Tuesday, June 27, 2006

YouTube finds a revenue stream?

After hearing about how yours and my favorite video repository YouTube was spending upwards of $1 million on bandwidth a month, I was sure that they wouldn't last long. With $11.5 million in venture capital and an ad-supported business model that has only recently materialized (they didn't receive a penny of revenue until March of this year), I couldn't see how they'd survive the year. Haven't we learned anything from our days in the world wide bubble?

Without a revenue stream to speak of, and with mounting legal pressure from NBC, CBS and other content owners (allegedly) over their content, things weren't looking good for the popular upstart. Don Dodge offers an interesting perspective on the legal minefield that is their bread and butter. Now, it seems that YouTube is finding a new revenue stream with NBC. After receiving scathing criticism in the blogspace for their handling of YouTube, NBC has finally noticed that there might be an opportunity in using the site to generate buzz for their new shows:
"These viral sites are interesting to us in instances before a show becomes an asset and we are trying to expose it to people," says John Miller, NBC's chief marketing officer. "Once something becomes a hit it's a different story. Our interest here is generating revenue for ourselves." (WSJ.com)
Now there's no mention of dollars and cents here, so it's hard to tell what's in it for YouTube. NBC, however may have gained a powerful partner for viral marketing on the web. At the very least, they stand to save some bandwidth by hosting their videos on YouTube.

YouTube and NBC. Strange bedfellows indeed. YouTube may just survive past the year's end after all.

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