Video goes viral (page 1 of 2)

So what are these videos? Uploaded by users, the variety is infinite: from music videos, travel, sports, comedy, film clips, cult TV titles, science experiments and cute animals to random people sitting in front of a webcam giving their opinion on random topics. Adult content is usually banned, to keep sites off web-nanny blacklists.

The brilliance of YouTube and its associates - Revver, MetaCafe, Yahoo Video and Google Video to name just a few - is that they allow people to embed their videos on other sites. A blogger, for example, can cut and paste a couple of lines of code and display their favourite music videos from YouTube on their blog. It greatly maximises the exposure for the videos and of course the video sharing sites. Popular videos go viral, with tens or hundreds of thousands of users viewing them, commenting on them, and re-linking to them.

Stunning figures

The figures are spectacular. YouTube currently has a 63% market share, with 12.5 million visitors a month watching more than seventy million videos a day. There are around forty million different videos on YouTube, with sixty thousand new videos uploaded every day. It has become one of the Top 50 most visited websites. USA Today described it as the "beginning of the age of personal media".

What inspired YouTube's founders was the difficulty of putting digital video on the web. With the explosion in camcorders and video-enabled digital cameras, people have millions of hours of footage but no easy to way to share it. It's too big to email. It's too difficult (and often too expensive) to put it on a personal website. Video sharing sites do all the work and bear all the cost.

The money model

But this bandwidth is expensive. It's estimated that bandwidth costs YouTube US$1 million per month. But the investment - YouTube has raised US$11 million in venture capital - is money more than well-spent. YouTube estimates that it could already earn US$10 million a month by putting ads at the start of every video. So far, it hasn't, because it doesn't want to alienate viewers. Instead it's looking for new and creative ways to get advertisers on board.

One of these is US TV network NBC, which has just signed a cross-promotional agreement with YouTube. This is despite a rockier early relationship, when NBC ordered YouTube to remove unlicensed copyright clips of Saturday Night Live.

But NBC realised that the illegal video had actually created unprecedented hype for SNL. So it's now agreed to run TV and online ads for YouTube, in return for YouTube running legal promotional clips of NBC's autumn line-up.

A niche opportunity

For advertisers, the beauty of video sharing sites is being able to target highly niche audiences. All videos are tagged with different keywords, from the general "music" "sport" "comedy" to specifics such as "Britney" "golf" "kittens". Nearly a third of YouTube's visitors are aged 18-24, a key youth market that is getting harder for marketers to reach.

YouTube's founders claim they don't want to replace TV or Hollywood, but act as a complementary service. But the boundaries are blurred. Videos on YouTube have a 10-minute length limit, but many users have split up entire TV programmes and feature films into numbered segments.