Free Media Publishing Leaps Into Video

Bill Gates Praising the Mac


Here's a little example of why Time Warner and other "old" media conglomerates are in trouble. It's a video clip of a much younger (than now) Bill Gates at an Apple developers conference. I found it on YouTube, and linked it to this blog post. Mostly just to demonstrate a point about technological advances in free online publishing.

I wrote a piece about YouTube recently. It's the online video clip site which functions somewhat like ShutterFly or PhotoBucket. My consulting friend S remarked to me the other day that YouTube allows clips to be linked to blogs. In her words, now "everybody is a star." Or soon could be.

She and I have debated the coming integration of online video entertainment and broadcast/cable content. YouTube adds another interesting bit into the mosaic.

Consider what has now happened.

This blog is free to you and me. Google supplies Blogger for free, even without the ads. Dominating more content in a surging product/service space is reasonable strategy, if the basic cost of doing so is buying more servers. I eventually realize something like the price of a cup of coffee for any click-through revenue from the ads on this blogsite.

Now, YouTube seamlessly links its clips to Blogger. Anyone who shoots digital video of interest can post it for free on YouTube. Competition for content has become so stiff already, that YouTube's competitors, such as Revver, are paying people larger slices of ad revenues to post videos on their site.

This morning, the on-air staff of CNBC held a hand-wringing debate over blogs. Apparently, there was a recent incident in which some blogger posted false information about a company, and its stock price suffered.

Aside from the hilarity of an entertainment show like SquawkBox, the show on which the 'debate' aired, treating blogs from a 'news' standpoint, their discussion demonstrates how much reach independent, "free" published media now may have.

Commentary and editorial blogs, such as this one, are unlikely to be running afoul of any laws regarding insider trading. With increasing amounts of online media available on which to comment, and a free base of operations, how much value added can large media conglomerates create anymore, outside of pure entertainment? It seems even they can't make their news operations pay for themselves. And commentary can be published by anyone for free.

Granted, distribution is a challenge. But it's a far cry from a decade ago, when it wasn't even feasible for someone to write a daily "column" without a syndicated deal with a newspaper chain.

If I wanted to, I could "cast" this blog in video, and post it, without cost, on iTunes or YouTube. In the case of YouTube, I can automatically link my video back here to a post. Somebody else's business model is paying for all the transmission bandwidth, disc storage, and server processing to make this happen. In fact, Google's, and other new media firms' business models are all about generating revenues from viewers, not providers. And not even making the viewers pay directly or explicitly, but, rather, through advertising.

Now, where did I see this before? Oh, right. It's the new version of the "old" televsion business model. Except, this time, it's eviscerating broadcast television.

With the arrival of direct viewing of media content on your television, from the internet, cable revenues from "repackaging" content from "channels" and networks will begin to suffer as well.

My, how times have changed. Now, I can read or hear a story, or view a clip, and write about it the same day. Even link, in many cases, to the story or clip. As I did in my recent piece about Jack Welch in Fortune Magazine. Or downloaded this Bill Gates clip from YouTube.

In a world that supports and embraces this sort of inexpensive integration of multi-media, editorializing, and analysis, what does that portend for the media giants of our time- NewsCorp, Time Warner, McGraw-Hill?

Consider what this integration means to the music divisions of media conglomerates, such as Time Warner. Would a new band not now be able to digitally shoot a video of their performance, and post it free to YouTube? Then link the video(s) to their website, and publish the website URL at their concerts? Then go straight to iTunes with the content they record from digital tools on their iMacs, and....voila! Where's the big publishing giant in the middle? Gone.

Suffice to say, I'll be surprised if any of them appear in my portfolio's selections of consistently superior, high-growth companies.