CNet has a good look at how and why YouTube is changing its approach towards advertising, and towards user-submitted content.
In the past week YouTube has announced it will auction off search terms as part of an ad program, called Sponsored Videos, designed to enable anyone to expand the viewership of their videos. YouTube also said last week it obtained rights to post full-length movies produced by a large film studio, Metro-Goldwyn-Mayer. What this means is that YouTube has given up on the idea that user-generated content can be a successful standalone business. It’s about time.
YouTube and AOL are both deciding that people eating crickets is not the path to gold. The novelty of the absurd has its place, but it’s not what you should hang your video views and ultimately bank accounts on.
The truth is the ability of user-generated content to generate lots of cash has been in doubt for a long time. Most of the video-sharing companies that challenged YouTube two years ago have been restructured or switched business models. The most recent evidence came Saturday when TechCrunch reported that AOL will shutter the company’s lightly trafficked video-sharing service, AOL Video Uploads.