the j. botter weblog

Bill over on TechCrunch asks the following question about TagWorld’s inclusion of video on the site.

What is the revenue model? And, moreover, what about google video?
Adding video to the social network is interesting, and fun, but how it’s going to be central to revenue generation is beyond me.

I’ll answer this as best as I can.

Video (and audio) works on social networking systems because users want to keep checking out what their friends are posting. Take MySpace, for example. I have friends who religiously change their profile audio and even add video via one of the many Flash-oriented “video codes” sites. It’s very much like blogging, in a sense, because these users are sharing what they’re currently enjoying with a network of friends and the rest of the world by default. Instead of putting current faves and tastes to paper like bloggers do, they put it via audio and video. It’s very viral in nature, because oftentimes those video codes and audio snippets will find their way onto the profiles of people in their network, and it continues to spread.

Personally, I don’t visit pages to see music videos. I usually have Greasemonkey strip that stuff out, anyway, so I won’t see it when the page loads. Ocasionally, however, I’ll see one that tickles my fancy, and I’ll end up doing a bit more research into it. I hate Toby Keith with a passion and I think he’s a bigot redneck (which might be the worst kind of bigot to actually be), but I did see the video for “As Good As I Once Was” on someone’s page, and I laughed a bit. Just a little.

So how does this translate into revenue for MySpace, or TagWorld, or anyone else who includes audio and video in social networking? Because they can put advertisements on the top of every page. It’s just like the rest of the web, where you’ve got advertisements on blogs and sites and whatnot, except you have a LOT more activity going on in a social networking site than you would on a normal blog.

Let’s say there’s three friends, okay? Two of them have videos on their page. They change out these videos all the time, sometimes three or four times a day. The friend who does NOT have a video on their page will still be checking out his social circle, and he’ll probably be interested in what the other guys will post next. This translates to a lot more pageviews on that profile, and therefore a lot more impressions on the ads that are placed at the top. 1GB of storage space is meaningless, even when dealt with on a scale of a million users, and the ad revenue that comes from those “repeat checkers” is going to blow any costs they might be dealing with out of the water. They can also add streams of revenue from folks who see videos on profile pages and then decide to buy a record from that band by sending them to the MySpace/TagWorld profile and having them purchase the record from there.

Make no mistake about it, there’s a lot of revenue to be had from allowing users to post videos. I would go one step further, even, by inserting a quick ad at the beginning or end of the video that users upload. There’s a monstrous ability to make money here, and they’re doing the right thing by allowing users to have a place where they can share video clips and audio, because it’s just another form of advertising.