YOUTUBE: TIME TO CHARGE USERS?
Over the years Youtube, the online video sharing website, has grown in popularity serving viewers all over the world with a large variety of content, from user generated videos to more premium content offered on an array of channels. Currently Youtube generates its revenue from advertising, in the form of ads on the websites homepage, in-video ads as well as sponsored videos and links (Elberse & Gupta, 2010). While this business model has allowed the company to grow and prosper since its inception in 2005, in order for the website to monetize its videos, a new strategy which sees users paying a subscription fee for access to premium content should be considered. In order to allow Youtube to start
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Pricing is likely to be a sensitive issue when viewers who are used to getting video for free, now have to start paying to access certain content. Similar to the world of cable television, all channels are different when it comes to content and viewership, therefore each channel will look to price itself differently with respect to its competitors. Youtube should perhaps consider an a-la-carte pricing model in order to avoid bundling channels, which people may not watch and therefore will not want to pay for. An alternative strategy would be to start with a small bundle with two well-known channels with a similar audience together with a lesser known channel that has potential for growth, in order to help build its viewership. Based on the success of these bundles, they could then consider slowly adding in more channels. Channel bundling has become a topic of controversy in the cable television, as prices continue to skyrocket with more and more channels being added, hence Youtube should learn from this and formulate a payment plan that will satisfy the majority of its customers and help to limit the number of viewers it may lose due to this new payment structure. While there are other alternative ways for Youtube to monetize, by charging users for uploading videos or continuing to solely rely on advertisers, a subscription based business model is more likely to earn higher revenues for
The main reason for the use of YouTube is that you are able to use videos which are more visually appealing rather than reading and therefore is all in front of your eyes, making it much easy to see for entertainment purposes, business advertisements and many more.
YouTube’s broadened scope presents some corporate use for those businesses with video-worthy content and the desire to share
This model for revenue generation is used extensively in the cloud and Amazon runs it Web Services based on it. They charge a customer for the amount of resources that they consume on a monthly basis. For instance, a customer can start a virtual machine with amazon with a particular configuration at any time. The customer has the option to upgrade his subscription to a new
Hulu is a first mover in this space and is currently enjoying the first mover advantage. However with the ubiquity of internet technology accompanied by lower costs and the commoditization of the technology, the barrier to entry will be reduced and more players will be attracted to the profitable online video business, eating into Hulu’s profitability and success. Also, the increase in IT investments in the internet age causes “a Winner-take-all dynamic and high turbulence, as each group of dominant innovators is threatened by succeeding waves of innovation” (McAfee and Brynjolfsson, 2008) in Schumpeterian competition. This makes Hulu’s success vulnerable.
The large potential audience is the most important consideration when considering a freemium revenue model. In order for a business to grow, it should attract as many people as possible. These users will later on be the ones that will pay for the services the business offers. In order to attract customers, the service that the business
As an individual who is looking to cut cable and pursue a streaming service, I believe that Hulu’s $39.99 Live Stream subscription, as described in the case, could be a strong supplement for pay TV. Although margins for this offering are predicted to be low, I believe that the development of such a subscription illustrates Hulu’s ability to complete market research and listen to consumers. This package indicated that Hulu understands that consumers want Live TV, but wishes to avoid costly bills and wasted
Although there is not much competition in this market, consumers always have alternate methods of receiving the same services and more than likely the same quality of services elsewhere. Whether it is choosing to stream videos online, watching them via “Pay per View” or “On Demand” it is truly a buyer’s market considering the services rendered aren’t considered necessities.
Netflix is an entertainment company that specializes in streaming media and online video-on-demand. Over the years, it has grown to include film and television production and other distribution services. Its business model has changed, and so has its overall production cost grown to keep up with the increased market share. As a result, its current position in the market has made it more exposed to competition from other firms, which is why it needs to develop new strategies to remain profitable. Netflix has grown over the past years despite competition and its unprofitability (Helft, 2007). Therefore, to understand its success, it is important provide a microeconomic analysis of Netflix, its history, its products, and the market.
The emergence of the Internet and the World Wide Web brought upon a medium of communication with a range of opportunities for the world. However, this medium is, in due course, subject to the control of a few major companies. The enigma of information flow is the central concern of net neutrality. Consumers, competition and network owners would benefit directly from the regulation of network neutrality because it would provide a positive impact to those parties as well as provide equality.
Also, the advancements on this stage are as a rule in a condition of concordance with the substance of the video requested, this is another purpose of interest YouTube brings for marketing experts. Certain advancements are given certain recordings since the substance is appropriate. Uncommon open entryways, for instance, supporting a video is in like manner possible on YouTube, "for case, a customer who chase down a YouTube video on canine planning may be given a bolstered video from a pooch toy association in results close by various recordings." YouTube furthermore engage distributers to secure money through its YouTube Partner Program.
The content providing business is a highly capital intensive business. Therefore, the capital required to enter the strategic group and compete is extremely high. To calculate the capital required for a new entrant, we first found the average revenue of the strategic group (~$7.5 billion). We then assumed that a new entrant would have to capture about a third of this average to even make an impact in the industry. Taking this assumption into account, we figured that the new entrant would need about $2.5 billion in its first year of operation. Using this revenue, we then calculated the first year expenses the new entrant would incur.
Essay – The future of the Film and Television industry with the effect of pay-tv and streaming services
YouTube has become the most popular video sharing website. It has variety of functions that enable a virtual organization to operate and have different kinds of virtuality impact. To compare with the other similar enablers, it has strengths and weaknesses.Advertising and marketing is the most significant one. You also can gain different technology impact from it. From the Web Reviews, we can see there are a lot of merits of YouTube. However, the copyright infringement is still the important problem of it.
YouTube’s business model is unique in that the site itself does not create any content. Instead the website provides a location for content creators to post content and for ccontent onsumers to view content. Accounts on the website are free so any user can sign up, upload content and interact in the YouTube community. This brings in the question: How is YouTube making enough money to operate? The main answer is by monetizing the content on their site. According to Merriam-Webster.com, monetize means to “utilize something of value to make a profit”. YouTube used their loyal audiences to sell advertising space to other companies, allowing advertisements to be played before content.
Many people say, "The best things in life are free." However, when we say this, we don’t particularly mean materialistic items. Nearly two years ago this saying was heard by those who may have won the lottery or whom may have been in love and feels that it is the best thing. Nevertheless, a few years ago nearly nothing was free and if it was there was always a catch to go along with it. Now that the Internet has become so popular it is difficult not to find something for free. There are numerous sites on the World Wide Web that offer free items. For example, www.zipso.com, is a site that you are able to subscribe for free offers. The site www.napster.com, is a music site which people are able