YouTube continues to flood the zone with talk about how it is finally making money — for itself and for its partners. In the process, Google (GOOG) has exposed an opportunity for YouTube to make more money.
The latest is a blog post about how Sony made money off the recently popular “JK Wedding Entrance Dance,” which features a wedding party getting down to Chris Brown’s song “Forever,” and has been viewed nearly 13 million times.
Sony activated tools that enabled it to make money off of the video by selling text ads, and by activating referral links to Amazon and Apple’s iTunes store, which allows users to buy the song right after watching the video.
And it worked: Wired quoted YouTube executives as saying that click-through rates on the iTunes and Amazon links increased 250% this past week on top of the video’s popularity. (Poor Simon Cowell missed the boat with Susan Boyle’s viral video hit, but don’t feel too bad for him — he’s got plenty of cash already).
But shouldn’t YouTube’s execs also be taking notice? This idea of selling stuff that appears in videos — from songs to actual consumer products — could be a nice revenue source for YouTube. Why? For the precise reason that YouTube — unlike most other sites trying to make money from affiliate marketing — has huge scale.
Here’s some questions that YouTube executives should be asking:
How can we take advantage of our massive reach and quickly act on popular viral videos to make money from sources other than advertising? Instead of waiting for content owners to activate referral links YouTube should be more proactive with them when a video becomes a viral hit. After all, YouTube could receive anywhere from 4% to 9% of sales on consumer products. For example, a video featuring Megan Fox has been viewed over one million times the past week. As this video goes viral, viewers would likely be inclined to click through and buy Transformers DVDs and products.
Should we be building our own stores? This one is fairly straightforward. Why is YouTube taking 5% of music sales from iTunes and 10% from Amazon when they could cut deals with the music labels and take 30% of each sale (before operating expenses). In addition, they could be selling any number of other products, from movies to electronics.
How can we best sell virtual goods? Virtual goods tend to be most successful on gaming or social network/chat platforms. But with an industry that some estimate will surpass $17 billion in sales by 2015, YouTube may want to figure out a way they can take a sizable share of that market, too, given its massive reach.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.