Video Distribution Infrastructure Challenges
Summary
The Business Insider published an article last week, stating that YouTube is Doomed. While a large part of the title seem's to be for shock value, it goes on to analyze the financial and engineering challenges that YouTube, and it's parent company Google, face in light of it's large video distribution network.
Written by Benjamin Wayne, the article delves into the large costs associated with the encoding and distribution process that is required for the most popular video network on the web. Painting a bleak future for the parent company Google, and it's estimated half a billion dollar losses that YouTube must sustain, Wayne does a superior job of describing specific problems with their business model, as well as introduction possible avenues for monetization.
The piece begins with an o utline of YouTube and Google's general financial situation, and the estimated $470 million dollar loss project for YouTube in 2009. The light becomes dimmer as YouTube's estimated growth is brought into the picture. This growth further increases their estimated losses, and highlights the big loss that Google may have to sustain indefinitely, in order to keep YouTube running.
Wayne goes on to describe some possible solutions for their business model, including focusing more on premier content, like it's competitor Hulu, or offering up a subscription model to it's users. He proposes, however, that Google cannot indefinitely swallow the half a billion dollar annual loss to keep the service alive.
Analysis
While YouTube's future may seem glib from a financial perspective, this piece does bring up a very relevant topic for small to medium sized businesses; what are the challenges to online video distribution. While there are countless services that offer unlimited video storage and transfer, they all bind the video content to the service, which in most cases hands over copyright's to the chosen company. For a company that focuses on user generated video, as well as professionally produced creative content, this can be enough of a hurdle to look for a private solution.
More so, however, are the hurdles that come with using an existing web service. It gives you the capability to upload and distribute 1,2 or a series of videos, however it does not give the option to grow a community, surrounded by your brand image, and have your community supply video content to your specific organization.
For this, and other kinds of needs, it is imperative to have a customizable video distribution platform. Whether you're utilizing an API, partnering with a Social Media Applications corporation, or developing it from the ground up, this kind of flexibility is dire to your successful execution of an organic, growing community.
While using an API, and developing from the ground up both require an extensive internal web development team, they bring with it the ability to store videos, own them, and use them for internal purposes. The time it takes for a ground up solution may range between 4-8 months, however with proper distribution through 3rd party web services like Amazon and Sun, you can ensure organic community growth without depending on a web service to supply your video.
YouTube's inability to manage it's growth forecast financially speaks to it's unintended marketing campaign. YouTube wants to catalog, store, and stream every video it can, regardless of niche, industry, or category. This is there challenge. Small to medium sized businesses can avoid this problem through one of the three options mentioned above, since there are in fact targeting a specific community, with specific needs.
Result
Wayne's article on YouTube's dramatic future allowed us to present the topic of video distribution, and the infrastructure challenges that come with it. While YouTube and Google's challenges are grand, they can be avoided for small to medium sized businesses due to the kind of community that is required to grow, and ideally through a partnership with an existing Social Media Application Platform or Video Encoding Service, such as Fliqz.
Video distribution will become a commodity over the next few years, however unlike most commodities, encoding and streaming will remain costly. Many companies will maintain branded, niche communities with video offerings, however they will rely on third party video networks, effectively limiting large areas for branding and growth.
It is important that before a business decides on it's course of action in the execution of a branded social community, they discuss the long term expectations of video distribution and branding, and how they want their community to be involved.
