Google Inc.’s YouTube, the world’s biggest online video sharing website, has begun showing full-length programs such as Star Trek and Beverly Hills 90210. Google are aiming to build up a more loyal audience to help boost advertising sales. Currently Google displays its Adsense on YouTube, in addition to sponsors videos and trailers. Google hopes that by offering television shows, it will win over some net users who usually resort to file sharing sites to watch re-runs of old shows.
Currently Google have only made an agreement with CBS Corp. but they are in talks with other leading networks and studios. CBS will sell ads for the videos, sharing the proceeds with Google, he said.
Google is seeking new ways to expand beyond the advertisements that appear next to Internet search results, which accounted for almost all of its $16.6 billion in revenue last year. The company has experimented with placing ads in videos and also offers links that let consumers buy products featured in YouTube clips. Google hasn’t yet found an ideal method, Chief Executive Officer Eric Schmidt said in July. Adsense is still an excellent solution.
This news has helped Google’s market stocks as they gained $3.02 to $332 at 4p.m. New York time in Nasdaq Stock Market trading, which in light of the current global economic crisis, is quite an achievement. However the first two quarters of 2008 have not been so good at Google, as their share price has dropped by 52% this year. Earlier in the year there was some concern regarding Google’s reliance on Search and Adsense/Adwords for its income. Although Google is a very profitibale company, it is a case that all of its eggs are in one basket. By selling videos and TV series direct, in partnership with the studios, they have an opportunity to really turn YouTube into a self sufficient platform.
The full-length programs will have commercials that run before, in the middle and after the shows, unlike shorter YouTube segments, which show advertisements in images superimposed across the bottom of the video.
Those overlay ads have been successful, drawing clicks from as much as 2 percent of viewers, which is about 50 times the rate for picture ads on sites such as Facebook, Digg and MySpace.
CBS began showing free episodes of Star Trek and other shows on its Website in February. General Electric Co.’s NBC and News Corp.’s Fox started their own video site, Hulu.com, in March, featuring full-length shows and movies. In the UK the BBC (iPlayer) and Channel 5 (Demand) have both successfully used their websites to allow viewers to catch up on missed shows.
