The news, first broken by Om Malik and now live on the YouTube Blog, that YouTube has launched a revenue sharing Partners Program for its top content creators is a positive step forward for a service that only made $15 million in revenue last year, despite a purchase price of $1.5 billion.
What is notably missing from the announcement is the inclusion of pre-rolls, or similar in-video advertising inclusions for the new YouTube partners, who include LisaNova, renetto, HappySlip, smosh, and valsartdiary.
We’ve covered rumors about the introduction of in-video advertising previously, in January Steve Poland noted the BBC reporting that the advertising on YouTube may take the form of 3 second pre-rolls, but some 4 months later, still nothing.
That’s where we could leave it, if it weren’t for the fact that not only is YouTube not showing a great ROI for Google financially, but the new Partners Program only goes as far as monetizing the actual YouTube page destination with Adsense units. Whilst not without merit, the new program is limited given the way YouTube content is consumed. The great strength of YouTube from its earliest days has been the use of embedded video on external sites: a large number, if not a majority of viewers will never see the advertising, viewing it only on blogs and forums which if they are running Google Adsense units, do so in a way that does not benefit the content creator.
Red Herring reported in April that YouTube was looking to introduce pre-rolls over Summer, but limited to only premium publisher content. Whilst the premium content is a strong driver of traffic to YouTube, YouTube’s sole focus on it for the introduction of in-video advertising would ignore the long tail of user generated and submitted content that was the real driving force for the site in the days prior to Google and its formal content distribution agreements, and as many would argue still is.
The question naturally is why? Why not roll out the option of in-video/ pre-roll advertising to all YouTube content creators? Whilst advertising may not be welcome by every one, Google knows the advertising market and it can credit much of its financial success to date to its inclusive embrace of content creators: Google Adsense today maintains its clear lead due to the broad expanse of publishers worldwide that have not only embraced the program, but were actually able to participate in it, Yahoo’s YPN remains an invite/ United States publishers only service, and Microsoft AdCenter is…well…there, but doing nothing in terms of embracing the long tail.
If technology is to blame, in that Google still hasn’t sorted out the tech behind the delivery of in-video advertising, you’d then ask why the delay, is this Google’s Panama? Google Video did exist prior to the YouTube acquisition so it’s not like they’ve only had since September to start work on the technology, and given that smaller startups including sites such as Revver can do it…well I guess there’s always the off chance of yet another video oriented acquisition.