At our properties we have developed a YouTube channel where we host client ads that are interspersed with video. They are making a move in content this year and according to MediaPosts Video Insider there are 3 "Possible YouTube Outcomes" for 2012...
"Outcome 1: Disaster (10% chance)
Sure, its possible that despite Google's spending all of that money, viewers say meh and advertisers balk at the offerings even though the content looks more professional than the rest of the fare on the site.
While this is a possibility, I think that YouTube will leverage Googles marketing muscle and ensure that it sends enough viewers to the programming. Whether or not this makes a difference is the bigger question. As I have said, while content is king, without distribution its not worth as much.
Outcome 2: Home Run (20% chance)
Its also possible -- though unlikely -- that YouTubes initiative will be a smashing success: viewers flock to the programming in droves, and advertisers open up their wallets en masse.
Outcome 3: A Stepping Stone and Step in the Right Direction (70%)
As much as Id like to strike a controversial note and suggest that YouTubes content play will bomb or be the bomb in 2012, I think it will likely find that some aspects of the initiative were smart and necessary, while others rather unnecessary and a waste.
However, with anywhere from $500 million to $1 billion in revenues in 2011, YouTube will likely make $750 million to $1.5 billion in 2012 and as such, will be able to allocate enough campaigns against its programming initiative to say both internally and externally, look, this was a financial success.
And the fact of the matter is that with over $40 billion in cash just sitting on its balance, to take any amount of that and shift it to its income statement is just smart financial engineering.
YouTube will learn a lot of lessons along the way and likely realize that it needs to keep spending money, though it will have its hands tied on the programming end of things. After all, the networks have nearly a century's worth of experience -- and still cant deliver hits with precision.