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.

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.

Bid My Cleaning Auction Site

In the last week I’ve come across two new auction sites for professional services.  One from Sears called ServiceLive.com allows you to hire home repair services in an auction format.  The other is Bidmycleaning.com which is an auction site for home maid services.

As the unemployment numbers continue to rise over the next year I wouldn’t be surprised to see a couple other of these auction sites pop up.  It’s a great channel for self-employed or newly unemployed to easily find customers.  And for consumers to hire professionals based on an open social vetting process.  These sites allow the consumer of the service rate and review the service.  Another powerful example of how social networking and reviews are driving confidence in the buying decision.

As an Internet Marketer think about how this trend may develop in the future.  They will be marketing opportunities provided through these auction sites.  Whether it is email list, display advertising, or cost per activity.  This will be an interesting trend to follow,

eMarketer User Generated Content by Type

According to Accustream (link):

Demand for professionally produced and distributed online video continued unabated in 2008, with cumulative volume advancing 24.3% to 41.6 billion views.

According to eMarketer User Generated Content (UGC) is also growing significantly.  eMarketer (link) They are predicting that there will be over 27MM amateur creators of video content by 2013.

My first Internet Marketing job was with a “dot com” that was a platform for user generated content.  Even back then there was this debate over if one type of content,  professional over amateur, would win out.  The data presented here paints a more realistic picture that both will flourish.

HOWEVER, Pro content will get the ad revenue.  I know, I know — we’ll keep trying to monetize USG.  But it will never happen.  YouTube will only start making money when they get serious about pro content — or lose out to Hulu.  If we never can monetize amateur content than what’s the future of amateur content?  I don’t know.  We’ll always have it — but I’m hard pressed for an answer on how to deliver revenue from it.

I recently had the opportunity to talk to a couple marketing classes at Lehigh University about several aspects of Internet Marketing. I also took the opportunity to give these seniors some pointers on finding a job. Below if a video of that segment of the class: