Tuesday, October 9, 2007, 2:38 PM ET|Posted by Will RichmondGoogle/YouTube's formal announcement of its "Video Units" content syndication this morning is a welcome development following previous moves in this direction that did not seem to materialize (there was a test with MTV and also comments about doing same with partners Sony BMG and Warner Music Group). What Google'sAdSense has already done in distributing ads to the "Long Tail" of publishers, Google is now going to try replicating with video. It's a very smart move.
As I have written repeatedly, robust syndication is a crucial piece of the broadband video economy. That's because advertising is going to be the main business model for a long time to come. And the only way to make the ad business work is through massive traffic increases, and of course improved ad monetization methods.
There's no better way to scale up traffic than through turnkey syndication. Google's ability to harness AdSense as a combination video syndication engine and monetization platform for content providers (by eventually marrying video units to AdWords) is unmatchable by anyone else.
As Google expands this initiative, it will be simultaneously alluring and threatening to others. Trying to capture the same benefits without the same underlying technology infrastructure and far-reaching distribution network is going to be very challenging to replicate.
Take for example, Hulu, the News Corp/NBCU JV, meant to regain control over their broadcast TV programs. Hulu has been striking its own distribution deals and will no doubt monetize its traffic with a "feet-on-the-street" ad sales approach. While there are benefits to this approach to aggregate the biggest sites as partners, Google's one-stop syndication/monetization capability provides the turnkey, hands-off approach needed to gather up the all the rest of the market (i.e. the Long Tail).
Depending how Google chooses to split the revenues between AdSense partners and content providers, Google/YouTube could well become a dominant part of the broadband-centric video value chain that is now taking shape.