There are signs this week that Google is slowly turning YouTube into a legitimate source of revenue, but there are also questions whether that’s happening quickly enough and if the revenue will ever become a profit.
Let’s start with an AdAge article that reports YouTube is selling ads on about 9% of its video views — up from 6% a year ago. A slow increase for sure, but with comScore estimating YouTube showed 5.3 billion videos in February, it means YouTube is selling ads on almost 500 million video views. According to AdAge, that’s more videos than its nearest competitor has total views.
Meanwhile, Google has announced that YouTube’s Click-to-Buy advertising/e-commerce platform is being expanded to eight more countries: Australia, Canada, France, Ireland, Italy, Japan, New Zealand, and Sweden. Click-to-Buy is a system that places ads (links) below the video so viewers can purchase the song, CD, DVD, and video games related to the videos they’re watching. Google says three of the four biggest music labels are part of the program, and are “selling millions of songs” through these links.
But is all of this enough?
The AdAge article points out that Google itself has admitted it’s not making “significant revenue” from YouTube, and current estimates for its ad revenue range from $120 million to $500 million. Silicon Alley Insider looks at these numbers under the sensational headline, “YouTube Is Doomed.” Says Benjamin Wayne:
“YouTube is adamant that ultimately they’ll find an advertising solution that will enable the ungainly behemoth to reach profitability. Looking at the math, it doesn’t seem likely.”
What do you think? Is YouTube doomed? Can Google turn it into a moneymaker without turning away its loyal userbase?