YouTube Hints at In-Stream Ads

NEW YORK YouTube CEO Chad Hurley said the popular video-sharing service would begin sharing ad revenue with video creators, a step toward making the site more advertiser friendly.

Speaking at the World Economic Forum in Davos, Switzerland, via a clip uploaded to YouTube, Hurley said the service would look to compensate video creators, something rivals like Metacafe, and Revver have done to differentiate themselves. YouTube is also developing “audio-fingerprinting” technology that will identify pieces of copyrighted material used in videos to compensate rights holders, he added. YouTube had promised the technology would be available by the start of this year, but it has not finished it.

“We’re going to move in that direction,” Hurley said of paying users. “We didn’t want to build a system that was motivated by monetary reward. We want to build a true community around video.”

In a separate interview with the BBC, Hurley said the site is looking at showing video spots in front of user-created clips. In the past, YouTube executives have criticized pre-roll spots that dominate online video advertising as a poor user experience ill-suited for the short clips on the site. But rather than repurposed 15- or 30-second TV spots, Hurley suggested YouTube would use far shorter brand messages of just one to three seconds.

A YouTube representative declined to add to the comments attributed to Hurley.

Online video site Metacafe has put in place a “producer rewards” program since October, seeking to differentiate itself from YouTube as a repository for only the highest-quality user video. It pays users $5 per 1,000 views, with a 20,000 minimum, to users asserting rights to all the content in videos, along with signed releases from all participants. Producer-rewards videos are accompanied with in-stream advertising, either spots before or after the video or static banners.

Since its release, Metacafe has paid over $20,000 to three creators.

“The challenge is much greater for a company like YouTube,” said Allyson Campa, vp of marketing for Metacafe. “Nobody wants to advertise around my kids blowing out their b-day candles.”

YouTube has already taken initial steps to helping its most popular video creators benefit. In December, it brokered a deal with Coke for a handful of popular video bloggers to appear in a holiday campaign for the soft drink.