Web 2.0: Online Video Hosting/Sharing Websites
Video hosting websites are a great example of Web 2.0. They act as a platform and let users from around the globe upload, share, and comment on a wide variety of video content. In this post I'll examine 3 major players in the online video market: YouTube, Break.com, and DailyMotion.
Background
Video hosting websites allow their users to upload videos to a website. Once uploaded, the video can be viewed by anyone. The video is streamed from the website, so no files have to be downloaded to the viewers computer. Video hosting businesses generally do not charge users for their services, they instead rely on revenue generated from advertising to recoup the costs of hosting the video.
Bandwidth is the primary cost with video hosting websites. YouTube, the largest video hosting website, can serve up to 100 million videos a day and 20 million visitors per month. This requires significant bandwidth to ensure that videos load up quickly and consistently for users.
Video hosting websites also need to take steps to keep unlawful copyrighted material from being uploaded and viewed. Allowing users to upload and distribute copyrighted material could provoke a costly lawsuit from the copyright holder. Many of the more popular video hosting websites have tools to prevent copyrighted material from being available.
YouTube
YouTube is currently the largest and most popular video hosting website. Created in 2005, YouTube gradually grew and was purchased by Google in October of 2006 for $1.65 billion dollars. After being bought by Google, YouTube continued to be independently run, and currently has 67 employees.
YouTube requires users to create an account before uploading videos, but no registration is required to view videos. Once uploaded, users can “embed” the videos on another website such as their blog, or send their friends a hyperlink that points to the video on YouTube. Viewers of the video can rate it on a scale of 1 to 5 stars, and are free to leave their comments about the video. YouTube’s videos are displayed at a resolution of 320X240, which is lower quality than its competitors. The lower quality video keeps costs down, as higher quality videos require larger file sizes and increased bandwidth costs.
YouTube generates revenue by placing advertisements on the same page of the video that is being played. With 20 million visitors to the website each month, YouTube is an attractive place for companies to buy advertising space. Before they were bought by Google, YouTube reported that they were making around $15 million dollars from advertising a month. Bandwidth costs, although never officially declared by the company, were thought to be as high as $5 million dollars per month.
YouTube, like all video hosting websites, faces lawsuits if copyrighted material is illegally uploaded to its website. To combat the uploading of illegal material, YouTube places a 10 minute cap on all videos. This is not foolproof, as users can split copyrighted material into 10 minute chunks and upload each chunk individually. YouTube relies on its community of users to report inappropriate content. Having a self-policing user base has the advantage of being low cost, it would not be cost effective for YouTube to hire the number of employees required to moderate the millions of videos that are updated daily. However, self-policing users can be a disadvantage if they abuse the reporting system, or fail to correctly flag inappropriate content.
Break.com
Break.com was founded in 1998 and is targeted towards 18-35 year old males. The site mainly is meant for the sharing of humorous and “viral” videos. Categories of videos available on Break.com are animation, military, sports, humor, movies and entertainment. Break.com, like YouTube, relies on a community of users to generate video content. Users create an account to upload their videos, which are then available to be viewed by other Break.com users. According to Break.com, they receive 1.3 million unique visitors a day, and over 15 million videos are viewed daily.
Break.com differentiates itself from YouTube by paying the creator of a video if his or her video is placed on the site’s front page. Moderators who work for Break.com choose which videos are put on the front page. This provides incentive for Break.com users to upload quality content, which will in turn keep visitors coming back to Break.com.
Because Break.com has a more defined market than YouTube, it can attract advertisers who wish to reach males aged 18-35. Break.com uses advertising to generate income, and the website must be attractive to marketers.
DailyMotion
DailyMotion is a privately held company based out of Paris, France. It was founded in March of 2005 and currently has 32 employees. It received around 16 million pages views each day in 2006. According to their website, dailymotion.com was visited by 37 million unique visitors during July of 2007. This high number of visitors makes it an effective website for advertisers, which is important because DailyMotion relies on advertising to generate revenue.
DailyMotion’s video quality is slightly better than YouTube’s. DailyMotion uses a video resolution of 640X480 and allows its users to upload videos at a maximum of 20 minutes long and files sizes up to 150MB. This means that videos viewed on DailyMotion will be higher quality and can be twice as long as compared to videos on YouTube. This is significant because content creators will always prefer to have their videos hosted in the highest quality possible. However, DailyMotion must face increased bandwidth and storage costs in order to host these larger files.
DailyMotion does not allow any illegal or pornographic material on its website, and takes steps to remove copyrighted material. Videos on the website are categorized by Channels such as funny, music, travel, and many others. Users can rate videos, and the top rated videos are displayed on the front page of the website.