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by LostInTheWoods
6279 days ago
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The mathematics of most sites, especially the super large ones like Youtube and Facebook, simply do not add up. They are putting all their chips down on some profitable future that I just don't see materializing. Giving aways tons of content, functionality and bandwith is simply not a sustainable operation. In my opinion, the future of the internet will contain a lot of toll booths or perhaps we will find a better way. These large monolithic web services just does not seem the way to go. |
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The real question is whether online advertising will ever bring CPMs in line with TV or print advertising. Personally, when I hear about YouTube not being able to place ads on most of their user-generated videos, it makes me immediately stop and think: is this perhaps just a huge market hole, and a big opportunity for anyone willing to pay for ads on those videos? Are the eyeballs on user-generated videos really worth less than those on professionally produced ones, or is it just that most of the big advertising spenders are nervous about associating themselves with lower quality or potentially offensive content?
Further, are online eyeballs really worth that much less than TV eyeballs?
I still think it's possible that reduced online CPMs may come up naturally over time as more of the entertainment market shifts online. If this is the case there's not much Google can do to help the situation, but it may be worth holding out a while longer to see if things normalize a little bit.
Then again, it's also definitely possible that either a) print/TV advertising rates are a lot higher than they "should" be, and the only reason TV has been able to sustain itself on ads is that advertisers were getting ripped off but couldn't figure out a way to prove it to themselves, or b) online eyeballs are inherently worth less, perhaps due to demographic issues. If either of those is true, free video on the Internet may be fundamentally unsustainable until bandwidth costs come down substantially.