Not that anyone has asked me, but this morning I was thinking about what it would take to save YouTube.  As we know,  YouTube is bleeding money and the advertising model is not going to cover the enormous bandwidth costs.  So to deviate from my normal posts about emerging marketing opportunities and examples I’ll offer my thoughts:

1. Micro-Payments

• I’m a huge fan of the Micro-Payment model and am keeping a close eye on how it moves from success in Asia to the US market.  I see a place for Micro-payments on Youtube.  For instance, let visitors watch 2 hours a month for free but then charge 10 credits per any video over 2 hours.  Credits can be purchased for $1 per 100 credits (or whatever the math needs to be to make a profit).  Give away 2 hours free — or whatever the number needs to be?  This will keep YouTube as the number one video site since most users are under 2 hours while monetizing the hardcore users.  Why credits?  Because advertisers now can give credits away for free to make their ads more relevant on YouTube — e.g. “Watch My Ad and Get 100 YouTube Credits” (see math below)

1. Premium Semi-Pro Content

• YouTube should foster a community of semi-pro content producers then charge for access to that content.  They should invest in semi-pro episodic cartoons and live action shows, use the Google properties to market those shows, give the first episodes away for free, then charge $0.99 per episode after that.  They should also get a percentage of the future revenue generated on the IP so if the show goes pro they get a piece of the action.  The next Simpsons or The Office should come from YouTube rather than ripping off UK ideas.

1. YouTube Cable Channel

• Work a deal with Viacom to create a YouTube Cable channel that is a 24 hour cable channel with non-stop YouTube clips.  Basically run the clips that show up on : www.viralvideochart.com then sell ads on top of it.  Since these are actual TV ads they will garner TV rates — not the internet rates YouTube now enjoys.  This creates a model where YouTube.com is the feeder to YouTube TV that monetizes the content.  As for the copyright issues — I don’t have a solution for that one.

Those are three ways to monetize YouTube which I am sure Google has already worked through  and figured out why they won’t work.  But I thought I would share my thinking on the issue — it would be a shame if we lose YouTube.

ADDED:  I was thinking I bit more about this an wanted to see how the math would work out.  In March 2009 YouTube had 89MM Uniques and the average time people watch online videos is 190 minutes per month (source: Neilson – that’s for all video not just YouTube but we’ll use that number since YouTube is the majority).  If we give away 120 minutes for free that would leave these 89MM viewers, on average, with 30 minutes to pay for.  If YouTube charges $0.01 per minutes we would have $0.01 x 30 minutes X 89MM = $26.7MM per month.  They are estimated to lose ~$450MM in 2009.  This would give them $320MM of that.  If the consumer behavior stays the same when they have to pay — which we know won’t happen.  But its an option.

There has been a ton of press on Twitter in the last couple months.  So much so that Oprah has now done a show all about Twitter.  She does a great job of explaining what Twitter is in the above  YouTube clip.  As marketers here are a couple things to keep in mind:

• Twitter has no revenue stream — no business model.  The logical model would be paid key word driven advertising.  Where you could post an ad next to a Tweet that includes the desired key word.  The problem with this is that Twitter is a social networking platform and Click Through Rates have so far been unsustainable on SocNet sites.
• A business can start their own Twitter feed for a very live and personal connection to the brand’s fans.  The data suggests that the traffic is mainstream — check out these articles from ComScore.  But as they note, the mainstream-ness of the traffic may be more from the media coverage then actual usage.

http://www.comscore.com/blog/2009/04/twitter_traffic_explodes.html

http://www.comscore.com/blog/2009/04/breaking_news_and_making_news.html

• For ideas of what to do with your Twitter account check out this post by Chris Brogan:

http://www.chrisbrogan.com/50-ideas-on-using-twitter-for-business/

• Is Twitter an avenue you should explore?  There is no cost to entry other than the commitment — which is significant.  You’ll need a resource to keep active in the Twitter community to make the effort worthwhile.  Check out Twitter feeds from Sprint and Graco for ideas of what marketers are doing on Twitter. To answer this question ask yourself:

1. Is your audience on Twitter
2. Do you have a robust mutli-touch Social Networking program that would benefit from Twitter?  Twitter is not a isolated tactic — it needs to be apart of a complete communication strategy.
3. Do you have the resources needed to commit to Twitter.  Don’t just post your monthly coupon offer — it’s not worth it.  You’ll need a community manager to spend significant time managing your Twitter efforts.

Online Coupon Redemption Rate

Online coupons, as we’ve previously discussed, are growing considerably.  This growth is most certainly driven by the current economy; however, don’t expect it to go away after the economy recovers.  Consumers are getting into the habit now to Google for coupons before heading to the mail.  Marketers can use this new behavior to their advantage by driving those consumers to specific products and offers.

One thing to note, as illustrated in this data point from eMarketer, is that online coupons redeem at a much higher rate than printed coupons.  This is because the consumer is proactivily seeking out and printing an online coupon that often requires the consumer to install software to print the coupon.  When you build your budgets keep this in mind.

Jack in the Box Viral Campaign

This example from the QSR Jack-in-the-Box gives us some very valuable insights into a very robust Social Networking / Viral campaign.  Check out this articles from Clickz (link here).  The details are:

• Campaign gets kicked off with a TV spot aired during the Super Bowl that shows the Jack-in-the-Box mascot “Jack” getting run over by a bus.
• Fan’s of the brand are then encouraged to follow Jack’s condition on the web site HanginthereJack.com,  28 viral videos updating Jacks condition on YouTube, photo’s from the accident scene on Flickr, updates on Facebook,  MySpace and Twitter.
• User Generated Content is solicited in the form of “get well notes” for Jack.

Some results:

• Over 12,000 fans on the Facebook page
• Over 7000 followers in Twitter
• 600 followers to the YouTube channel
• Each of the 28 videos were viewed between 50,000 and 200,000 times

Clickz lists Apollo Interactive as the agency behind this very robust effort.

Thoughts:

• Wow, this was a very robust campaign around a great theme.
• The response was impressive.  Especially the YouTube video views.  It’s difficult to get these kinds of numbers.
• I assume a lot went into the campaign AND a lot went into promoting this campaign.  The Super Bowl spot alone was several million $$.
• The big take away for me is that in order for a Viral / SocNet campaign to be successful it needs to tap into a message that will resonate with the audience.  In this case — hoping Jack comes out of his coma — hit that nerve.