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YouTube Debuts Click-to-Buy: E-Commerce for Video

Posted by: Rob Hof on October 07, 2008

Kissed link.JPG
When even Google CEO Eric Schmidt and cofounder Larry Page admit their YouTube video sharing site might take awhile to make more money than the sub-$200 million in revenues that analysts expect this year, you know they’re struggling to find fundamentally new ways to do that. Today, YouTube debuted one small but potentially significant way the site might extract more dollars from the 5 billion videos it serves per month: click-to-buy buttons. (A post on Google’s official blog and on the YouTube blog, with more details, is after the jump.)

As people watch videos on YouTube, they’ll be able to buy the song, a game, or eventually other products related to that video, via the buttons you can see at the bottom of that photo at the top of the post. Here’s one example on a Katy Perry video, and here’s one from Electronic Arts where you can buy the new game Spore from Amazon.

So far, only and Apple’s iTunes are involved. When you click on those links, you’re taken to or the iTunes store. But in coming months YouTube plans to roll out click-to-buy with other partners in music, film, television, and publishing. It’s part of a broader e-commerce platform, the shape of which YouTube is keeping under wraps for now, says Bakari Brock, YouTube’s business affair counsel. “There’s a lot of promise for this,” he told me. He envisions sales of everything from concert tickets to the cool sunglasses an artist is wearing.

For now, click-to-buy involves the direct merchants (Amazon and iTunes) selling digital products. But eventually, Bakari sees other advertisers selling against videos.

Click-to-buy joins several other recent moneymaking opportunities at YouTube, such as in-video ads that run at the bottom of videos 15 seconds after they start, contests, and a content identification system that allows video owners to share in revenues from ads placed against their content. Interestingly, says Shishir Mehrotra, YouTube’s director of product management for ad solutions, content owners told YouTube to “monetize” 90% of the videos they claimed, rather than having YouTube simply take them down. (Not surprisingly, Viacom, which is suing Google over unauthorized video clips on YouTube, isn’t part of that 90%.)

For all that, it’s apparent that YouTube, for which Google paid $1.7 billion in 2006, still has a slog ahead to make money on the popular site. A few weeks ago, Schmidt insisted that YouTube has the “luxury of time” with YouTube. I read that to mean that, while click-to-buy looks promising, even if it takes off YouTube will still need to come up with a lot more ways for advertisers and video partners to reach people watching the videos.

YouTube, which generally doesn’t run clips over 10 minutes long, also announced a test of full-length videos, with new theater-style views, shown below.
Theater View Lights Off.JPG

Here's the Google blog post:

I clicked to buy and I liked it

By Glenn Brown, YouTube Strategic Partner Development Manager, and Thai Tran, YouTube Product Manager

When you view a YouTube video with a great soundtrack, you often see comments from YouTube users asking about the name of the song and where they can download it. Or when users watch the trailer for an upcoming video game, they want to know when it will be released and where they can buy it.

Today, we're taking our first steps to providing YouTube users with this kind of instant gratification, by adding "click-to-buy" links to the watch pages of thousands of YouTube partner videos. Click-to-buy links are non-obtrusive retail links, placed on the watch page beneath the video with the other community features. Just as YouTube users can share, favorite, comment on, and respond to videos quickly and easily, now users can click-to-buy products -- like songs and video games -- related to the content they're watching on the site. We're getting started by embedding iTunes and links on videos from companies like EMI Music, and providing product links to the newly released video game Spore(TM) on videos from Electronic Arts.

This is just the beginning of building a broad, viable eCommerce platform for users and partners on YouTube. Our vision is to help partners across all industries -- from music, to film, to print, to TV -- offer useful and relevant products to a large, yet targeted audience, and generate additional revenue from their content on YouTube beyond the advertising we serve against their videos. And those partners who use our content identification and management system can also enable these links on user-generated content, by using Content ID to claim videos and choose to leave them up on the site.

These retail links are being gradually added to our library of music videos and are currently only available to users in the United States, but our goal is to slowly but surely expand the program to additional content and product partners, as well as our international users. We'll be experimenting with the UI over time to make sure this works for our community, and we'll continue to innovate based on your feedback. We're just getting started, so stay tuned for other innovative new features and product options soon.

YouTube partners interested in this program should contact their partner manager.

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Reader Comments


October 7, 2008 11:45 PM

I've been wondering when Google would kick off their YouTube monetization strategy...Finally, it has started. I think the advertising potential for video is great, and youtube is perfectly positioned to put it into practice. My favorite ad model is product placement in videos. With the introduction of new technical standards that video distribution sites (like youtube) can understand, video producers can technically and legally allow for product placement to be interactive while a video is being watched. A video can be paused and product placement can be directly accessed via a click. It is taking the adsense ppc model to video, only ads are recognized by producers, and not contextually. The viral effects of that are huge, as we saw in the spread of adsense being applied to relevant third party websites, etc... I am a big fan of that, and think that ultimately, that is the most effective advertising model via video. The most important thing is keeping it non intrusive.

So here are the types of planned youtube ads:

-click to buy button (like)
-in-video ads (don't like, find it intrusive, and untargetted)
-rewarding video content creators/producers (foundation to keeping the engine running, should've been implemented long ago, of course, they couldn't do so cause they hadn't yet figure out how to monetize the site themselves)
-product placement (Love it...I think this is the breakthrough in video, because of the flexibility the web offers) (For instance, I like this laptop this guy on the video is using....pause laptop...get a pop up with stats of laptop, change it to my needs, buy it, or send it to email for later review) Also applicable for TV, cause we know TV's will soon be powered by the web. TV should soon be acknowledged as a monitor, powered by a pc.

It is the 'TV 2.0,' where the once static HTML pages with boring and not interactive broadcasting of content is revolutionized, again, by the Internet, allowing viewers to interact real-time via its new, dynamic environment.


October 8, 2008 12:59 AM

Oh, well. Neither Amazon nor iTunes lives in India. Yay once more for a "The US is the Internet" business decision.

Guna Doad

October 8, 2008 10:19 AM

Google is the best !
The ability to try put something and then buy it sounds amazing !
I think it is what the customers want !
They want more to see stuff they want and go for it and have a wide range to choose from

Randy O

October 8, 2008 05:18 PM

Well I was hoping to beat YouTube to the punch on making an announcement. I have been developing this on my site It seemed only logical for YouTube which is now becoming the place for artists to get exposure, to incorporate links for people to purchase MP3s. I show a link to Amazon next to every live music video I display. Works pretty well. But because the video title also contains location information. I inform my customers to click the link then remove any extra text from the artist information for better results. But I will make improvements in the future.

More power to YouTube's success with this. I certainly believe in the concept since I developed this too. More improvements in the future since this the site is still early stage. But I wanted it documented that I did this first before YouTube made their announcement today.

-Randy O

david wayne osedach

October 9, 2008 11:30 AM

This latest innovation by Google's You Tube to try something before buying it is just what customers in our beleaguered economy want.

More innovation by Google!

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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