YouTube Still Trying to Monetize Content

Written by Steve Donohue

Wednesday, March 18. 2009 at 05:40 PM EDT Post a comment

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NEW YORK -- Media Summit -- While YouTube Inc. is beginning to share advertising revenue with media partners and other content suppliers, executives at the top online video site say they are still trying to figure out how best to monetize videos on the site.

"You shouldn't compare the success of [parent company] Google with what's going on at YouTube," YouTube director of partnerships Kevin Yen said on a panel here at the Digital Hollywood Media Summit Wednesday morning.

"We are really working hard to crack this monetization nut. Monetization levels, as we move from offline to online advertising, what happens to the pricing and the revenue models that have been sustaining it -- it's not clear what happens," he added.

When asked by moderator and Business Week columnist Jon Fine if Google and YouTube would ever look to purchase major media companies such as NBC or The New York Times Co., Yen emphasized that YouTube is not focused on becoming an original content supplier. "We're not good at creating content -- we're good at creating platforms," Yen said.

Yen and other panelists debated how technology is impacting the news business. While the executives agreed that there is no shortage of national, local, and niche news content to choose from on the Web, monetizing news content remains a huge challenge.

National Public Radio editorial director for digital media Dick Meyer said the strategy of news sites charging micropayments for news stories hasn’t worked. "All of those things are doomed to failure. We don't have a clue what's next. There's going to be much more failure than success for a long time," Meyer said.

The Associated Press senior managing editor Michael Oreskes concurred: "There is no one solution for all of this. There are a variety of solutions."

While Oreskes acknowledged that the wire service's business model is "under stress," he noted that the company is performing better financially than the newspapers that have funded the AP for 150 years.

YouTube is becoming a key news source for many Web surfers. Since 2007, the number of views for news videos from AP, Reuters, and smaller news outlets has increased by 600 percent, Yen said.

With a glut of content available to consumers, the price content creators will receive for their work will go down, said Vanity Fair columnist Michael Wolff. "And the premium is going to go to people who can organize this content, serve this content, facilitate this content," Wolff added.