Why Your Future Lies in Youtube and Online Advertising
January 1, 2012
After computer studies at UBC, you founded BroadbandTV, a company that manages online video. How does it work? Every minute, there are 48 hours of content uploaded to YouTube. A portion of that is pirated copies—a third of YouTube’s monetized views are associated with what we call user-uploaded copies of premium assets. But the people uploading this content—these users—don’t see themselves as pirates. They think, “I’m a fan. I’m curating these videos, I’m putting them up on YouTube, I’m embedding on Facebook, sharing them with friends.” We decided to try to filter and curate this fan content to put our content partners back in control of their own assets.
Why should one of your big clients, like Warner Bros. or Columbia TriStar, tolerate pirated video at all? Because fan content gets 12 times as many views as official copies. Say someone uploads an NBA clip. Because the fans are really engaged, their version gets uploaded faster than the official copy and gets more traffic because users find the best clips and because every individual uploads a copy to their channel. You end up with hundreds of thousands of copies being shared and viewed.
So you’re increasing brand awareness? No, we’re bringing in new revenue streams for our clients by serving ads next to the content. We have access to the back-end servers on YouTube. So once we find appropriate content, we filter it, purify it, make sure it is brand-safe. You want to upload an NBA clip? We can’t say, “Don’t do that,” but when it hits our filter, we check it. If people create a mashup of NBA videos and add the F-bomb all over it, we won’t post it. If they do injuries, fights, we don’t post it. But if it’s clean, and it’s not the full game, we leave it up there and we monetize it.
How does the money work? Every time a video is loaded, advertisers give you a specific amount depending on the ad format. The pre-roll that appears for 15 or 30 seconds before a video is quite interactive, so they pay you about $20 for 1,000 impressions. Worldwide, online advertising will grow to $96.9 billion by 2014—video is 15 percent of that, and it’s growing rapidly. We want to represent a portion of that.
Is the ad revenue split equally among your content partners, networks like YouTube, and Broadband?
What’s the next big thing for online video? Social video. Online content is increasing exponentially. But how do you find the good stuff? We’ve been conditioned to react to content that’s been manicured and pushed to us. For example, your friend sends you a link for a cat video—you watch it and then share it. We have to be more conscious that we can pull video, make choices for ourselves. I’m not saying content shouldn’t be entertaining, but we now spend 15 years of our lives watching video: four hours a day on TV, two hours online, almost an hour on mobile. We have to become more conscious about the power of video. They say, “You are what you eat,” but actually you are what you watch. So, have a proper diet when it comes to video.