YouTube has been a powerhouse in the online video arena since well before search giant Google (GOOG) bought it for $1.65 billion in 2006. What’s still a question is how much the video-sharing site will add to Google profits. One thing is certain: YouTube dominates the sector, accounting for nearly four out of 10 online video viewing sessions in the U.S. in May.
Google also dominates market share among people who come online to watch video. Comscore reports that “Google Sites, driven primarily by video viewing at YouTube.com, ranked as the top online video content property in May with 147.2 million unique viewers.” The research firm say that in May total unique viewers of video in the U.S. were 176.3 million.
Total viewing sessions across Google’s sites reached 2.1 billion. (Viewing sessions are defined by unique visitors multiplied by the the number of times those visitors come to the site to watch a video.) The total viewing time per unique visitor to Google sites was an extraordinary 311 minutes in May. No other site comes close. The No. 2 spot is held by premium-content site Hulu, which held its viewers’ attention for a fairly impressive 218 minutes. But Hulu only had 28.5 million unique viewers in May. Hulu visitors also tend to watch long-form content provided by media companies. YouTube is still dominated by shorter, user-created videos.
The sites directly behind Google in traffic in May were VEVO, a premium video site, Yahoo! (YHOO), and Facebook.
The data on YouTube suggests that, if the site can get more premium content, it could rule the business of distribution of the products of major media companies on the Web. Early in YouTube’s history, content companies were concerned that their video was being pirated by the site. Viacom (VIA) even filed a $1 billion copyright suit against YouTube in 2007.
But the online world has come a long way since then, and YouTube has begun a campaign to create partnerships with major media companies to bring premium content to the site, in some cases including rental and pay-per-view video. The first set of deals, with companies including Sony Pictures (SNE), Warner Brothers (TWX), Universal and Lionsgate (LGF), was announced last month. YouTube has also become an important destination for music videos, which labels use to promote album sales.
Google has claimed YouTube will be profitable, but that remains to be seen. The bandwidth and storage costs for its video content are huge, perhaps in the tens of billions of dollars.
The big hurdle YouTube must leap on its path to becoming a major provider of premium video is its current content. It’s still viewed by many as a video-sharing site dominated by amateur content, and with good reason. The most popular video on YouTube this month is a 61-second clip called “Cat mom hugs baby kitten” with 27.8 million views. Some Hollywood studios don’t want their movies mixed in with that.