Google’s (GOOG) YouTube is once again attempting to work with local news broadcasters with its “News Near You” service, in which viewers are served up news videos relevant to their area — according to their IP addresses.
YouTube claims it could eventually act as a nice incremental revenue stream and, at the least, be an effective form of promotion. However, as often happens in the online world, the economics and ability to meet consumer demand will largely benefit niche services.
Here is why:
Bloggers and aggregrators will still beat the traditional news outlets (whether video or print) to the punch. There will not be much of a need for breaking news videos online since the news will more than likely already be disseminated throughout the Internet by dozens of bloggers and aggregators who aren’t constrained by 1) traditional reporting standards/editing and 2) time needed to produce the video segments. Thus, while some may view the videos after the fact out of interest, it is unlikely these videos will receive much of an audience and news outlets will probably end up mostly uploading some op-ed pieces.
The potential profit isn’t enough to cause broadcasters to dive in wholeheartedly. Sure, a couple guys doing an op-ed piece in a basement for a total cost of maybe $50 might get excited by the advertising split if their video was viewed a couple hundred thousand times. (Which is still unlikely anyway for the overwhelming majority, in our opinion.) But traditional broadcasters will need to earn at least thousands of dollars from each of these clips to make it economically compelling, which we find unlikely given the chances of reaching a large audience.
All things being equal smaller, independent broadcasters will likely play the online game better. Smaller, independent companies tend to be more entrepreneurial than larger ones and, just like bloggers and online publications, independent video producers usually play the internet marketing game better than major ones. Those seeking profit — like vidSF, which was featured in a New York Times article on the subject — will likely cater their programming to those topics most searched for, while local news outlets will upload clips from that day’s news — without regard for what users are searching for. In addition, independent broadcasters likely have more time to promote their clips online.
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