¶ … Tube needs to adopt a strategy that will position it for long-term growth and revenue generation. The strategy, therefore, needs to take a vision for the future into consideration. Internet video is only going to grow. As broadband Internet becomes more diffused, more consumers will want video. As people move their Internet usage to mobile platforms, YouTube will also need to be ready to deliver content to those devices as well. Consumers have not yet demonstrated a willingness to pay for this video, but eventually they will have to -- Big Content is not going to allow copyright infringement and sites like Hulu are already evidence that Big Content wants to exert control over Internet video. In order to survive long-term, a company will need to have the eyeballs (market share) to attract the content providers. If YouTube is large enough, the content providers will have to work with it to deliver content, as opposed to working around it.
As a result of this, Google risks having its YouTube property rendered irrelevant by Big Content, who can adopt a classic disintermediation strategy if it wants to. YouTube needs to be big enough and successful enough that content providers are compelled to adopt either a remediation or network-based mediation strategy (Andal-Aucoin, et al., 2003). YouTube at present is network-based, but the company needs to incorporate a model of the future that allow allows for remediation in some cases, certainly where there are copyrights involved.
One of the things that Google can expect in the future for YouTube is that there will be battles over the structure of the Internet industry in general. Traditional industries, such as the content providers, are uncomfortable operating in the online environment. They are going to respond in ways that seek to reshape the Internet to better fit their established business models. Some of the ways they are doing this -- such as the recently introduced Stop Online Piracy Act -- something that non-Internet companies support but that Internet companies like Google universally oppose (McCullagh, 2011).
For YouTube, then, there are two key strategies it needs to adopt. The first is a low-cost model that allows users to have access to the site. Strengthening the network-based mediation model is critical to gaining market share. Google should either kill its own video service to avoid cannibalization or build it around a different business model, such as remediation. The more market share YouTube has, the greater bargaining power it will have with the content providers that ultimately will drive this industry forward. If the site becomes dominant in terms of traffic, it gets a seat at the table when issues of content mediation arise. In addition, Google needs to ensure that the technology behind YouTube is able to move to mobile platforms seamlessly. Bringing its streaming capabilities in-house and away from LimeLight is a good starting point.
You’re 68% through this paper. Sign up to read the full paper.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.