Sunday, 1 March 2015

Maybe we’re not all web 3.0 after all.

Trying to separate our online identity from our real-life selves may well be futile.

Welcome back to the blog, from my winter break. I returned to writing this week, and saw an article in the Wall Street Journal claiming that YouTube didn’t make a profit last year, despite having more than a billion viewers per month. I find it instructive to compare this with traditional networks: one billion views is the same order of magnitude as all US viewings across all networks in any one month. Imagine if ABC and CBS and FOX and NBC and HBO and CW and and and weren’t making any money at all – that’s the scale of Google’s profligacy.

Of course, there’s bound to be some aspect of funny money accounting here – YouTube presumably pays the Google mothership a big chunk for infrastructure hosting and CDN, more than the actual cost. However, even if we take this at face value, there’s an interesting conclusion we can make.

WSJ reports that the lack of ability to convert views to revenue is in part due to searches that find YouTube content is from other sites and so YouTube doesn’t earn ad revenue (but presumably the key site driving traffic is Google search?). More interestingly is WSJ’s assertion that YouTube’s audience reach is quite limited; it quotes that 9% of viewers account for 85% of views. Or looking at the flip side of that statistic, most viewers aren’t regular viewers.

Much of this blog has been about the changing TV viewing habits, going from traditional terrestrial networks to online streaming. But these numbers from YouTube tell me that the story isn’t actually that simple; it seems that we’re moving from a single predominant content delivery methods to enjoying a bouquet of delivery methods. We’re not changing wholesale from a traditional viewing personality to a web 3.0 digital identity. Instead we’re augmenting our identity with web 1.0, 2.0, 3.0 whatever makes sense with that particular use case contextualised to our own lives. What’s more, we’re not jettisoning the traditional when we add the digital. Our digital identity is becoming more complex because it’s not distinct from our real-life identity. To treat them separately is futile, and the most successful digital offerings will be able to reconcile the two.

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