YouTube's Head of Monetization Quits, Joins Cooliris

37 Comments

Google’s senior executive exodus continues. YouTube’s head of monetization, Shashi Seth, has now left the company to become the chief revenue officer of Menlo Park, Calif.-based startup Cooliris. In his new job at the startup, which has raised some $3 million in Series A funding from Kleiner Perkins Caufield & Byers, Seth is going to help develop a new business and advertising model. [digg=http://digg.com/tech_news/Where_s_the_Money_YouTube_s_Head_of_Monetization_Quits]

“I think part of being a Googler is that you like smaller environments, and I think Google got a little big for me,” says Seth. He was appointed as YouTube’s head of monetization in January 2007. It has been a thankless job.

Despite being the largest video-sharing web site, YouTube is still finding it hard to make money. My sources say that YouTube made around $80 million in 2007, a number that could grow by more than 50 percent this year to around $125 million. A Bear Stearns report estimated YouTube revenues at around $90 million for 2008. I’m not sure if $120 million-$125 million is going to make Google CEO Eric Schmidt, who has been publicly talking about YouTube and its money-making potential, happy.

What stands between YouTube and money is the lawsuit by Viacom, as it makes owners of legitimate content a tad nervous. There’s clearly money in partnership content. I was recently talking to some folks that are close to Hulu.com, and they pointed out that thanks to all the legit content, the demand for ads on the site is pretty high; the company, they said, could easily do about $25 million in revenues. Given how little traffic they have in comparison to YouTube, that’s an impressive number. Of course it doesn’t move the needle for its primary backers, NBC and News Corp.

In comparison, the number of visitors to YouTube continues to rise, making it by far the most dominant player in the market. So much so that even Hulu decided to set up a channel on YouTube to attract traffic to their site.

37 Comments

Danny Mack

Frankly, I’m shocked to see the struggle the video industry is having monetizing their content. I think the struggle is based largely upon everyone trying to take a shortcut..namely – advertising. If advertising isn’t cutting it for some, then why not take larger risks in developing revenue streams.

For example, what if you sell ad space on a website that hosts real-estate related content. There may be an ad there in which you get a few cents for a click-thru or impression…let’s be generous and say a buck. That ad may be placed by an affiliate…let’s say for Lending Tree. The affiliate will now get $40 if they fill out an application. The lending tree, will in-turn get $75 from 3 to 5 lenders for that application. As you can see, the short-cut ad gets a buck, the affiliate gets $40 and the lending tree gets up to $375. Now continue to chase the money…if they get approved for a mortgage and buy a house, the broker gets thousands! If I had a real estate related site, I would try and get as close to the thousands as possible.

Ads are easy, which is why they don’t pay well.

Ads are often used to generate leads. If you are a source of video content for investors, you can send your users elsewhere via ads that fill out contact info for more premium info on investing. These leads are then sold to brokers for $5 to $75. The brokers then make thousands. Once again, I would be more interested in turning the visitor into a lead and then selling the lead…instead of the ad once again being on the small end of the funnel.

Monetizing isn’t the problem…tracking end sales and trying to take a piece, that’s the challenge….and it’s just that – a challenge, not a problem. A more difficult road for greater rewards.

YouTube has a ridiculous viewership. They can probably sell t-shirts and make more money than they do in advertising. If I were them, I would:
a) Be a super affiliate
b) Capture and convert viewers to leads, then sell the leads at a premium
c) Sell! What does YouTube sell? Ads? How about apparel, electronics, video games? You don’t even have to stock inventory, create a amazon-like model.

The first ad on my next site? It will be to sell my Toyota Camry for $4,000…a lot more than google ads will be giving me for the same space!

Guillermo Hernandez

desde que instalé coolirirs en mis computadores del colegio y en mi notebook , no consigo abriri videos de youtube, hice mi regristro con cooliris y tampoco resultò. Esto es algo que les pasa a todos?..
gracias

charles

Hi!

It might be that Seth is want a little company but earn big bucks. Still, i oppose to Seth Decision. He should have let YouTube pay him more. I think youtube could afford that. If he should have bought a little time to increase the offer, he would have a earned more now.

el toro

word is that he was booted cause he did not deliver. most of the views on YouTube are of User-gen-content, which is of unknown rating and ownership. so can’t naively mix pre-rolls, overlays or banners with those.

@charbax-for the above reason, you will find that youtube only puts overlays or banners on what they call promoted videos i.e licensed content. but those videos are boring and seldom viewed.

WorkingMan

Apparently Shashi is living this line from careerists: it is better to *have worked for* a big company than to work for a big company.

Varun

Any info on adoption rate of youtube and hulu ?

I guess youtube is more popular in emerging countries compared to hulu which is more popular in the usa

And Hulu has a great future coz I just love the quality of videos on Hulu .. Would they go the subscription way ?

Charbax

Doing a quick calculation, based on the current 4 billion views per month, Google and the Youtube content providers could be making 2 billion dollars per year just on Youtube activity if they activated that overlay advertising option now. (only Youtube content providers who activate it would display it on their videos).

And since the quality of the content would skyrocket the day putting quality videos on Youtube makes money, the view count could also increase even further to tens of billions of views per month.

Charbax

I don’t get it. Youtube could be making billions of dollars right now. It should be bigger then AdSense for text the day they switch on the overlay advertising option for all Youtube producers, not only the very large (more than 1 million views a month) producers having text based ads on the right side of the html page.

I also don’t understand why Youtube doesn’t use voice-recognition technology to generate transcripts automatically as well as translate that to provide searchable subtitles in all languages.

They’ve been talking about $15 per thousand views for overlay advertising (Revver style) popping up at the bottom 1/5th of the video. This should work for embedded videos as well.

Youtube should let all content providers even small independent ones make those up to $15 per 1000 views for choosing to activate the overlay ads. This would improve the quality of the content put on Youtube enormously. This would instantly convince all TV show producers as well to put their full length episodes on Youtube instead of Hulu or any alternatives.

I think they have a responsibillity to start the true online TV and media revolution. Once independent freelance artists and reporters can start to make a living publishing on Youtube, this will immediately change the whole TV industry, this will also influence elections for the better.

DogLuvr

I heard he had a falling out with that skateboarding Bulldog. He is the real rockstar, and could not work with this guy.

Jimmyy The Junior

Is this “$80 million in 2007” pure profit, or the total income? And i also guess they will make more money in 2008, after all Google,who happens to own YouTube, determines how much a site should get from Adsense,right?

Alyssa

I have worked with Shashi and think that he is a rock star! The Product Managers who worked for him are all very sad that he left, and I personally know that many other folks who worked with him are very sad to see him go.

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