Now that Google has bought YouTube, what do you do if you’re an executive in the new media division of, say, Viacom? Or NBC? Do you partner with Google? Do you roll your own service? Do you sue them? Some combination of all three?
In the past year, whenever a media rights owner has protested their stuff was up on YouTube, they would invariably be met with a chorus of blogger-know-it-alls (hey, I might have even jumped in!) telling them they were 20th century dinosaurs, that they should let their stuff flow freely over YouTube, get over their issues, enjoy the free exposure, and join us right-thinking Web 2.0 people. That may have made sense when YouTube was a scrappy, independent start up.
But does it make sense now? Now that Google owns them? Is doing a license deal with GooTube basically ensuring you’ll have the same dependency on them in 5 years that we have on the Middle East (and Venezuela!) for oil?
Maybe. Consider this quote from Chad Hurley earlier in the summer:
I think we’re in a good position because we have created a marketplace for video and it is this this natural network effect that we’ve created where we have the most content becuase we have the largest audience and that’s going to keep continue to drive each other. (emphasis is mine)
Both sides, both the content coming in and and the audience we’re creating. And it’s very similar again to the eBay issue where they had an auction product that gained critical mass. Yahoo! came by and started creating their own technology, potentially better technology, but they didn’t have the consumers there to pull it off. So we feel we’re potentially in the same position with our video site.
I think this claim, that YouTube has built a network effect like eBay’s, is harder to unravel than it seems on the surface. I’ve thought about it a lot, and am not sure Hurley’s right. There are reasons why true peer-to-peer marketplaces like eBay tend to generate centralized, easy-to-defend network effects; I’d argue YouTube is not really such a marketplace.
Instead, what I do think has happened is that YouTube is now the defacto place to search for video, and has built a temporary network effect around that phenomenon. The reason this has occured is because (a) the stupid way we’ve architected video on the Internet to date makes it hard to search for files and play them back easily, and (b) YouTube’s users have the most definitive library of video clips ever created. Some of it, uh, not really legally licensed.
To illustrate: try searching for Daily Show clips on the Internet with Google, and then repeat on YouTube. It’s clear which is better. I am now trained to look for the latest DailyShow clips (and almost every other type of video I can think of) on YouTube. I think that’s why Google bought YouTube, by the way. Not just for the so-called eyeball traffic.
That GooTube is in a position to own video search is a very dangerous thing for media companies and rights holders. If GooTube is able to maintain their position and build upon it, if “a” above doesn’t get solved and “b” continues, GooTube becomes the Internet version of Comcast, but with 80% homes passed, not 20%. It becomes the one company you have to do a deal with if you want your content seen (because everyone is going there to find video, because general search on the Internet doesn’t work).
So, if you’re the head of MTV New Media, do you go and license all your content to GooTube now, helping them to cement their position as the one place to go for video online, and ensuring your future subservience to them? Doesn’t seem like the smart move to me.
I don’t think suing helps, either, by the way. Although I’m sure that will be a strategy for some (you can see people licking their chops to get some Google cash). I think the better strategy is to compete. It’s not that hard to build a great sharing site like YouTube’s. Go do that if you’re MTV.
If Comedy Central had a site that was as easy and fun to use as YouTube’s, where I could find a great stash of Daily Show and Colbert clips, where I could embed them in my blog or get the latest clips delivered via RSS, I’d be happy. I’d be even happier if I could get a high quality version of the clips — I’d probably be willing to subscribe — that I could download without DRM.
The great danger for GooTube is that their temporary network effect will go away if their library is diminished. The vaunted network effect of the old Napster amounted to very little when the music was taken away. Same with GooTube. If they have to start taking down lots and lots of clips from the service, their position as the place to search is diminished. If people like MTV and Comedy Central really compete, and offer compelling services with their programming (and indeed, MTV has started with their beta iFilm service), and quit hiding the clips behind javascript so they can’t be properly indexed and searched, that will also hurt GooTube (but will help Google!).
So, I think the answer to the question I asked at the top is: don’t do a deal with GooTube (or do a very, very limited deal); ask them to remove the unlicensed stuff you own from their service; but don’t do that until and unless you’re able to offer a video service that is just as good as YouTube’s, if not better. Either your own, or through a partner.
