Cuban Shreds GooTube; I Respectfully Differ

Mark Cuban cheers on Viacom with a lengthy diatribe on the naive idiocy of all-content-should-be-free idealists, GooTube's arrogance, and how Viacom has "already won."  I agree with much of what Mark says, but I do think there are places here's where he's oversimplifying and/or missing an important point.  To wit:

1. No smart pundit I know is arguing that GooTube should be able to stream Viacom's content for free in perpetuity.  On the contrary, the smart folks are simply hoping that Viacom and GooTube can work out a deal in which Viacom content is available on GooTube.  Viacom appears to be happy to do such a deal--as long as Google forks over, say, $500 million, in advance.  GooTube, meanwhile, appears to be happy to do it as long as Viacom demands, say, nothing in return.  The hope is that the two companies can meet in the middle.

1. Whether or not GooTube is able to host Viacom's content, it will do just fine.  Currently, GooTube is in a similar position to a cable company selling a basic cable service and a menu of premium services.  The cable company will make more if you buy premium services (and it will share some of the revenue with the content providers--just as GooTube will), but it will do just fine if you only buy basic cable.  What the company has to do to get you to buy basic cable is assemble enough content that you find the service worthwhile.  GooTube has already done this, and it will continue to attract millions of users whether or not another Viacom clip runs on the service ever again.

Here's what I would like to see--and I would be grateful to anyone who could refer me to (or send me) the info: a detailed analysis of GooTube's traffic streams.  Specifically, a breakdown that shows the percentage of total views that are user-generated or licensed versus unlicensed.  I continue to think that no single content company, no matter how powerful, has the leverage to force GooTube to sign a distribution deal at any price.  If I'm wrong, however--if, say, Viacom's content accounts for, say, 35% of total streams--it would be nice to know that sooner rather than later. 

Comments

[the cigars are good tho]

I'm so disappointed in you. cuban deserves a 'close read'? please.

[Henry Blodget]

Sorry...dumb phrase...the hazards of no editor.

[bear]

I think Cuban's main point was that Viacom needs to be assured that no one is posting full length episodes of its shows without its permission (or even the most interesting parts).

I guess if google was willing to take the line that users cannot post any copyrighted material but the copywrite owners themselves were posting it that would be ideal.

of course making sure there is no copyrighted material on the site seems like a tough thing to filter for.

[Lloyd Allen]

I have read everything Mark has to say about not just You Tube and Google, but so many other companies and other ideas. He has a holier-than-thou, I'm smarter than anyone, "sore looser" attitude, and it's ALWAYS a lengthy diatribe. He has become an imbarrassment, and at times, the laughing stock of the Tech Community. He's constantly being "shredded."

[bear]

Yeah well cuban got 5 billion from a yahoo for his company that was not worth anything close to that.

so the tech establishement might laugh at him but he probably does not care that much.

[Victor]

http://www.pbs.org/newshour/rss/redir/http://www-tc.pbs.org/newshour/rss/media/2007/03/14/20070314_youtube28.mp3

Excellent special on the Nightly News Hour (PBS) with a law professor from Columbia, which supports your general point of view Henry (on Viacom's power play).

[Jeff]

On a related note, I just had dinner tonight with a Googlite in the know who mentioned that YouTube usership has actually accelerated since Viacom began its assault on YouTube. More free publicity courtesy of Viacom. And Google shows no inclination internally to blink in any way with Viacom.

So, as Henry has said, time will pass and Viacom's content will lose marginal value as YouTube grows and other content providers sign deals on revenue sharing (and who knows maybe even premium placement on YouTube).

[Michael Stone]

Henry,

I don't understand your rationale for wanting GooTube and Viacom to "make nice". What happened to good old fashion competition? As someone that has been in the Internet space since 1996 I can tell you that, as an industry, there needs to be more rivalry and competition. I love the fact that MSN hates Google and Google hates Yahoo. I think it's healthy.

Coopetition is bullshit and is usually not sustainable. The graveyards are filled with Internet companies that partnered with their direct competitors. AOL is a great example. They got the check from Google and Google accumulated all the market value. The same goes for Yahoo.

Viacom needs to find a way to generate "several" billion dollars in market capitalization from the Video industry over the next 5-10 years. They missed search and performance-based advertising - two major value creators. They cannot afford to miss Video. Generating license fees from Google is a joke compared to owning the next YouTube. I strongly suggest that they make their own way in the world before they miss this coming video revolution!

[Still Inside]

The Viacom attack on YouTube is not an attack on GOOG for a little bit of money, it's an attack on the entire model.

Clearly if Viacom wins some money here then every other content-creating company in the world from Hollywood to Bollywood are going to want a piece of GOOG and are most certainly going to have the legal case to get it. It's not as bad as Napster vs. RIAA, it's actually a lot worse.

One thing the discussion seems to be missing here is that this is USER GENERATED CONTENT, not some stuff that the GOOG mother ship can simply take down from their website. The minute they have to eliminate ANY content, they effectively need to eliminate ALL content because there's no controlling the unwashed masses from uploading every kind of content imaginable, legal or otherwise. It is exactly this chaos that is the core value proposition of this service. To kill the chaos is to kill the service.

As for Viacom et. al. "losing" this legal battle, the war is definitely not over: they have another weapon at their disposal, which is hacking the network. In other words, hire some hackers and buy them a LOT of anonymous servers and tell them to go kill that YouTube thing.

Pretty soon your download of the last episode of 24 will be a commercial of some guy with a toolbelt on the back of a movie set telling you how are taking food from his children when you steal video.

You'll try again with a different user and maybe a variant on the search and there he is again. And again. And again. Maybe the ninth video you start will be the real thing. Then you'll get four minutes into the video and--right before the good part--boom, it's Kenny the Key Grip there again to end your fun with another lecture. Kenny's friends have been busy on the comments section too, telling you that this one is the "real thing" and those others are "another hack, don't download".

Pretty soon you'll conclude this YouTube thing is a huge waste of time.

Record companies have done this to Kazaa and others with great success. Folks like Viacom can spend a LOT more money doing it. They don't need to "win" the hacking war, they just need to turn the service into a hacker battleground in order to render it pointless for most people.

A decent non-coordinated effort among a few dozen content companies could shut YouTube down within a year.

SI

[AJ]

Hasn't Viacom entered into a distribution agreement with Joost? I haven't kept up with it, but assuming it's still on, Viacom has an imperitive to protect that agreement - distributing content over multiple competing networks reduces the value of that content to Joost, no?