I’m apparently a bit behind the curve on this one. I was just messing around on YouTube (it’s 1AM, what else should I be doing?) when I noticed the sidebar offered the ability to rent Reservoir Dogs. I was pretty shocked, as I’d never before considered paying for something on YouTube and didn’t realize they were experimenting with different revenue streams. So, I did what anyone in my generation would do: I Googled it. (Side note: Firefox does not recognize Google as a verb…I feel like that should change).
Well, it turns out that this little experiment started a couple years ago (apparently quite quietly). Google opened a store at www.YouTube.com/store that is accessible only in the United States. YouTube offers users the opportunity to rent movies for 24 hours for a fee of anywhere from $1.99 to $4.99 (at least that’s what I saw in the few minutes I spent on the site). So, while this was news to me, it wasn’t exactly shocking. It’s been clear for a long time that if Google hoped to make any money off it’s YouTube deal it would need to find new ways to monetize content and new streams of revenue. This appears to be experiment aimed at doing just that.
So, what do I think: First off, the site navigation is TERRIBLE. In fact, the entire customer experience (at least up to the point of sale, where I stopped) is aweful. Navigation is just too complicated. Filtering sucks, the search feature is not good (this is a Google company, remember), there’s no customer reviews, no suggestion/recommendation engine, no favorites, there’s preview available. It just strikes me as what an online movie rental site would look like it was launched in 1999. From same people that brought you Gmail and, more importantly, the original YouTube, this is hugely disappointing.
I’m wondering if part of the problem is the way we shop for movies vs the way we (and by “we” I mean “I”) use YouTube. For me, most of the fun of YouTube is the serendipitous discovery made possible by clicking through link after link of the suggestions panel. Beyond the video that caused me to go to YouTube in the first place, I never have an expectation to what I might find. This is completely different from the way I search for a movie to watch. While I might not know the exact movie, or even the movie type, I don’t want to allow serendipity to play as large a role. When I’m committing a couple hours and a couple bucks, the decision process is much different that when I’m investing no money and only a few minutes. In other words, I’m more risk averse and thus in need of better guidance from the tools employed to help me out. So that’s a big reason why I think the interface/customer experience feels so wrong for the YouTube store.
I also think it’s a tough market for YouTube to break into. Between Netflix, Redbox, your local video store, set-top boxes, Hulu etc I have a hard time seeing a niche for a YouTube store. (I’ll admit that Google TV could be a game changer, but I’m not familiar enough with it to comment, so I’m going to pretend it doesn’t exist…) When I want to rent a movie I go to Netflix and watch one. Or, if I’m not a Netflix subscriber (or they don’t stream the movie I want) I open up iTunes and rent it there. Given that my top of mind impression of YouTube (from years of experience) is grainy, shaky, homemade videos of people doing ridiculous things, I just don’t see myself ever using the service. (not to mention the buffering of flash videos compared to silverlight). I can’t imagine a time when I’d skip Netflix and iTunes (and Hulu and Comcast on Demand) for the YouTube store. Also, I’ve heard (can’t confirm or find a reputable enough source to quote) that the average age of YouTube users in under 16. These are people that have grown up on free video, torrent sites, etc. Add to the fact that they don’t have credit cards and seems like a tough sell. Seems unlikely that they will suddenly decide to pay for content. Lastly, the online video on demand market is still comparably small.
Now, the other side of the coin: GoogleTv is coming. Getting videos off the computer screen and onto the TV could make a huge difference (something Netflix noted when it rolled out streaming to your TV). I think with a major site redesign, lots of help from Google TV, the ability to stream onto an iPad (maybe wit 3/4G), YouTube could turn this into a winner. With YouTube revenue estimates ranging between $450Million and $1Billion this year, the company can afford to support the store until it catches on.
While I’m two years late to notice, I will be watching to see how this plays out. Until then, I’m keeping my Netflix subscription.
Good Talk,
Tom
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