YouTube is trying to find more ways to monetize the popular web service, and recently started a test project with selected partners who were invited to start offering video downloads to interested viewers (they subsequently killed our own download tool, presumably because they want to minimize the risk of losing money on unauthorized download apps). Now it seems the Google-owned online video community site is ready to expand the program to other interested partners based in the U.S. (see screenshot below).
As we noted earlier when we first caught wind of the download service, selected YouTube partners can offer their video downloads for free or for a fee (determined by the partner), paid through Google Checkout. Most videos in the test charge about $1 each. The partner can also decide how the downloadable video will be licensed to the user – whether it will be restricted to a private non-commercial use video, or whether it can be used under Creative Commons.
It’s not entirely clear if Google / YouTube is currently taking a cut on the for-fee downloads during the test period, but it will most likely do that at some point if it isn’t already.
Recently, Crédit Suisse analyst Spencer Wang estimated that the video site will lose approximately $470 million this year alone (although we should note that another analyst, Youssef Squali from Jefferies & Co., predicted YouTube revenues to amount up $500 million in 2009).
Either way, in this economy, YouTube needs to be monetized as much and as soon as possible, and the video download option is just another way the company hopes to generate income from the popular site. Other steps it has taken up until now include YouTubevertorials, selling search results, and ad revenues from big content partners.