YouTube Google and the Rise of Internet Video Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

INTRODUCTION

Situation Synopsis

This case is entirely based on the rise of internet video. In this case, Google, YouTube and its competitor’s strategy is focused. Moreover, key developments in the internet video history have also been highlighted in detail. The competitive landscape has been given special importance in this case because by time, the rise of internet video has gained a tremendous boom, which eventually results in increased competition. YouTube’s financial aspects have also been discussed in the case for better analysis.

Company’s Current Strategy
YouTube has always been a successful website for the users in terms of searching the desired videos as per needs and wants. It was in 2005 by the three PayPal employees, who found some serious difficulties while uploading video. In the very next year, YouTube was acquired by Google. After the announcement of the merger plans, YouTube as a part of their new strategy started removing the copyright material from the site. Furthermore, to increase revenues, YouTube came across content and ads sharing contract with CBS Corporation. To increase their market share, they contacted some famous music companies like Warner, Universal and Sony to officially get the license and distribution rights of music for their website. Additionally, they were also working on the policy of sharing their revenues with users, who submitted their video clip to them. After the acquisition, users could freely upload and share videos on Google video. However in August 2007, Google decided to close its video store service and copyright paid customers were not able to see their paid contents anymore.

Problem Statement
Initially, Google video has been facing issues regarding their approach of not providing the actual video that restricts them to grab the handsome amount of market share as compared to YouTube. After the acquisition, they still found issues of illegal video sharing and uploading. Mainly the case focused on YouTube’s approach in comparison with Google in initial times. This case also reviews intense competition in UCG market.

ANALYSIS
EXTERNAL ANALYSIS

Industry Structure & Trends
After the massive acquisition, of the YouTube by the Google, the industry has witnessed new birth video website in an optimistic manner. Industry trends can be better highlighted in the light of IDC survey, which spotted that 33% of the respondents were found watching internet video. Out of these 33%, 17% stated that they watch internet videos on daily basis and 42% said that they watch them on weekly basis. There was a trend of not purchasing the internet video on regular basis as per the study. Additionally, some respondents showed hardly any interest in video purchasing as well. User generated content has the special importance in this industry, which makes the professional video content makers worried about their role. Industry experts projected that by the year 2010, revenues related to video on demand would reach around $12 billion; out of which internet video would account for one third ratio. This video website experienced tremendous growth in the year 2006, in which less than 10% was represented by VOD revenues. The global population is now moving in a faster manner towards the usage of internet, which helps the industry to grow with a rapid pace.

Key Success Factors
There are many key success factors present in the industry. Some key success factors include rapid increase in the video streamers and incremental effective growth of online advertising. Additionally, the revenue per ad (CPM) also plays a vital role in gaining the success. From the user perspective, user friendly services can be the best key success factor for any company or such websites like YouTube, MySpace and etc. Moreover, the enhanced user experience engages the audience and increase the traffic on that website, which results in success for the company. This key success factor plays a vital role in any firm’s success, so they must be a key point to focus on for long term success.

COMPETITIVE SITUATION ANALYSIS

Competitive Forces
Competitive Approach & Strengths of Key Competitors
There are numerous competitors present in the industry, which try their level best to give aggressive competition to one another. YouTube has a massive market share among all the competitors. These competitors include: AOL MSN, Yahoo, MySpace, Metacafe, Joost, Hulu, Blip.tv and etc.

Some of the competitors have been found quiet aggressive in giving tough time in this industry to their competitors. They have been found working on different approaches to get the maximum traffic on their websites, which will result in their success for sure. Some key competitors have been discussed below.

Aol
Their strategy was quiet simple of targeting a bulk amount through the famous shows. Moreover, their uncut video offering ads value their vision. They also possess the interactive programming guide for their users and also offer them forty five content channels. A great deal of content was also present on the website, which engaged and grabbed more audience on the website......................

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Although Google had a stellar performance in web search, many of its other services, such as Google Video, were less successful. This case describes how the YouTube video came to dominate the market for user-generated content (UGC), while Google Video have tried various strategies to market, and ultimately failed, completing the acquisition of YouTube. It also discusses the various competitors UGC market chronicle entry of existing and new players in the field professionally generated content (PGC), as well as the main challenges associated with the monetization of YouTube acquisition for Google. "Hide
by Karel Cool, Matt Seitz, Jason Mestrits, Sona Bajaria, Uday Yadati Source: Kellogg School of management, Northwestern Univ. 25 pages. Publication Date: May 20, 2009. Prod. #: KEL403-PDF-ENG