Safe Prediction: Google Wants $10 Billion More Than Videos Of Your Cat

Jul 23rd, 2008 | By | Category: General, Internet TV, Video

GooTube LogoBack in 2006, we suggested that YouTube as you know it is dead, when Google bought the site for $1.65 billion and money came into the picture in a big way.

Since then, Google’s admitted it’s got a problem trying to make money off of YouTube, and admitted that more than 97% of the videos on YouTube are deadweight.

A new report from The Diffusion Group reveals some of the math behind Google’s YouTube problem:

There is money to be made in professionally produced online video and the prices based on cost-per-thousand (CPM) impressions are good. That’s the conclusion of a report from the Diffusion Group.

Professional Web programming yields very high CPMs, the report found. The CPMs for long-form online content are $40 today and will reach nearly $46 in 2013.

The lion’s share of ad dollars—$590 million today and $10 billion in 2013—will go to the professional stuff. That can be anything from to Revision3 to video bloggers. Because that type of Web programming accounts for 96% of ad revenue flowing into online video.

In other words, 97% of YouTube’s videos are deadweight when it comes to competing for 96% of the Internet video ad dollars.

While there’s money to be made in long-tail user-generated video, Google’s going to have to move its focus to professional video, where the ad dollars are at.

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