advertisement
advertisement

Rumor: YouTube to Show Sony Movies, as Ad Revenues Plunge

A Credit-Suisse analyst is currently saying that the world’s most popular video-sharing website, YouTube, is heading for a loss at the close of this year as it only implements advertising on a fraction of its web pages. Simultaneously, a rumor’s arisen that the site may show full-length movies from Sony’s video stable.

A Credit-Suisse analyst is currently saying that the world’s most popular video-sharing website, YouTube, is heading for a loss at the close of this year as it only implements advertising on a fraction of its web pages. Simultaneously, a rumor’s arisen that the site may show full-length movies from Sony’s video stable.

advertisement

According to analyst Spencer Wang, YouTube sells adverts on only around 3% of its web pages. He suggests that this is indicative of difficulty monetizing the Google-owned business and as a result cut his profit estimate for Google’s shares by about 3%. His prediction is that at the end of this year YouTube will make a loss of $470 million dollars. That’s a heck of a big red number, and involves some of the same sort of thinking about Twitter–whose ability to monetize a huge user base is definitely under the spotlight.

Wang suggests the problem at YouTube is actually three-fold: Falling ad revenues due to recessional spending cut-backs, having a non-standard advertising format and not making good demonstrations of how YouTube ads can push products. The first is difficult to avoid, but the others are more manageable issues, which could be “fixed” relatively swiftly.

Of course another way to drive up revenue and profits is to attract more users to the site. Which is maybe why a rumor has just arisen that YouTube is courting Sony for access to its library of films. So far the site’s shown only a limited number of MGM movies and TV shows, and has recently concluded a deal with Disney to show some content from ABC, ESPN and Disney itself. The rumor, which arose on Cnet, is unsourced, but talks about a few specifics such as a license deal from Sony and ad-supported movie streams. A full movie deal with Sony would be a big win, potentially attracting many millions more site users, and thus enabling an enhanced income from advertising both from inside movies and from ad placements on user-sourced content.

One thing is clear, if Wang is right: having a hugely-popular website with 100 million visitors per month isn’t an excuse to get slack about attracting revenue, or a guaranteed license to print money in the current financial climate. 

[via SeattleTimes, Electronista

advertisement
advertisement

About the author

I'm covering the science/tech/generally-exciting-and-innovative beat for Fast Company. Follow me on Twitter, or Google+ and you'll hear tons of interesting stuff, I promise. I've also got a PhD, and worked in such roles as professional scientist and theater technician...thankfully avoiding jobs like bodyguard and chicken shed-cleaner (bonus points if you get that reference!)

More