Youtube Jumps into eCommerce

October 8th, 2008 at 12:00 am

youtube google ecommerce music videos itunes amazon partners  

Google’s acquisition of Youtube a few years back was one of the largest price tags paid for a startup.  More surprisingly, it was one of the largest acquisitions for a service that was not even a business.  Basically, Google acquired Youtube without a clear business model in sight.

Fast forward to the present, Google has not yet gotten a return on investment for the acquisition of Youtube.  Although being in control of the world’s largest repository of online videos, Google has yet to see some real money flowing in from Youtube.

Finally, Google has decided to use videos as their product.  Instead of simply putting ads in videos, why not sell the video itself or even just the audio?  This is exactly what Youtube will  be doing with their partner videos.

"Today, we’re taking our first steps to providing YouTube users with this kind of instant gratification, by adding "click-to-buy" links to the watch pages of thousands of YouTube partner videos. Click-to-buy links are non-obtrusive retail links, placed on the watch page beneath the video with the other community features. Just as YouTube users can share, favorite, comment on, and respond to videos quickly and easily, now users can click-to-buy products — like songs and video games — related to the content they’re watching on the site. We’re getting started by embedding iTunes and links on videos from companies like EMI Music, and providing product links to the newly-released video game Spore(TM) on videos from Electronic Arts."

Good move actually.  Youtube carries thousands of music videos uploaded by record labels themselves.  However, the largest potential for this scheme would be selling the videos per se.  Along with their partner members, Youtube  is planning to build an e-commerce platform that can serve any industry that would want to use videos as their promotional materials or products as is.

"This is just the beginning of building a broad, viable e-commerce platform for users and partners on YouTube. Our vision is to help partners across all industries — from music, to film, to print, to TV — offer useful and relevant products to a large, yet targeted audience, and generate additional revenue from their content on YouTube beyond the advertising we serve against their videos. And those partners who use our content identification and management system can also enable these links on user-generated content, by using Content ID to claim videos and choose to leave them up on the site."

Again these are still in the planning pipeline. Nevertheless this business model of selling the videos online may be the best revenue generating model we’ve ever seen from Youtube.