Britain Can't Get Enough of Online Videos -- and Advertisers Try to Cash In

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The British, perhaps including Queen Elizabeth II, pictured right watching a YouTube video when she visited the company's U.K. headquarters, watched 5.5 billion online videos in February, a 37% increase from a year ago, according to comScore (SCOR) stats released MondayThe U.K., which produced an Internet sensation a year ago with clips of previously unknown singer Susan Boyle, continues to devour the online video world. The Brits watched 5.5 billion online videos in February, a 37% increase from a year ago, according to comScore (SCOR) stats released Monday.

The country's population of 61 million also logs nearly 14 hours a month on average watching online videos.

The hugely popular market, at home and abroad, is creating a fertile field for advertisers looking to get in front of customers' eyes. The trick is figuring out how turn a profit without alienating the viewers who have come to expect everything online to be free.

Brits Go for Quality Content

On a per capita basis, folks on the other side of the pond watched about 90 online videos a month each, comparable to the U.S. What's noteworthy is that they spend more time watching the videos -- nearly four more hours a month -- and the overall numbers are growing much more quickly than in the U.S. Plus, the British have more of a penchant for watching videos that contain informative content, rather than simply entertainment, comScore found.

"The U.K. online video market continues to soar and is attracting a greater and greater share of Internet users' attention," says Mike Read, senior vice president and managing director of comScore Europe. "We've seen eyeballs move towards the online channels to watch more long-form, professional video content, such as popular broadcast network TV shows."

Google (GOOG) and its YouTube channel took in 40% of the U.K. market. The next most popular are British Broadcasting Corporation (BBC) sites, with 140 million video views. Other channels making the top 10 include news sitesby ITV and Sky.

Today's Insanely Popular Video

The Brits are back with one of the most insanely popular videos on YouTube, called "Charlie Bit My Finger." As of this week, the 56-second, uniquely British clip of two adorable brothers had more than 183 million views, second only to a Lady Gaga video with 190 million views.

Dan Rayburn, executive VP at StreamingMedia.com, said he's not surprised that more people are spending more time watching online videos. That's been the trend for the past 15 years. In the U.S., Hulu ranks second with views after Google's YouTube channel, followed by Microsoft and Yahoo sites. Others in the top include Turner Network, CBS Interactive (CBS) and AOL (AOL).

"People are using their computers, phones, laptops to consume more and more videos," Rayburn said. "There is no question about the increasing demand."

The bigger question, the multimillion-dollar question, is how advertisers are going to tap into the online video market for revenue. To date, only a handful of streaming video services are making money, but it's not even close to the potential, Rayburn said.

Some Video Sites Cashing In

"We have a greed problem right now," Rayburn said. "Studios and news sites want to charge too much money, and consumers aren't buying it."

One video site that's making money on online consumers is Major League Baseball's MLB.com, which has 500,000 subscribers. The site offers live, streaming baseball games that customers can't get anywhere else, and subscription rates are relatively inexpensive.

The free online video service Hulu is reportedly making a move to charge its customers for premium videos. Online movie service Netflix (NFLX) has seen its subscriber base grow to more than 12.3 million at the end of 2009 and offers streaming video at no extra charge to subscribers who rent DVDs through the mail.

Rayburn, who admittedly spends no time on YouTube, estimates that about 20% of video content on the Web worth paying for, and the rest isn't worth a penny.
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