Digital Media, Google, Video

In Case You Didn’t Know It, Video is Huge

This chart (and related stories) released by Comscore got a lot of attention last week.

Facebook is now the #1 site in the United States as measured in “time spent” with 41 billion usage minutes per month. Google is now in second place, with 39.8B minutes, and Yahoo in third place (37.7B minutes).

It got me wondering: how do YouTube and other video sites stack up in terms of time spent?

First interesting discovery: based on the chart below from Comscore, “video” (meaning, YouTube) accounts for 37.5B out of Google’s 39.8B minutes of usage (math is: 144M unique viewers X 261 minutes usage per viewer). That means almost 95% of the time people spend on Google is spent on YouTube. 95%! Unbelievable.

But it makes sense. The chart above shows Google’s percentage share of minutes spent increasing steadily and rapidly from Q3 2006 onwards — right when they bought YouTube.

Given Google’s mission to capture more display revenues (partcicularly branded video display revenues) the value YouTube has provided is incredible. It was a steal — a steal — at $1.6B.

Wrap your head around that for a moment.

Total time watching video online according to Comscore is 154 billion minutes per month (177M people X 870 minutes per viewer), or 2.6 billion hours per month. Or the equivalent of 4 Facebook’s worth of usage.

While Facebook scores reasonably high in terms of total viewers for video on its site (43M), total minutes spent watching videos pales in comparison to YouTube and Hulu; roughly 866M minutes of usage, compared to 37.5B on YouTube and 3.3B minutes on Hulu and 2.7B on Vevo. (As an aside, I’m curious whether the Facebook measurement includes minutes spent watching embedded videos on Facebook, or just Facebook-hosted videos).

The fact that YouTube accounts for such a massive and overwhelming percentage of time spent on Google services is the thing that boggles my mind. Have I somehow gotten my math wrong?

UPDATE: One additional observation: unlike Google, minutes spent watching videos is just a small fraction of the time people spend on Yahoo! While Yahoo! is #2 in terms of reach, it’s a laggard in terms of minutes spent; just 755M minutes of usage per month, or 2% of the overall time people spend with Yahoo! services. Clearly an area where they’ll need to make progress if they are to compete for brand dollars in video advertising.

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China, Google, Internet, Uncategorized

Google & China

Big news from Google today announcing a “new approach to China” as a result of cyber attacks they’ve launched against Google and others. The news is early and incomplete, and we’ll certainly learn more in the coming days.

But reaction seems to be divided in to these two camps (roughly):

  • Wow, Google is so great and they really aren’t evil

OR

  • Wow, what a cynical ploy by Google to cover up the fact Baidu is kicking their ass

I haven’t seen anyone really grappling with the astonishing facts Google alleges. Here’s a taste from their post:

First, this attack was not just on Google. As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses–including the Internet, finance, technology, media and chemical sectors–have been similarly targeted….

Second, we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists

In short: China apparently initiated cyber attacks against Google and apparently other corporations and institutions to help them hunt down human rights activists. If that’s true, it’s wrong, offensive, and reprehensible.  And people should say so, without equivocation.

Now, there are China apologists out there already beginning the lectures: “That’s not how you do business in China.” “Google should know better and do this behind closed doors.” Having spent some time in China this decade, I’ve heard that lecture a zillion times. And I understand and appreciate it when it comes to normal and quotidien matters of business.

But this isn’t about setting up a tire factory or arranging to manufacture gadgets. This is about the government of China (or so Google alleges) launching cyber attacks against companies and institutions in other countries as part of an effort to crack down  on their own citizens and their effort to secure basic human freedoms — of religion, speech, organization.

As I’ve written before on this blog, this is a defining moral issue of our time if you’re a technologist, tech writer, or member in some other way of this community. I love to see the world in grays, but this is one of those issues that is purely black and white. And if you in any way side with China, or advocate a position that excuses their behavior — well, I think that’s just utterly immoral and you should be ashamed.

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Google, Video

Comedy Central & YouTube

I write a post about the dilemma faced by Comedy Central and Viacom executives on Thursday of last week (and what they should do about their clips up on YouTube now that’s it’s been bought by Google) and then  I read over the weekend YouTube is taking down Comedy Central clips on their site. I assume it’s all due to the power of this blog…

As I wrote in the last post, the game has changed now that Google has bought YouTube, and folks at places like ComedyCentral are ensuring their future impotence if they allow GooTube to become the  place to find all video on the Internet (again, Google bought YouTube because it is the current defacto place to search for video).  As much as they’ll be portrayed as villains or idiots  (or both) for forcing YouTube to take down their clips, this is clearly the right strategic move.

But getting their stuff off YouTube isn’t sufficient. What they now need to do, quickly and urgently, is get those clips up on the Comedy Central site. Allow their users to post the clips there. Allow them to embed them into their blogs, MySpace pages, and so on. Give them a better service with higher quality than they got on YouTube. In essence, match the stick (pulling down clips on YouTube) with the carrot (getting the videos up on Comedy Central). Comedy Central should send a message to as many of the folks who posted the videos on YouTube, and invite them to upload the videos to ComedyCentrals video sharing platform (if they haven’t built it yet, they had better do so soon).

If Comedy Central doesn’t do this, doesn’t give their audience what they want on a site they own and control, then they’ll just be playing a game of whack-a-mole. The clips will come down YouTube, but they’ll show up somewhere else, and we’ll all migrate to that new place to get our time-and-place-shifted Comedy Central fix.

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Google, Internet, Video

Online Video Geopolitics, Part 2

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.

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Google, Internet, Video

Delayed Reaction to Google-YouTube

I’ve been mulling the Goog-YouTube acquisition the past week and wanted to share some thoughts.

First off, it’s impressive to see GOOG effectively admit their own video product wasn’t going to succeed. That’s a hard and difficult thing for companies to do.

Second, the “Google is an engineering-driven company” meme is now dead. If it were such a company, GOOG would have done what Microsoft has done — sit on the sidelines, and proclaim building it is cheaper than buying it. Instead, Google saw a big, fat inventory-rich service, swallowed its collective pride, and snapped it up (conveniently blocking Yahoo and MSN from encroaching on their dominance of the Internet advertising space at the same time).

But what’s really struck me about the acquisition is that it so perfectly captures this moment and time in our business, and that this particular moment is so full of ironies. We’ve come full circle to a point we last reached in, say, 1998 or 1999, where acquisitions are not driven and dictated by quaint notions of math and value, but are instead about showing you have momentum and are a dynamic player.

To dicker over price (as Yahoo! appears to have done) proves you lack momentum and dynamism. To question the value and actual worth of YouTube, as Mark Cuban has done repeatedly, is to stand up and declare yourself a heretic and and an idiot and irrelevant all at once.

Of course, maybe those two parties know something we’ve all forgotten (or perhaps that some younger folks never knew). The last multi-billion dollar acquisition of a video-focused service was, of course, when Yahoo! snatched up Mark Cuban’s Broadcast.com. And we all know what happened there.

I have no idea if this is a repeat or not. I have been damned impressed with how quickly YouTube built a strong brand name and loyalty from its users, and it’s clear to me it is far more valuable than Broadcast.com was in 1999. But I just spent the morning reading through the archived articles about the Yahoo-Broadcast.com acquisition, and the parallels are amazing; both deals resonate with analysis from the so-called experts trumpeting the (abstract) notions of “consolidation” and “momentum” and “rich new advertising opportunities.”

It’s our reaction to this that scares me. Our call for big players to do something big (which will probably drive Yahoo! to buy Facebook at a premium) just to prove they’re not sclerotic . Won’t it end up leading to tulip mania, again?

Why don’t we, instead, call this a “one off.” Face(book) it, the YouTube acquisition was a very risky play. And Google is pretty much the only party that could afford to take the risk. Whether it’ll end up as their broadcast.com or Geocities, well we’ll just have to wait and see.

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Blogging, Google, Internet

Bounty of the Internet

This is the kind of blog I love to find, and the raison d’etre of the medium as far as I am concerned.

It’s called “Shoefiti” and dedicated to documenting — both in words from the collective community and on google maps in a great mash-up —  the urban phenomenon of shoes dangling over powerlines and telephone wires.

NB: I stumbled on this site after doing a Google search on “meaning of tennis shoes hanging on telephone wires.” It was result #1. Yeah, Google!

Of course, no definitive answer is provided (maybe, there isn’t just one?) but some fun urban legends recounted. Check it out.

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Google

GOOG Results, Ouch (It Was the Taxes)

I’ve done just a quick scan, and have taken a look at the after market trading (GOOG down 6% already since the bell, UPDATE now 12%), and the quarter doesn’t appear to have delivered on what the street wanted.

From my read, GOOG fell well short of EPS estimates (their GAAP $1.22/share, non-GAPP was $1.54, street was expecting $1.77 or so), and growth from Q3 was pretty shallow (relative to the seasonal blowout that I expect investors wanted and expected, given the share price).

This is not to say GOOG is going down the drain, or a bad company. It’s clearly the healthiest, best, most important Internet company right now. But it does seem to confirm my earlier suspicions they were worried about their growth, and that it wasn’t strong enough to meet the market’s incredible expectations given the share price.

I’ll tune into the conference call for kicks, this should make the folks over at Yahoo! feel a little better…

UPDATE: Listening into the call, and looking more closely at the results table (nice q-over-q presentation here) it’s clear that a whopper tax hit that they didn’t seem to foresee was the culprit behind non-GAAP EPS being off the mark by at almost $.20/share. But even without the tax hit, it’s clear that revenues and earnings would only have met, not exceeded, expectations, and that was not going to be enough to keep the stock flying in the mid-400s, with a P/E of over 90.

Overall, pretty positive presentation from the Google folks. Eric Schmidt and the CFO spent a lot of time talking about potential for the international market to fuel growth in the business. Having spent some time running an international consumer internet business (to be fair, one much, much, much smaller than Google’s) I, too, am bullish about growth.

But I’m not sure they should place too much faith there; they are already at 38% of total revenues for the int’l side, Google in Europe already has fantastic market share and can’t grow too much more, and there are many secular reasons why internet advertising is likely to remain smaller outside the United States for a while. After all, in “traditional media,” about half of all advertising spending is in the United States, mainly because so much of the worldwide consumer demand for products and services comes from United States consumers…

In the long term, Google is right to be bullish, but I think it will be a longer, harder slog than they are admitting.

It will be interesting, all-in-all, to see how the market digests all this news, that the tax hit was responsible for so much of the miss, but the fact too that they would just barely have met expectations even without the additional taxes, which in and of itself would have been a miss and a disappointment.

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