Google: How One Wedding Video Shows YouTube's Potential

It appears that Google Inc.’s (GOOG) biggest loss-leader is turning profitable – and it is one wedding video that perhaps best shows YouTube’s potential.

In less than a month since being posted on July 19, 2009, the user-generated video had nearly 20 million views, or about 830,000 per day. In less than a week it had more than 10 million hits. And the “JK Wedding Entrance Dance” video continues to show strong viral growth. It is also likely generating revenue and profits for Google given related advertising and music purchase links, according to Citigroup analyst Mark Mahaney.

Even he admits to watching the video – set to Chris Brown’s “Forever” – at least a dozen times, and said “St. Paul. MN, has got style!”

While that may be up for debate, the video that shows how Jill Peterson and Kevin Heinz took a traditional walk down the aisle and turned it into something different and fun, indeed generates revenue for Google. In addition to the $500,000 per day front page YouTube video ads, there are also ads that YouTube positions to the right of the video – things like wedding songs. Then there are the overlay Music Purchase links, which allow viewers to instantly purchase the R&B artist’s song via iTunes or Amazon.com (AMZN). Google gets a small referral fee.

This traffic is also very engaged, according to the YouTube Biz Blog. It said the click-through rate on the “JK Wedding” video is 2x the average of other Click-to-Buy overlays on the site. The official “Forever” music video, saw its Click-to-Buy CTR increase by 2.5x in the week leading up to July 30. The single shot up to #4 in iTunes and #3 on Amazon’s Best Selling MP3 list, while Nielsen Soundscan reported that in the week ending July 26, the song was downloaded about 50,000 times, up more than 1,700% versus the previous week.

Mr. Mahaney said in a research report:

What we also see here is an example of YouTube/Google’s ability to work with a large publisher to monetize user generated content. Sony could have demanded that the video be pulled. Instead, it worked with YouTube to allow Jill & Kevin to share their unique wedding entrance while breathing life back into Chris Brown’s song.

So YouTube can generate revenue, but can it generate profits?

Based on discussions with industry contacts, the Citigroup analyst believes YouTube may have already been very close to break-even in the second quarter. He thinks YouTube can be nicely profitable in the not-too-distant future as it becomes more aggressive in monetizing user generated content, partner content and long-form professional content, and keeps costs down through peering arrangements, dark fiber utilization, and data center optimization.

Comments

[Moto:]

I watched one minute of this mindless bs, turned it off, and had a bunch of anti virus crap blowing up my computer. Great business model.

Aug 17 10:21 AM

[Tom B:]

It wasn't that good....better than a lot of stuff you see on TV, I suppose, but pretty vulgar.

Aug 17 10:32 AM

[User 311865:]

I also got hit with this anti-virus crap. It wasn't from youtube however. It came from seekingalpha. Great business model indeed - they can't police their' own site.


On Aug 17 10:21 AM Moto wrote:

> I watched one minute of this mindless bs, turned it off, and had
> a bunch of anti virus crap blowing up my computer. Great business
> model.

Aug 17 10:54 AM

[Jon T:]

Stop whining.

Get a Mac.

Problem solved.




On Aug 17 10:21 AM Moto wrote:

> I watched one minute of this mindless bs, turned it off, and had
> a bunch of anti virus crap blowing up my computer. Great business
> model.

Aug 17 11:01 AM

[Jade Queen:]

I got junk on my computer also. I had to get my son to get it off. But I'm not going to rain on the parade of this. I found it very interesting. Nobody was likely to faint dead away at this wedding, and I found it refreshing. These young people weren't worried about tripping. So few marriages last, they might as well have fun on the day itself. If they agreed to do it this way, at least they both like music and dance. Maybe that will keep it together.

I also like that Sony understood the buzz value and did not demand that it be pulled, but rather understood the potential.

My hope is that this will allow local artists and indy labels to get their stuff out there too.

One of my friends noted that wedding paraphernalia is somewhat recession-resistant. People still get married and die.

Could we have a Bollywood one next? Frankly, I considering instructing my kids that I want a memorial service like that than the usual long-face affair.

Aug 17 11:21 AM

[ISBN-10:]

Well, I think youtube is poised to be great profit machine going further, definitely for long term! Video has picked up lot in general over the internet.
One more thing is iphone and gPhone (all new smart phones) have also contributed lot to help Youtube.

-----
htttp://isbn-10.com

Aug 17 01:14 PM

[dick black:]

I wonder how much of that cash generation goes to the poster of the video or do you need to create a channel and sign up for profit sharing.

Aug 17 01:37 PM

[Archman Inv...:]

It was all in good fun I guess.
It's nice to see that during hard times in the mid-northern state of MN things are not so bad.

Then again the men in the video are probably all Policemen, Firemen, or union workers, and the women are probably all teachers.
All living off the taxpayers. Recession for these people?
Nah.
Life is good so might as well celebrate.

compdivplan.com

Aug 17 01:48 PM

[FiaPoko:]

None of it goes to the poster of the video unless they are in the YouTube Partner Program.


On Aug 17 01:37 PM dick black wrote:

> I wonder how much of that cash generation goes to the poster of the
> video or do you need to create a channel and sign up for profit sharing.

Aug 17 04:13 PM

[User 235461:]

Can only agree with Jon T, get mac and stop whining. Btw I also loved the video as most of my friends. So good that this is more subjective than objectice!


On Aug 17 10:21 AM Moto wrote:

> I watched one minute of this mindless bs, turned it off, and had
> a bunch of anti virus crap blowing up my computer. Great business
> model.

Aug 17 05:24 PM

[dcortex:]

New York Responds

www.youtube.com/watch?...

Aug 17 06:54 PM

[Joseph Sherman:]

The JK Wedding Entrance Dance video shows how a remarkable message can spread. Where there is an audience, there are revenues. You Tube will become profitable as it meets people's desire to spread and communicate in a community with the market potential for ads and selling products (music).

Aug 17 07:33 PM

[Stephen Fra...:]

lmao

Aug 17 08:28 PM

[mani.chawla...:]

I am not fully convinced about the writer's thesis. Based on the argument, the more attention catching (or use your own adjective here) the content, the more Youtube is going to be popular....so let's try to replicate this from a B2B standpoint -- what a PR nightmare. There are only so many good viral videos (the Budweiser swearing video comes to mind) that I have seen. Anyone seen any more viral videos from AB since then? Not me.

Making content to tastefully standout - universally is extremely hard...but certainly somewhat easier if you micro target the audience.

I think Youtube has something unique going for it...but I am not sure it is fully developed. Where is the ecosystem of complementary products? Where are its competitors? I think FB, TT, YT are all deep pocket experiments looking for a profit model. As long as the profitability picture is not certain, the number of competitive plays is going to be limited.

Aug 17 11:22 PM

[upgrayed:]

God please give me back that 3 minutes of my life.

Aug 18 08:33 AM

[Maxe Paul:]

I thought the whole thing was let down by the bride who couldn't dance for shit.

What an anti climax that was.

I expect better on the second and third marriages in two or three years time!

Aug 18 10:31 AM

[rockermom:]

On Aug 17 05:55 PM Missing_Link wrote:

> What an absolutely tasteless video. It's all right to have fun,
> but lousy music and stupid dancing at your WEDDING? For fuck's sake, save it for the reception.

In a commenting decrying the video as tasteless, was the use of gratuitous profanity supposed to be ironic?

Aug 18 02:31 PM

[Econ 101:]

Why not have fun on the day you get married and provide a Las Vegas style show for the people bringing you gifts??? The way marriage works today it is probably all down hill from here.

Aug 18 06:40 PM

[Jonathan Swift:]

I cannot believe how repressed are those who found this delightful wedding entrance video as objectionable and especially those who found fault with these friends talents as dancers! Lighten up! This was a major departure from the usually joyless church ceremony. It is a celebration of the occasion of marriage instead of a solemn and utterly predictable "Here comes the bride."

Aug 24 03:07 AM