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In August I predicted that YouTube would be roasted by Christmas.
So, I read the news that Google acquired YouTube for $1.6b while chewing on some humble pie. .
So what happened? Where did I go wrong?
Since writing that post I felt pretty confident with the news flow and additional comments from informed people like the illustrious (and boisterous) Mark Cuban who said it would be moronic to buy YouTube..
I will stick to my analyses of YouTube’s situation but admit that I failed to see one, rather intricate, way out.
I overlooked the Google Distortion Field. Today Google has a 100 strong legal team who are masters in copyright fights. Tactically, by owning YouTube’s eyeballs they are further consolidating their leadership of the paid link advertisement market. They are protecting their money-making franchise from Microsoft, Yahoo and AOL. They alone could buy YouTube and shoulder the implications.
Furthermore, what really brought a smile to my face was their cunning plan to bring some media companies into the deal. It appears that the morning of the day that YouTube were going to sell to Google, they offered Universal Music Group, Warner Music Group and Sony BMG (and maybe others we don’t know about) the in YouTube. Wow. In one move YouTube (and Google) rewarded these media companies for not suing them to date with an estimated $50m windfall and reduced their legal liability going forward.
Kudos to Chen and Hurley!
tags: YouTube, Google, video
Last night I was reminded of my conviction that any business model build around mobile is doomed and that advertisers should ignore this medium for the time being.
Last night I was at PaidContent’s successful LDN ContentNext Mixer networking event that had over 350 attendants.
I talked to a number of mobile start-ups everybody I talked was in mobile for some reason). All had good ideas, none where getting traction. Many were desperately trying to find a work around the network operators.
Think about the innovation you’ve seen in the Internet since 1995 (the year Amazon launched and Netscape IPOed). Think of how you use the computer today compared to back then; of all the innovative services that have been launched; about the revolution we have experienced in the way we communicate, share content, find information. To name a few there is: Amazon, Hotmail, online news, eBay, Wikipedia, Yahoo, MySpace, YouTube, Google, Expedia, online banking, Napster, BitTorrent, digg, SecondLife, blogs, email, instant messaging, Skype…
Now think of the innovation you’ve seen in mobiles since 1985 (when mobiles began to be widely available) – and note they had over 10 years head start. Think of how you used your mobile phone then and now : uhh… you probably still use it to make and receive calls and text messages. Okay, to be complete there is a 1% or less sliver of mobile users who are Blackberry users; or who send picture messages, make video calls or watch TV. But, to drive the point home, these services were launched in the last two years or so.
So what happened to all the mobile entrepreneurs? Why haven’t we seen innovation on mobile phones as we say on PCs. The entrepreneurs were snuffed (1). Because they control the network the mobile operators figured they ought to make all the profit from any business using their infrastructure and totally control (own) the user experience (2). I know of three mobile-based start-ups, by friends of mine, all with reasonably good ideas, that fatally partnered with mobile network operators. The exception was – there is always an exception the defines the rule: ringtones.
Mobile network operators were (and are) too greedy. The only entrepreneurial mobile environment is iMode in Japan where DoCoMo charges a lowly 9% commission on sales.
And that’s my point. The only way a mobile-based business can succeed is to avoid, at all peril, the mobile network operators.
Prediction: Until there is widespread WiFi and 3G access to the Internet via mobile phones (in other words, mobile-based business can reach consumers by going around network operators portals) there will be limited opportunities to establish profitable mobile-based businesses. Established companies should steer clear until then.
(1) The death of innovation in a closed network environment should serve as a warning to US regulators being lobbied by US operators trying to create a
(2) Another, technical reason, is that mobile phones didn’t have a standard operating platform equivalent to Windows and HTML – until the recent arrival of Java enabled phones. However, for years Nokia represented over 60% of the handset market which is big enough a market. So, though the technical conditions for innovation of services on mobile phones was not ideal, it was not unsurmountable.
Why don’t broadcasters simply tell when the third series of Lost will start again in the UK?
Tonight, at the fifth Beers & Innovator get together, I met with Paul Pod, one of the founders of TIOTI (Tape It Off The Internet). The idea behind TIOTI is to help people find the programs they want to watch.
Boy, do I need that! I just can’t understand why broadcasters don’t let viewers subscribe to an email service to alert hem when they favourite programs will air. Yep, just an email newsletter. Of course, if you want something more complex I could propose SMS alerts, synchronization with my calendar software fan groups, recommendation engines, RSS feeds, etc.. But just a good old simple email newsletter would do.
Annoyingly, I have been forced to become a Radio Times reader to avoid missing the new season of Lost, Desperate Housewives, Arrested Development, Curb Your Enthusiasm and 24. I am very frustrated for having missed the opening episode of Extras and Bremner, Bird and Fortune.
I embraced TIOTI’s proposition as soon as Paul began explaining it to me because it solves my need to find the ongoing episodes of the series I’m hooked on.
TIOTI is far more complicated than my email newsletter idea (it has BitTorrent feeds and more) so broadcasters still have time to react. And, react they must because they run the risk of losing my eyeballs to content that I download into my PC and pump into my plasma screen begging the question ‘can they afford to bleed audience like that?’
tags: TV television user centric
Today ITV announced that they are building a broadband portal to replace ITV.com. As far as I know, they are the only European broadcaster doing so. Why?
ITV are following on the lead of American broadcasters all of whom, for the start of the Fall TV season, have launched broadband portals offering viewers rich video experiences. ABC was the first to launch with a pilot in March and for the Fall has succeeded in selling over $2.5m per quarter worth of ads on for its broadband portal this season. NBC, Fox and CBS have their own services.
It is a necessary move for broadcasters. Their “sofa audience”, the people that watch traditional TV, is dwindling. To make matters worse, it is the most sought after segments – the teens, young adults and affluent middle-aged – that are swapping the sofa for the computer.
So, to regain these valuable eyeballs broadcasters need to develop compelling broadband sites. Key features include full screen viewing, simulcast (watch it on the PC if a family member has hijacked the TV); catch-up (if you missed this week’s episode on TV you can still catch it online); show extras (eg, scenes cut-out, interviews with key cast members) and archive both for shows and advertisements. It is not a trivial exercise. The video should be surrounded by related content (eg, other video, articles); invitation for the viewer to participate (eg, join a forum) and recommendations (eg, “you should also watch this”). More advanced broadcasters might want to offer personalization options such as letting users create (and share) their own playlist.
Building such portals requires 3 to 9 months of planning and development depending on the broadcasters technical infrastructure (I know, I am working on one such project at this time)..
There is a business case though, admittedly, it still has to be proven. Broadcasters can generate incremental revenues.
1. Selling advertisement during the playback of simulcast, catch-up, extras and archived content.
2. Selling more intricate advertisement packages (eg, take-overs) and sponsor dedicated sub-sites.
3. Extending their show’s franchises (and advertisement opportunities) by offering spin-off webisodes. NBC, for example has created The Accountants as a spin-off of the highly successful US version of The Office.
4. Inviting users to participate, to contribute their own content and, in the process, generating more traffic to the portal.
There is also the potential to sell subscriptions for specific services (eg, archives). However, the general wisdom at this time is that it’s better to maximize the number of viewers with advertisement-paid content than to impose a subscription fee and risk low take-up.
When I did a quick check of the online offering of the major broadcasters in France, Germany, Norway, Spain, Sweden and the UK all I found were traditional, text rich websites that inelegantly played video extracts on a pop-up window.
I don’t know why European broadcasters haven’t begun to develop their broadband offerings. After all, the downward TV viewing trends are common across Europe and broadband subscriptions are becoming widespread and the business case is there (to be tested).
Prediction: In the next 18 months three to four leading European broadcasters will launch broadband portals.
tags: TV broadband television