YouTube business model

April 2005, YouTube just opened, and there’s practically no video on the site and no information about it. It’s not about its popularity or the number of visitors, because almost nobody knows about its existence. But the people at Google were able to spot the goose that lays the golden eggs. A year and a half after the start of the project, the company bought it for a billion and a half dollars.

Experts saw a promising business model and praised the team working on the project. They made a bet on:

• Hosting video clips, high quality, with virtually no restrictions
• Live and on-demand videos within one service
• Use of the latest technology
• Individual recommendations as a result of neural networks
• Possibility to transmit and playback video on any devices without buffering by means of dynamic transcoding.
• Availability of modern data centers and powerful servers across the planet.

Users received all these services for free. It was a bold, unprecedented move at the time, and it paid off. Ten years later, there’s not even an approximation of the site. About 80 percent of all video goes through YouTube’s servers. Today it is a monopolist, although at one time it was not even seen as a prospect, except by Google.

The secret to its success is its business model. No one demanded money to use the service. The user simply could not get past such a thing. The monetization process was organized competently enough so that visitors would not pay attention to it unnecessarily.

Going to, create a similar site, make it free of charge, so that in the long run it will be competitive.

Taking advantage of YouTube’s disadvantages

At the time of its creation, YouTube was positioned as a free video hosting site. Everyone could post content, everyone could view it. In fact, it wasn’t possible to target an audience, but the trend has persisted. There were restrictions on content that called for violence, racism, breaking the law, etc. The breadth of user coverage is an undeniable advantage of the service, but the lack of a targeting group is a disadvantage. If you can skillfully exploit this drawback, you have a good chance of creating a more popular service.

An excellent example of an appropriate policy showed Netflix, focusing on movies and TV series. For streaming gamers there is nothing better than Twitch. Tv.com’s target audience is fans of popular TV shows. The success of Pornhub cannot be overlooked. Among 18+ subscribers, it is one of the most visited video hosts.

No matter how much money and human resources YouTube spends on combating unethical content, still radical users often post videos with scenes of violence and promote racism. Terrorist organizations are not even shy about filming execution scenes. It happens that a considerable period of time elapses before these clips are removed by the moderators, due to the sheer volume of information.

Fakes and copyright violations are another pain point for YouTube. The company’s management admits that with such a large volume of free video hosting service, effectively combating these problems is not easy. Tracking and controlling the fake videos that appear is simply not possible.

If there is a need to create a similar site of your own, you can and should play on the disadvantages of your competitor:

• Having determined the target audience, you can build solely for its interests. It will be easier and simpler to promote and promote. The sphere can be anything. A place to watch sports events or popular science videos, you can select a specific language group or country.
• Develop and implement effective tools to control and combat plagiarism and fake throw-ins. It is possible to implement this idea through moderators or a feedback rating system.
• Blockchain technology can help in controlling controls that require licensing.

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Before you create a project like this, think carefully about why you need it. Remember that hosting will cost you much more than when you create a satellite site or a simple project. Although you can always use ready-made videos from “Facebook” or “YouTube”, which are inserted into the site using code. If necessary, you can close them from being indexed by search engines. Think about how you are going to make money from your video site, are you ready to create your own videos or will you use ready-made ones, which can also attract visitors if you do it right.

Today, almost every site uses videos because it’s convenient, search engines and site users like it. Many make money from their YouTube channels by creating their own videos. But what are the peculiarities of creating a video site?

Newcomers in this business, catching fire of this idea, first of all think, what is the best engine to choose. Some stops at DLE, while others are more experienced know that there are more adapted for the creation of a video site engine. Take for example the same PHP Melody. These engines look very nice, have a lot of options. They are easy to use, since the keywords can parse video from popular video resources such as MTV, YouTube, etc. The database can be imported very easily, so the best solution is to use a ready-made engine designed for the video site. Here’s just to understand that almost all of them are paid, and those that are distributed freely, have much poorer functionality.

The benefits of selling videos on the site

• According to statistics 65% of visitors who come to the page will watch the video.
• The video format allows you to convey a lot of information in a minimal amount of time.
• The average duration of a video is 1 minute, which is how long the average user can focus their attention.
• During this time you can tell about your offer in the video, indicate special conditions and make accents on the main benefits.
• Half of the users don’t leave the site for 3 minutes after watching the video, analyzing the special terms.
• Up to 35% of users can subscribe to the mailing list or register on the website after watching the video.
• Profit growth from 30%.

As you can see, in addition to creating a website with videos (movies, clips, video lessons, etc.), you can effectively use videos in your business, that is, on the sales pages. That said, it’s a good idea to know the ins and outs of creating it, but that’s another topic.

What kind of business is a selling video suitable for?

• Commercial organizations – for advertising their goods.
• Startups – for introducing your profitable offers to the target audience.
• Television companies – a video catalog of services.
• Complex technical services, services and products – allows you to explain clearly.
• Financial organizations – creates prestige and image.
• Medical institutions – creates customer confidence.
• For training centers – a detailed presentation of products.
• Other types of business – for presentations, announcements and direct sales.

Video is widespread on the world wide web. If you decide to engage in the creation of websites with videos, you have every chance of success.

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With advertising, everything is clear. You can watch it repeatedly during the course of a video, with the option to skip it after a few seconds of viewing. Profits from this type of advertising are shared between the company and the channel on which it is presented. In addition to this, contextual advertising is actively used.

After becoming a subscriber to YouTube, you can use its functions for free, but for a small fee you can also subscribe to a premium subscription, which allows you to watch videos without advertising. Interestingly, its cost differs depending on your geographic location.

Due to the appearance of popular video content in the network: TV series, TV shows, premieres of movies, the company decided to provide an opportunity to watch them first in high quality by paying to watch one or a series of clips. On average, you’ll pay from one to ten dollars for one video. And for several, such as a season of a TV series or show, about thirty.

Creating your own video hosting, you need to clearly understand where the money will come from. Many ways are unpopular, and the main source of income is the placement of advertising. The main thing is not to overdo it and do not turn viewing videos in solid advertising, you just lose subscribers.

At the first stage, you should refrain from advertising and minimize attempts to monetize it. This will open up a stream of subscribers without limiting it to anything. Over time, you’ll get your audience, at which point you can start introducing ads and charging money for paid content. Pornhub followed this line of development and achieved its goal by introducing both ads and fees for premium accounts later on.

Types of users

It is very easy to make the site popular, and therefore subsequently make a profit from it. It is necessary to consider the wishes and interests of all users: viewers, video creators, advertisers.

Viewers – this is a primary category, which should keep the focus. This is the ultimate consumer video services, and the popularity of the video depends on them. The number of viewers makes a video product or user channel more or less valuable. To attract viewers, you need to take care about the quality of an interesting exclusive video, you should also work on the design and simplicity of the interface, and get rid of annoying annoying advertising or minimize its impact.

The next category is those who produce videos. This can be video bloggers, streamers, music bands, travelers, anyone who will fill the site with video content. It is their work will attract viewers, respectively, for them to make a comfortable environment so they want to be posted at your place, not on the same YouTube.

In addition to the creators of the videos, there is a category of people who can increase interest in them. These can be celebrities, athletes or stars, in short, those that the viewer is willing to watch.

A popular move by video hosting owners is to bring in media stars on a paid basis. This can be a one-time promotion or a regular appearance of a famous person on the channel. Advertisers are another target audience, the one that makes a profit. Through quality content, millions of subscribers and hundreds of thousands of views, hosting owners get close to advertisers. This category, which pragmatically evaluates the service, choosing the most popular channels that meet the requirements of the target audience. It turns out that it is impossible to attract them directly, only through quality content and a growing audience of subscribers.

With all the nuances in mind, the marketing strategy should be built around quality content. Only after filling the site with videos, you can start talking about actively attracting viewers. And only in the last turn will we talk about advertisers and monetization.

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