One of the criticisms of Google (GOOG) is that it still gets 99.99% of it revenue from text advertising using its search technology. Google spreadsheets, Google finance, Google earth, Google this, Google that. None of it make money.
YouTube is joining that crowd. Not because the studios and TV networks will come after the video sharing site for violating the copyright of their content. Although that may happen.
The problem is more basic. The videos that get the most viewing action on YouTube are awful, and, in some case, barely watchable. As a matter of fact, research firm Screen Digest has released a study that predicts that user-generated content sites will do poorly in their attempts to get online ads.
The most popular video at YouTube is idiosyncratic. There is nothing wrong with that per se, and it may be the huge site’s major charm. YouTube attracted 24.5 million unique visitors in November. That made it the 18th most visited site in the US.
But, if Wall St. looks carefully at YouTube as a business, it is a collection of video with the most watched content being the most bizarre. The most viewed videos of all time at YouTube include videos called Smosh, viewed over 45 million times. This is a collection of short videos done by a young film maker who thinks he has a sense of humor. A lot of people must agree. But, the quality and length of the clips leaves a lot to be desired.
Another popular set of videos are from LonelyGirl15. These have over 30 million views. She seems to spend her time talking about being lonely. Spell-binding.
There is a set of NBC promotions. About 23 million all time views for those.
There are few independent band pieces. The quality is so poor that it looks like the lenses were Coke bottles. Might be a good promotion for Coca-Cola there.
Peculiar, Yes. Popular, Absolutely. Commercial, No Way.
Douglas A. McIntyre can be reached at email@example.com. He does not own securities in companies that he writes about.