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Video site YouTube makes an e-commerce play
YouTube, which made its mark by allowing consumers to upload, share and comment on videos, announced today a partnership with Apple’s iTunes and Amazon.com to sell music, games and other products.
Managing Editor, International Research
Consumers who flock to YouTube to watch the most recent viral video being discussed at the water cooler may notice something new at the popular video site-goods available for purchase. The video and social network, which made its mark by allowing consumers to upload, share and comment on videos, announced today a partnership with Apple’s iTunes and Amazon.com to sell music, games and other products.
YouTube, which is owned by Google Inc., is offering links to the two retailers’ e-commerce sites through agreements with three content providers: gaming company Electronic Arts and record labels Universal Music and EMI Music. Songs and games are available for purchase through these companies’ video channels on the YouTube site. For example, the band Coldplay, an EMI band, has its own YouTube channel where fans can watch the group’s music videos. Consumers surfing this channel and viewing a music video may have the opportunity to link to the AmazonMP3 store or to iTunes to purchase the song.
A spokeswoman for YouTube says the sales from products purchased through its site are split between YouTube, the retailers and the companies that offer the video content, which YouTube calls its partners. She would not specify the percentage breakdown.
YouTube says it is looking to expand its e-commerce program to more of its partners-particularly media companies like TV networks or movie studios. In the case of a movie studio, the spokeswoman says a consumer watching a trailer may be able to click through to a retail site and purchase a DVD. YouTube also is open to adding other retailers, she says.
One of the main goals of the program is to generate additional revenue for its partners beyond the advertising its serves next to their videos, YouTube says.
"YouTube content partners now have the ability to promote and monetize their content in a new and exciting way and create a deeper distribution channel for their content online," says Chad Hurley, co-founder and CEO of YouTube. "Our goal is to improve the overall YouTube experience by connecting consumers with relevant information and entertaining content. The addition of retail links will enhance the viewing experience and allow people to engage more deeply with the content they want to consume."
YouTube also offers tools to help its partners spot amateur videos that use their content. For example, a user may upload a video of himself skateboarding with music from an EMI artist in the background. Once that video is identified, EMI could offer links to retailers who sell the music and get a cut of the revenue.
“We see a lot of user comments on the site asking ‘Hey, what’s that song playing in that video?’ With this, they could link through directly to buy it,” the spokeswoman says.
The e-commerce program is available only in the U.S. for now, but YouTube says it plans to expand it internationally in the next few months.
Amazon’s digital music store, Amazon MP3, offers more than 6 million songs. Apple’s iTunes store sells 8.5 million songs, more than 30,000 TV episodes, and over 2,500 films.
Last month, MySpace, another social networking web site, began offering music downloads from Amazon in an area of its site called MySpace Music. In addition to purchasing music, MySpace members also can stream tunes for free as they browse the advertising-supported shop.
Amazon.com is No. 1 in the Internet Retailer Top 500 Guide. Apple is No. 7.