able to bring that kind of scale to the table."

And the article ends by returning to me for the final section, under the heading of "Some Inroads":

Yahoo's plan may not be completely hopeless.

There are alternatives to YouTube, and a significant number of individuals have grown dissatisfied with YouTube over the past several years, Fordham's Strate pointed out.

"YouTube has addressed some of the grievances by lifting restrictions on the length of amateur videos, but many serious video creators have migrated to Vimeo and Blip.tv to obtain a better quality of service," he said.

Still, "one of the main complaints about YouTube is the increasing presence of advertising," noted Strate, "and Yahoo does not appear to be considering purchasing one of the YouTube alternatives or providing an ad-free environment."

And now, so they don't go to waste, here are the comments I provided, via e-mail, in their entirety, so you can see the larger context from which the article's quotes were excerpted:

The name YouTube is practically synonymous with user-generated online video, and it will be very difficult for Yahoo to make a dent in Google's dominance of this sector. The bottom line is that if you want your video to be viewed by the largest possible audience, you'll upload it to YouTube. No one comes close to the number of views, viewers, subscribers, and uploads that YouTube has, and even if everyone stopped providing YouTube with new material today, a highly unlikely scenario, it would take a very long time for Yahoo to come close to the enormous archive of videos that YouTube has amassed over the past decade.

An important and often overlooked aspect of YouTube's value is that it functions as a search engine second only to Google search itself. When you want to find out about how to fix a washing machine, change a spark plug, cook a turkey, or learn about string theory or Web 2.0, YouTube is the place to find the largest collection of informative, instructional, and educational videos, and video represents a mode of communication well suited for how-to instruction and any explanation that benefits from illustration and animation. Moreover, YouTube has been moving into Netflix and Hulu territory by providing feature films and original television programming.

Of course, there are alternatives to YouTube, and a significant number of individuals have grown dissatisfied with YouTube over the past several years. YouTube has addressed some of the grievances by lifting restrictions on the length of amateur videos, but many serious video creators have migrated to Vimeo and Blip.tv to obtain a better quality of service. But one of the main complaints about YouTube is the increasing presence of advertising, and Yahoo does not appear to be considering purchasing one of the YouTube alternatives, or providing an ad-free environment.

The chances of Yahoo having any significant impact of YouTube are small, in my opinion. Before purchasing YouTube, Google launched its own Google Video, but gave up on it in favor of YouTube. MySpace tried to establish its own video service, but that never caught on and couldn't stop the social network from imploding. Yahoo does not appear to be offering anything particularly new or different from YouTube. They may offer better deals on revenue-sharing and advertising, but the only things that matter as far as monetization is concerned are eyeballs, and it's YouTube that has the online audience's attention, and will be securing more of it as television and the internet continue to converge, and viewers spend more time watching YouTube videos on their TV screens.

Yahoo may be looking for some synergy through integration with their earlier acquisition of Tumblr, but if all they have to offer is a pale shadow of YouTube, Yahoo Video won't amount to much. It is highly unlikely that Yahoo Video will offer a serious challenge to YouTube, but they could perhaps develop a distinctive identify if they were to incorporate live streaming, short video clips along the lines of Vine, professional programming along the lines of Hulu and Netflix, combined with the amateur uploading that is YouTube's stock-in-trade.

And that is that. Will YouTube reign forever over the video-sharing world? Of course not. All good things must come to an end, as must all bad things, and everything in-between. But when, and how that will happen? That is the question. And I don't have an answer, but I don't think it's here and now, as much as Yahoo might want to have its revenge on Google for beating them out in the search engine business a decade ago. YouTube may well remain the dominant force for some time to come, and only succumb to changes in hardware at some point in the future.

Anyway, aside from all this, is more television and more video exactly what we need right now?