by Todd Pheifer

Created on: October 06, 2008   Last Updated: October 28, 2008

YouTube is an immensely popular site in the current age of the Internet. The reason is that people enjoy video, particularly younger individuals. In addition, YouTube has made it simple for the individual to load his or her own video onto the site. Now, all the amateur videographers and anyone else wasting time on the weekends can broadcast their creative genius to the world. This is not to diminish the artistry of today's filmmakers, but the content of YouTube does runs the gamut in terms of quality. Viewers also enjoy YouTube because it includes various clips from television shows, movies, and music.

I can only assume that YouTube makes money through banner ads but I suspect they would like to make more through fees, subscriptions, and mass distribution. YouTube's popularity probably allows them to charge based on perception of revenue, which centers on the number of site hits. Of course, virtually nothing stays popular forever, and the leaders of YouTube have to know this. Still, business models for the Internet have to be implemented carefully. Because YouTube is essentially free for all of it's material, it might be difficult to implement a system where people have to pay to watch.

One strategy might be to target their site more to the Baby Boomers. Granted, YouTube is probably most popular with younger surfers, but unfortunately young people don't always have that much money. The Baby Boomers are all retiring. Many of them are going to be rich and bored. This represents an immense financial opportunity if YouTube can capitalize on this demographic. Therefore, partnerships with ISP's, cable networks, home shows, and AARP chapters could tap into a much broader market than the fickle youngsters of today.

Another strategy is to partner with television producers and moviemakers in order to make YouTube the exclusive distributor certain material. This may be a tough sell since television is still more profitable, but it may be a good medium for introducing shows that are questionable in terms of likely success. If a show solicits a following, it will draw more viewers and result in increased advertising revenue.

Overall, YouTube has to make sure they pay attention to their customers, the trends, and the changing technology. It is likely that video will remain popular, simply due to the fact that people enjoy watching themselves online. However, anyone can create a video site, which means that YouTube cannot assume they will always be the website of choice.

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