Google may be struggling to land YouTube video distribution deals with entertainment giants such as Viacom and CBS, but the online ad innovator is still gaining traction in the online video business. But, unlike the action it’s trying to start with YouTube, Google’s latest video victories are much closer to the company’s core competency of relevant, targeted advertising.
As today’s New York Times reports, Google has deals with Dow Jones & Company, Conde Nast, Sony BMG Music Entertainment and new upscale broadband network LX.TV to distribute those companies’ video clips across thousands, if not possibly tens of thousands of, web sites.
The videos appear in Google’s standard ad boxes that have, to date, been almost solely used for video advertising alone. But instead of allowing users to watch only video ads, the boxes are filled with relevant programming content that is preceded or followed by the contextual video ads. For example, Young Money, a web site aimed at, well, young people with money, has this ad box from Google featuring a video on cross-country skiing from LX.TV, a broadband video network aimed at…young people with money. The mini tutorial on the winter sport is followed by a video commercial for Research in Motion’s Blackberry.
With a third party now a participant in the advertising transaction, the revenue generated from these clips is split three ways — Google, the video provider and the site owner each get a slice of the ad revenue. Because most, if not all, of the video content providers will be savvy in the ad businesses themselves, Google apparently is willing to cede control over the ad sales, at least some of the time. MTV Networks (a Viacom-owned company) apparently got to sell the ads that accompanied its video content in a test of the new distribution service that Google ran last fall.
Cynthia Brumfield at 9:21 AM|Comments(1)
Does Youtube really even need Viacom?
Its not just youtube whose traffic is surging. Many of the video content websites have experienced an upswing. It's interesting to read that Youtube's early february traffic was greater than the combined traffic of all the network websites.
Youtube clones like http://www.dailymotion.com are also benefiting from the increased attention paid to these type sites.
We can probably expect the big network websites to offer even more videos to try to compete in the future.
Posted by: john at February 26, 2007 10:32 AM
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