Online video leader YouTube has opened up its version of a home shopping network in its latest effort to wring more revenue from its massive audience and justify the $1.76 billion that Google Inc. paid for the site two years ago. In the new service, unveiled Tuesday in the United States, there will be buttons under YouTube videos to offer viewers a chance to buy music, movies, TV shows, concert tickets and other products featured or mentioned in a particular clip.
When one of the links is clicked, the YouTube viewer is taken to another Web site like Amazon.com or iTunes that’s selling a desired song or other product. YouTube will receive a commission for each completed sale.
For starters, YouTube is selling songs only from two major labels, EMI Music and Universal Music Group, and video games made by Electronic Arts Inc. But it hopes to persuade studios to peddle movies and TV shows alongside video clips.
Eventuall y, YouTube wants to expand beyond entertainment sales to create a shopping bazaar. For instance, a home-care how-to clip on YouTube might include a sales button for a lawn mower.
“This is just the first step in this adventure,” said Shishir Mehrotra, YouTube’s director of product management.
YouTube plans to expand the sales channel outside the United States, but didn’t specify a timetable for the international expansion.
The “click-to-buy” links are part of YouTube’s intensifying focus on figuring out how to profit from its popularity without alienating an audience accustomed to watching clips without the commercial interruptions that fill television airwaves. YouTube also has had to navigate thorny copyright issues that have restricted its ability to show ads.
YouTube has only had moderate success with ads so far, mostly with short commercials that appear in a small frame underneath the main video. Its revenue this year is expected to hover around $ 200 million – an amount that has been somewhat disappointing to industry analysts, given that the site attracts nearly 100 million people each month in the United States alone.
Google has been patient with YouTube, telling its shareholders that it’s more important to nurture the video site’s audience than to fret about financial targets.
YouTube has succeeded on that front. In July, the site served up about 5 billion videos in the United States, according to the latest data from comScore Inc. That was 10 times more than the runner-up, News Corp.’s Fox Interactive Media, a group that includes the online hangout MySpace, which also has started to sell songs in a joint venture with major record labels.
Google hasn’t felt pressured to reap a quick return from YouTube because its main business of selling text-based ads alongside search results and other Web content is thriving, with revenue expected to surpass $20 billion this year.
Still, Google Chairman Eric Schmidt has been promising YouTube will become a huge moneymaker once it finds the right advertising formula. He has gone as far as to suggest the perfect commercial approach at YouTube is “the holy grail.”
Besides introducing a platform for e-commerce, YouTube also formally announced a new player, called “Theater View,” for watching full-length videos. The new player, which began appearing on YouTube last month, looks more like a small movie screen with stage curtains on the sides. It can even be dimmed to simulate a movie theater.
Apple and Google Face UK Investigation Into Mobile Browser Dominance
Apple and Google aren't giving consumers a genuine choice of mobile web browsers, a British watchdog said Friday in a report that recommends they face an investigation under new U.K. digital rules taking effect next year.
The Competition and Markets Authority took aim at Apple, saying the iPhone maker's tactics hold back innovation by stopping rivals from giving users new features like faster webpage loading. Apple does this by restricting progressive web apps, which don't need to be downloaded from an app store and aren't subject to app store commissions, the report said.
"This technology is not able to fully take off on iOS devices," the watchdog said in a provisional report on its investigation into mobile browsers that it opened after an initial study concluded that Apple and Google effectively have a chokehold on "mobile ecosystems."
The CMA's report also found that Apple and Google manipulate the choices given to mobile phone users to make their own browsers "the clearest or easiest option."
And it said that the a revenue-sharing deal between the two U.S. Big Tech companies "significantly reduces their financial incentives" to compete in mobile browsers on Apple's iOS operating system for iPhones.
Both companies said they will "engage constructively" with the CMA.
Apple said it disagreed with the findings and said it was concerned that the recommendations would undermine user privacy and security.
Google said the openness of its Android mobile operating system "has helped to expand choice, reduce prices and democratize access to smartphones and apps" and that it's "committed to open platforms that empower consumers."
It's the latest move by regulators on both sides of the Atlantic to crack down on the... Read More