Saturday, June 16, 2007

Youtube Vs. Competitors

I recently got the chance to talk to someone who works with Yahoo! Video. And that set me thinking about the phenomenon of video sharing. So I put on my thinking cap and pondered over a couple of very important existential questions. Questions like: What would the folks at Yahoo! video be thinking? Considering the way in which Youtube dominates the video sharing category, how do others catch up with it? In particular, how do they attract the number of eyeballs that YouTube has been getting and how do they monetize or make money from this traffic.

The Thinking Cap: I use it sometimes

This post is essentially what came out of the exercise (a day-long one). Of course, the issues are fairly complicated and I am pretty new to the video side of things. Over time, as I learn more about this topic my opinions will grow more nuanced and better thought through. Till then I would appreciate any feedback/reviews/comments or suggestions about the conclusions I have drawn.

So, here in well-organized numbered format are my thoughts/impressions on YouTube vs. its competitors:

Thought No. 1: YouTube might be ahead, but its not perfect

Yes, even YouTube needs improvements and there two areas that I can immediately think of. Firstly, it needs to improve the social networking aspect of video sharing. Secondly, it also needs to make it easier to wade through masses of user generated content. Keep in mind the fact that YouTube not being perfect means that there is a window of opportunity to competitors who can get their act together in at least the above mentioned two areas. So what exactly are these two areas and how do they need improvement?

First Area of improvement: I am a great fan of mashing up various forms of content on the Internet. I would like to be able to chat with my friends who are on YouTube while I am watching my videos. As soon as I hit the YouTube home page I should be able to see a box with the names of all of my friends currently on YouTube. Thereafter, whenever I am watching a video I should be able to chat with them regarding which videos suck and which videos are good.

Ideally, I would like all of us to be simultaneously watching the same video rather than seeing it on different screens, so that each one of us is at exactly the same point in the video at any given time. At the same time, there should be a text box below these videos where our thoughts will come scrolling so that we can actually interact with each other while discovering the same content together. Now I don’t know how hard or expensive this is to do technically, but this is something that as a viewer/user I would love to have. It would be like me watching a movie with my friends even when we are each sitting in our own houses.

Like watching a movie together: Only, Remotely

My main point here is that Video Sharing should be more than just passive viewing of videos for entertainment. The net allows this to be more than just Television. It is a dynamic process in which receiving and giving appreciation, writing comments, sharing your opinions and reactions to particular videos and linking up with others having a similar outlook or sense of humor is an integral part of the process. Mixing the social networking/community aspect with the video sharing aspect creates an experience that is greater than the sum of its parts.

YouTube at the moment is just not concentrating on this aspect of the video sharing experience. At the very least they should allow us to know which of our friends are online when we login, user creation of communities should be pushed/made easier to do and the commenting or chatting experience should be made richer by allowing pictures or emoticons etc. I believe this is an opportunity for its competitors to take the lead in the interaction/social networking area.

Second Area of Improvement: Currently, if you search for a particular topic in YouTube you get the results given to you in no apparent order. It’s certainly not in order of popularity. You can search videos on a particular topic, but for that you have to go into the videos section. In which case you would lose on out on being able to list videos by the type of user generating them. Basically, what I am saying is that there are any number of ways of searching for particular videos. In its latest version, YouTube has all this stuff, but its complicated and is not presented in a way that would encourage users to use it. All this stuff needs to be rationalized and put on the home page.

If it were up to me, the following are the things that I would like to see on a Video Sharing homepage:
a) Featured Videos
b) Tabs for different subjects and sub-tabs once you click on those
c) Another set of Tabs for listing by Popularity/Recently Added/Recently featured.
d) A box showing for which of your friends is online
e) Another box showing a console where you would get a summary of new messages, new comments on your video, new replies to your comments and all the groups you are part of.

The YouTube Homepage: Can be improved

Again, I need to say here that this is just my personal opinion, I have no idea of how hard this might be to do technically or how much resources it might require. However, as a regular user of YouTube my personal preference is for this sort of a home page along with an option of customizing this standard format to remove or change elements that I do not find much use for.

Thought No. 2: No stickiness with YouTube

It might sound kind of unbelievable today, but I firmly believe that there is no stickiness around YouTube. Consumers have shifted loyalties before from Friendster to Myspace, from Yahoo/AskJeeves to Google and from Google video/Yahoo video to YouTube, and assuredly they will do so again.

Of course, I do understand that there is a Network effect in place here. A user new to Video Sharing sites today is very likely to favor YouTube simply because there are more users already on it (and therefore more content). However, I do not buy the argument that this network effect will build upon itself and help them seal their dominant position for perpetuity.

In a steady state, if a competitor just copies YouTube and provides all the same features, relying only on greater promotion or cross-selling using it’s other properties, this network effect will definitely dominate. Only if a competitor provides a level of functionality and ease of use that is significantly better than YouTube will it be able to pull away viewers from YouTube. I believe this is exactly what a competitor like Yahoo! video is aiming for when it acquired Jumpcut.

My own previous experience with Hotmail seems to have been along these lines. Since my introduction to e-mail was with Hotmail, I literally grew up using it. Due to this, Hotmail just seemed natural and much easier to use and I resisted temptations to shift to other e-mail offerings when they came up. It was only when Yahoo! Mail came up with an offering of substantially greater storage space that I first tentatively tried it out. Today, Yahoo! is my primary e-mail account even though I still use the Hotmail account. The same thing might quite conceivably happen to YouTube.

Thought No. 3: A direct attack may not work

A direct attack may not work: It is said that you can’t teach an old dog new tricks (or at least not immediately, I believe). Most people who were introduced to video sharing through YouTube will not immediately shift over to a competitor even if it offers better functionality. In large part, this is due to inertia but also because of the sheer number of people and the content already on YouTube.

Therefore, any company that wants to start off by challenging YouTube needs to orient its offerings as well as its Marketing and Promotional efforts towards segments which YouTube is either not serving well at the moment, segments with niche interests or segments which are just starting to enter the video sharing world i.e. New users or Younger users. While I do not have data about the numbers or usage habits of different demographics, I do feel that it is the younger segment which to a large extent decides the way in which the net and its various applications are evolving today. In general, they are also much more comfortable trying out newer things and are probably more likely to enthusiastically adopt and spread the word about a new offering.
Searching for Underserved segments: Look hard
As the critical mass of this offering increases, there will be a tipping point beyond which the older users of YouTube will also start checking out the competition and join the newer users as well as the trendsetters among the web users. However, the question is, who will make the first move? Why should anyone be amongst the first to try out a new offering given the number of users as well as amount of content that is already present on the YouTube networks? This brings me to my next point, which is that it’s all about content.

Thought No. 4: Content is king

There is no doubt that a lot of YouTube’s popularity stems from the masses of copyrighted content: popular TV shows, artistic performances, documentaries, old ads etc. that have been put up there. I do not have numbers but my hunch is that there are more people viewing such stuff than just the user generated content. Months earlier, one of my professors, Mr. Ravi Aaron had pointed out that this was all illegal and therefore this state of affairs could not be expected to last. Sure enough, today we find YouTube getting sued for copyright infringement and videos becoming unavailable all of a sudden.

This provides an opportunity to competitors who can better access to valuable content and a strategy and the relationships in place to acquire content legally. In order to solve the dilemma of who will be the first enthusiastic adopters, these companies will need to first choose a couple of segments that they are majorly interested in. Likely segments to chose might be groups of people who act as major influencers or trendsetters, segments which are currently underserved by YouTube or just those segments which have huge future growth potential. After choosing the segments they have to go after, the companies must be able to manage and get legal permissions for the types of content that will appeal to that segment. By attracting such segments through a mixture of better usability combined with attractive and legal content, the company will have solved the problem of who the first movers will be. These segments will form the core group of users, which will slowly push the application on its way towards accumulating more users and content.


Content: The meat in any offering
Of course, all of this is much easier said than done, but I have no doubt that access to quality content is going to play a big part in who wins out in the future. The player who manages this process better and in a more strategic fashion will have a lot of things going for it.


Thought No. 5: The Brand name question

I also believe that a product which stands against YouTube needs to have a distinctive and unique brand name. Consider Yahoo! video for instance. What one wants from a brand name is an immediate association of the name with the concept of being the best of its category. Unfortunately, given the weight of the associations around the name Yahoo!, one tends to think more of Yahoo! than of video when thinking of the video.yahoo.com. In this sense, the associations that one has with Yahoo! video will to some extent be colored by what one thinks of Yahoo! in general.
The Branding question: Shakespeare said it well
What Yahoo! is trying to here do is to build a Corporate Brand. That too is perfectly understandable from Yahoo’s point of view as the success of each and every product line will actually add to the brand equity of the Yahoo! name. However, from the point of view of the individual product line such as Yahoo! video I believe it is better for them to have a distinctive name, to be associated immediately and strongly with video rather than with Yahoo and a host of other products. My personal belief is that they should go for what our Branding Professor Mr. C.W. Park called H-Branding or hybrid branding. That is they should have a unique name for the video sharing site and also have the name Yahoo associated with it but played down. Something like Courtyard by Marriott with the Yahoo bit being associated with the site as a certificate of quality but not dominating the name, the logo or the site URL. Yahoo! could keep the cross-linking or cross-promotions through its home page and other properties but under the new, distinctive name.

Of course, I understand that right now conventional thinking by all the internet giants is to stress the corporate brand over individual properties and in that sense the individual properties might not have much choice in the matter. However, this is my personal opinion and I know that there are many people who will disagree with me.

Thought No. 6: A small part of a whole system

I believe that over time, it will become much more common to mash up the various formats (such as Text, Videos or Pictures) that are available today. That is, consumers will not want to watch videos exclusively but they would want to chat with their friends while watching videos and videos integrated or embedded with blogs or on the profiles of social networking sites will become much more common. Perhaps we could also have the ability to actually embed a video in an e-mail rather than sending a link in the future.

MySpace videos or niche sites like ZingFu.com or bunnyherolabs.com all attest to this trend whereby consumers and specially younger consumers are showing much higher comfort levels with mixing various formats together to make their surfing experience richer. I believe this trend will only grow in the future.
If this happens then I believe that companies which offer a whole host of services such as social networking, Photo hosting and video sharing sites etc. and offer the ability to easily link together these different formats will have an advantage. I don’t think that stand-alone video sharing or photo sharing sites will disappear but they will be much more closely linked to each other. We might have a situation where users have unified identities or a single profile page for social networking, for video sharing and for picture hosting and blogs etc. Of course, users might also start building multiple identities each linking to a unique combination of blogs, photos and videos.

There could be any number of ways in which the future could evolve and we should not leave dismiss any possibility outright.

In such a situation, I believe that the ability to provide a complete host of such services will be vital for any company. This also holds true for promoting the video service. Today, when you search Google you find that YouTube videos are also listed among the search results. This is just one example of how Google is using its other properties to promote YouTube. In a similar manner any of its competitors such as Yahoo! video which want to challenge YouTube will need to develop an effective, integrated strategy to use its other properties to promote Yahoo! video and at the same time make it easier to embed these videos in various places. Thus, I strongly believe that we will see a situation where the success of Yahoo! video also depends upon the health of other properties such as its 360 degree blogs.

Thought N0. 7: Monetizing video sharing

A much discussed, written about topic that has drawn forth a variety of opinions. I read up a bit about this on the net and also tried to think what would work for me as a consumer. I have to say that out of everything that I have read, I like or agree most with this article. This is a very hairy issue so it’s best not to make any predictions on the way things will go. However, one thing that I am sure of is that I as a user will just avoid sites which show pre- and post-roll commercials as long as there are competitors who don’t force me to see ads. In it’s essence I believe the net is a very democratic space which gives the surfer a lot of power and a lot of options to do things their way. Any situation in which one feels forced or manipulated to do something goes against the whole tenor of the web experience. I believe that like me, most consumers will simply not accept this, unless the content being shown is not available at any other site or the showing of pre- and post roll commercials is a standard thing for all video sharing sites.


Monetization: A complex problem
In this context, I feel that it is better targeting of ads which will increase the number of clicks on video ads. Over time, I am sure ad agencies will become better and better at creating ads for the net, ads that are mildly curiosity inducing, related to your video search query and which do not scream out for attention.

11 comments:

Keshi said...

youTube isnt perfect but its the best video site at the moment :)
Keshi.

Rahul said...

This state of affairs won't last for long....this post was just meant to be a thinking excercise to see where Video Sharing could go from here and how other sites like Yahoo video catch up with YouTube....They are already changing quite a lot, and I am sure they will catch up sooner rather than later

Anil P said...

I would carve a niche and let things roll without bothering too much if it would ever catch up with YouTube.

The eyeballs really doesn't matter if there's a vision one cares about. It will draw its own audience over time rather than all and sundry for the all and sundry videos.

Quirky Quill said...

wow...and I thot my blog entries were long!! :) I'll get back here on a weekend...seems interesting-hope there aint too much gyaan.

Gammafunction said...

read your post and was very thought provoking.

I would like to point out that Google is in some ways moving towards combining all of its various features into one coherent entity like Gmail,Orkut,Blogger and also You-Tube now.already on Orkut there is a feature by which you can share your favourite videos and Orkut's scrapping facility allows you to discuss it with your peers.

Also Google seems to have realized the importance of what you call H-branding with all of Google's acquired entities retaining thier original names like Picasa,Orkut and Blogger whereas Yahoo radio was earlier called Launchcast I think.

Rahul said...

Anil: Thanks for ur comments. I agree on the niche strategy, but only for small players, not for companies like Google or Yahoo. These guys are going for the entire market, they want to be the no. 1 video sharing site and they have the resources to be able to do it.

For smaller companies and even individuals or two-man set-ups, going for the niche makes a lot of sense. One of the things I find exciting about the internet right now, is the extent to which it can empower smaller parties to get their message out and reach out to very niche, geographically dispersed audiences.

For instance, there might be very few people interested in tea making, and they might be spread in insignificant numbers all accross the world, but the Net makes it easier to reach out to them and to consolidate this audience at a cost that is economically feasible. Also, such a site should yield great returns for certain advertisers (say, tea companies) as they get served up a very specific segment with high interest levels for a particular topic/product. This is wonderful, for the sheer economics of it, a whole TV channel devoted to tea making may never work, but an internet site might.

However, while this presents opportunities to smaller parties, I don't think this si what Yahoo or Google would want to go after. Anyway, that's my 2 paisa, would love to hear more fro you o this.

Hi qq, thanks for visiting. I saw on ur profile that u are involved in Marketing, now Marketing/Branding and Technology happen to my two favorite areas and I would love to hear ur comments/opinions if and when u do read this stuff.

Hi Gammafunction, Thanks for stopping by. What can I say, u are right. I actually saw some of this stuff happening when I sat down to write this, but these basic ideas have been floating in my mind for a number of months.....should have started some of this stuff sooner

trashhead said...

Liked the dissection. But like Gammafunction said, google is in a state of consolidation of it's properties and it wont be long before we have the "Google Grid" which will be a one stop platform for all its services from e-mail to creating docs.
you will have to understand that youtube is an acquisition and google will by no means make drastic changes. Rather everything is made backward compatible first and then integrated at the top. The first realization they made with google search is that they have no community and that is the reason why they went on the huge drive to acquire communities via email, videos etc.
The goal is to seamlessly integrate all services under one common platform and terms like "social networking", "video/photo sharing" etc. will all be redundant coz everything you could ever want would be available at one place. Simple no?

as for ads, if the ad is good enough, it will be put up on youtube anyways, correct?

Rahul said...

Hey Trashhead, Thanks for the comment. I have to say that I agree with both the points you made. However, I don't think I'll agree with ur choice of music though :-)

trashhead said...

hahah dude..

I am open to all music man.. :).. have played a lot of genres of music (at least tried to) and I try to cover the interesting ones in Mumbai :D

Prakash said...

I am dead sure that you haven’t used www.LeadsByVideo.com for promoting your products. Otherwise you would not have been complaining.

Michael - The Fat Loss Authority said...

Wow... a very good brainstorm indeed.

All very valid points but I agree there is definite room for improvement primarily searching and active entertainment within the website.

Mike