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December 11, 2006

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Qwerty

Well, why wouldn't I go onto a Big Media video site? They'll have lots of content available for a modest price, which I can then download and watch on... ????. Wait a minute, on what device will it play -- iPods? No. Zune? No. Maybe Big Media will come out with their own sucky portable media player (the "BM").

I suppose they mean to play it on WMP11, then, because for paid content people will want a download, and not subscription-based HTML video streaming. So who'll buy content when it's stuck in WMP11? They're caught in the nether world between YouTube and Tivo. What a sucky idea. Right on again, Henry.

Victor

Spot-on Henry. The likelihood of big-media creating technology that will outmatch YouTube is beyond laughable. It's all about trying to squeeze a better price out of Google. Unfortunately for them, cartels are often unstable and they'll break one-by-one when they realize the benefit they're getting by working with YouTube. To wit, the remarkable surge in popularity of CBS shows that have put their clips in You Tube.

Victor

http://www.nytimes.com/2006/12/11/technology/11youtube.html?_r=1&ref=business&oref=slogin

sufiy

Will or will not Big guys create competitor to YouTube will be dictated not by their ability to do so but by potential of the video market and their fight with mortal enemy to their copyrights: Google, which is violating any possible IP rights. Google is not more than very good index of Library, you can easely find any book, but you are coming for a book, and those who write them will prevail. Technical picture is predicting deteriorating fundamentals: monetising of YouTube will take much longer time and its "juicy business" at the first glance will turn out to be Capital Flash System which will become one more constrain on slowing growth of revenue and Free Cash Flow.
http://sufiy.blogspot.com/2006/12/google-weekly-second-top-in-reversal.html

http://sufiy.blogspot.com/2006/12/google-to-be-afraid-or-not-to-be.html

Johnie

The problem with Big Media's YouTube "killer" is that the key growth for YouTube was the fact that you could embed YouTube clips on other sites. I don't see Big Media willing to let people do that.

PardonMyFrench

Henry,

Great post. Why not have the Big Media companies strike a content deal with say Yahoo to host their videos? The Big Media companies can take advantage of the already built in traffic and Yahoo could sure use some content juice.

Eric

davis freeberg

I've got to say when I first read this, I thought that the media companies were either smoking the good stuff again or were simply just that arrogant, but this explanation makes so much sense it's almost brillant. You leak a couple rumors and boom, Google pays you off to forget about. Frankly I'd almost like to see big media fail at this endevour, except it'd be nice to see an end to the hostilities, so that we can see the digital revolution move forward.

Bud B

The arrogance here is incredible as you scoff at networks. Bottom line is people still want to watch professionally produced tv shows and movies. The people who produce and distribute these shows will make money. kids farting on you tube for a 25 second clip doesn't count

walt

good post, bud.
Trouble with youtube is I can't find what I'm looking for. Try finding a sports clip from last Sunday's football game. Try finding Kenny Rogers 2005 baseball tirade.
P.S., big media. I won't pay to see a 10 second clip - but advertisers will!

Neal S. Lachman

Henry,

With all due respect, when I read your comment "Big Media is clueless about the Internet" it struck me that things may be just the opposite. Maybe YOU and most ICT/TMT analysts don't have a clue about old media. It seems like you underestimate the power of old media.

You should be aware that Big Media has had USER-GENERATED content since decades, America's Funniest Homevideos to name just one. While living in Vancouver I used to watch with joy City-TV's minutes of user comments. These people would PAY (a looney or tooney, I don't remember) to have their comments recorded, and then they hoped it would air.

These shows were immense popular, and are in fact the predeccesors of online user-generated content. You should never under-estimate the guys who eat, breathe, drink, and shit content. Big Media didn't get big just because they brought us worthless stuff. It's easy for some commentor/reporter to start comparing apples and eggs, but it is even easier for them to draw wrong conclusions. Most likely because of short-sightedness and lack of real world knowledge/experience.

If Big Media decides to set-up a YouTube competitor (let's call it speculation for now), there will be lots of power and money behind such an effort. And contrary to what you suggest/think, Quincy maybe doesn't oppose such an effort at all.

Business is all about taking risks, but with the steps hopefully in the right direction. When Big Media execs see value in a YouTube competitor, it is their fullest right to act on it. If investors can't expect BM execs to act as the market ripples and works, what else can/may they expect from people who are paid to "try and do"?

As the showmaster said: "Let the competition begin."

TallTroll

>> If Big Media decides to set-up a YouTube competitor
... it'll be a disaster. Sorry, but power and money don't automatically translate to success on the WWW. If it did, MSN wouldn't be a trailing 3rd place, and Yahoo wouldn't be flailing frantically to keep itself afloat.

Bear in mind that although Google are a big company today, they took the bulk of their current market share when they were (relatively) tiny.

Now, don't get me wrong, I don't think the UGC sites are going to utterly displace Big Media - people do still want to watch quality, professionally produced content. But, that's no longer their ONLY choice

Also, I don't know what the feeling is in the US, but in the UK many of the content producers have lost their way creatively. Very little of the original programming coming out here is getting a decent audience, because the content producers have stopped taking risks. You just know that many of the hits of the past just wouldn't get made by todays commissioning editors because they are "too risky"

>> Business is all about taking risks

Could have fooled me. Taking a related example, how many of 2006 "big" films were genuinely risky? Sequels and ports from other genres (notably comics) were the order of the day - the handful of original scripts that succeeded were all huge surprises, at least to the studio execs

Neal S. Lachman

TT:

Old/Big media is wary of digital downloads. Monetizing their archives is not BM's biggest problem/headache, Digital Right Management is. If studio/network execs would only care about one-time payments, they would have made their archives available for on-demand programming. This would put the users in charge of professional and great content, the kind that we love to watch and enjoy.

But the topic here is UGC, and whether BM could make a dent in YouTube's businessmodel (what model, by the way?), let alone them being able to beat YouTube if they'd decide to create a competitor. However, the threat for YouTube is quality. Quantity is only good for a while. If users can't tell the woods for the trees then there is a huge turn-off for those who the uploaders do it for. YouTube has become a kiddy playground and it remains to be seen how valuable the remaining audience will be (in the next year or so) for advertisers or promoters.

One deal is not gonna make YouTube's case, neither is it a guarantee for long-term success. BM, on the other hand, knows how to build on momentum, and they may prefer to have a smaller group of viewers/audience on their website. This smaller group, however, has often proved to be more valuable to content owners than the pennyless kids.

David Hallerman

Too many observers want to make it a contest between professionally produced content vs. consumer-created content.

In fact, the audience for YouTube, as one example, goes there for both. One attracts the other, and on the Web, each needs the other to create a robust audience stream.

So, while the lion's (and lioness's) share of monetization will be attached to professionally produced content, at least for the next few years, a site that's just such content -- and demands fees to access -- won't succeed as much as a mixed-content-creation site.

Robert Atkinson

To take the contrary view, if done right the big media alternative video site could be wildly successful. The vision is that of advertiser-supported on-demand TV shows. Imagine all prior episodes of The Office available for a free click. User access would require filling out a detailed registration, capturing various demographic factors of interest to advertisers. Each show would take a full time slot (22 minutes show + 8 minutes ads) which avoids the Tivo effect of user-prompted ad skipping.

Upon a viewer click, the show would stream to the user's browser. The 8 minutes of ad slots would be filled with a user-specific, unique set of ads that are real-time inserted into the stream. The ads would be selected based on the demographic profile of the viewer.

The IT/database requirements are slightly daunting, but the payoff could be huge because the targeted demographics would significantly boost the normal ad cost/1000 viewers charged for broadcast TV. Furthermore, the video would not need to be full screen, and targeted click-through ads could be placed next to the video stream. All very nice.

Ultimately, such a vision is where TV-over-the-internet needs to go. It's a simple migration of the ad-supported TV business model, merely over a different technology path. Advertisers would love it because of the guaranteed metrics and targeting. Users would love it because of the time-shifting and full long-tail library, not only of shows but also great moments in TV. Add in blogs and suddenly you've got a social community built around each episode. Such feedback could even be used by writers to thread in popular hooks for future episodes.

The only implementation problems I can see are:
(1) the underlying technology, which would require significant investments in video server databases, new ad-insertion techniques, and wads of bandwidth. The development time for ad-insertion technology could be mitigated by pre-determination of targeted ads by viewer, so when that viewer clicks the servers merely do a db lookup to determine which ads to serve up.
(2) security of user information and content delivery
(3) ensuring users enter valid, accurate demographic info
(4) balancing the politics of NBC, CBS, and ABC as masters. Who determines policy and level of investment? In some ways, this whole thing would be much easier to implement by a single network. It would cost proportionately much more, but such an single-master investment would enable (a) a platform for brand diversification (NBC-iTV, NBC-Family iTV, etc.) and (b) a platform for other content providers (Comedy Central etc.) to rent.
(5) $$$.

BTW, I'd be happy to program manage this whole project. It's right up my alley, so someone let me know if you need help implementing this.

Neal S. Lachman

Robert,

I completely agree with the advertiser-paid businessmodel, but that could work for YouTube as well. I agree with David (the commentor above you), that a mixed-content portal would be the best destination.

You are refering to pinpoint and database marketing. And yes, it works, really. I know of a UK company that produces interactive programming (game shows) for some UK networks, and they have linked the marketing/advertising to their databases. One of their customers, BskyB, was making lots of money this way. But this system was build on a cable/satellite (set-top-box) platform model, not online. I think there remains lots to be said about a potential YouTube competitor.

Neal S. Lachman


A nice example of how Big Media can use the Internet.

http://www.nytimes.com/2006/12/21/arts/television/21sket.html?em&ex=1166850000&en=a640f5f84bc4108c&ei=5087%0A

Given the subject matter, it was little surprise that NBC bleeped a recurring word in the chorus 16 times. But soon after the broadcast concluded at 1 a.m. Sunday, viewers who’d seen the bit on TV (and others who had just heard about it) could find the uncensored version online. That’s because the network itself had placed it on its own Web site (nbc.com) and YouTube.com, under the headings “Special Treat in a Box” or “Special Christmas Box.”

In less than a week the official uncensored version of the video has been viewed by over two million people on YouTube alone.

TallTroll

Viacom pull out and Time Warner and Disney confirm they aren't interested.

That pretty much shoots that in the ass then.

Big Media doesn't get it, and at this rate, never will. Business inertia will keep them going for so long, while their value decays, until Google (or insert your own favoured internet company here) can afford to buy them out, and show them what they should have been doing in the first place.

Neal S. Lachman

Are you serious, TallTroll? Do you remember 2000, when a high-flying ICT company (AOL) bouth the largest (Big) Media company (TW)? That distastrous event in business history was not just a mistake, it was a lesson for the industry to be learned and get wiser from.

When the AOL/Time Warner merger was announced in January 2000, their combined market cap was $280 billion. Can you please tell me why it would be wise -anno 2007- for a search/advertising company to repeat what AOL did? Cross promotion and cross business? Oh yeah, I guess AOL didn't think of THAT!

Matt

YouTube won't be toast, but it is in for a worse 2007 than 2006 see YouTube will sink in 2007.

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