YouTube, the next eBay
Posted by direwolff on April 5, 2006
The metaphor I’m drawing on in the title goes as follows, eBay started out as a marketplace for individuals to be able to find quick liquidity in goods they wanted to sell. The auction model was innovative and it built a large audience of buyers quickly. This natually lead to actual merchants seeing eBay as a source for audience and prospective customers. Today, I believe something like 80% of eBay’s revenue comes from professional merchants selling goods on the site. They built it for organic use and the professionals came in and took over.
With YouTube’s announcement today, we’re seeing the whole thing happen again, but this time with videos. Here’s a link to the press release:
Effectively, what’s happening is that because YouTube has developed an innovative site for the upload and viewing of videos. As a result they drew a large audience for the user created videos quickly (yes, and some professional videos (ie. SNL skits) that shouldn’t have been there). This has gotten the attention of studios who are looking for all sorts of ways to promote their TV shows and movies online. With this deal w/G4 for the new “Star Trek 2.0”, we begin to see the emergence of a business model for YouTube that could really go a long way for them. We can also now expect to see much more professional content being uploaded to YouTube as the studios see this as a perfect promotional oppty for their properties. For YouTube, it’s where the money is.
UPDATE – 4/17/06 Article in USATODAY:
“Nike, Warner Bros., MTV2 and Dimension Films are among the firms seeding the site with commercial clips. Now, along with consumer-made videos of newborn babies, weddings and teens pulling pranks, is a short of soccer star Ronaldinho in his new Nike sneakers.”
Looks like the advertisers came on quickly.