Youtube moves from loss to profit with new ad strategy
Youtube is becoming increasingly fertile ground for advertisers with the video sharing service signing revenue sharing deals with publishers.
These deals see Youtube granted permission to leave copyrighted content online in return for a split of ad revenues generated by the clips which now feature within the video stream or pop up at the bottom of the window.
Under the deal a system called Content ID is used to automatically scan uploaded videos in order to compare them with an archive of material provided by copyright owners. If there is a match Youtube will insert an advert into the file with the proceeds divvied out between the service and the copyright holder.
More than one third of Youtube’s two billion ad views each week are now said to fall into this category, sufficient to transform the loss making enterprise into a profitable one.
The shift marks a change in emphasis on Youtube’s part from traffic building to revenue generation, a move which has coincided with an uptick in the notoriously hostile relationship Google, Youtube's parent, once had with copyright holders.
Money talks it seems and both sides are now eyeing the lucrative potential of partnership, a view stressed by Youtube’s co-head, Salar Kamangar, who said: “Ads can be a lot more effective when they’re delivered over I.P. instead of cable or broadcast, because they’re delivered personalised to you.”