The Rush By "Old Media" To Offer Online Video

Recently, I wrote, here, about Apple's iTV announcement, and its probably effect on cable TV providers going forward. Subsequently, I wrote about the recent Goldman Sachs media conference, here, discussing the rush of existing content library owners to dump....er......make deals for the distribution of their libraries to any and all digital channels while they still have value.

Then, last week, the Wall Street Journal ran an article in the back pages of the second section discussing the rush by all sorts of companies to offer online digital video now. The piece was entitled, "As Internet TV Gains Popularity, Cable Firms Bulk Up Offerings."

A nice idea, but a little late, as indicated by this line in the article,

"Video Web sites now draw users in numbers that rival those of cable or satellite companies. YouTube, the country's No. 1 online-video site, had more than 34 million unique visitors in August, according to Nielsen/NetRatings. MySpace was second with 17.9 million unique visitors. In comparison, Comcast, the country's largest cable company, has 24 million subscribers, and DirectTV, the largest satellite-TV provider that is owned by News Corp., has 15.5 million U.S. subscribers."

So the hi-speed access that came along with cable-TV has now grown to undercut the latter by allowing free, independent production and distribution of video content which is growing to rival the paid content on the original cable pay-TV systems.

If this situation doesn't demonstrate Schumpeter's visions of creative destruction at the extreme, where a firm's own success creates the undercurrent that hollows out its competitive position's strength, what does?

In this case, though, I think cable companies are myopic. Consider this closing quote from the WSJ article. The source of the quote, Steve Burke, CEO of Comcast, said, in reference to his own idea of

"creating an extensive viewing guide that would aggregate Comcast's TV schedule with online clips and video-on-demand options, giving people a mega portal for one-stop viewing shopping,"

"We're not alone in our aspiration to be that one place."

Now, I think that's the problem with old media's viewpoint.

There is, in my opinion, no "one place."

YouTube is 'one place,' alright, but hardly the "one place." It may not even be king of the hill in another year. That, of course, is the risk a potential acquirer will have to take.

The essential concept of internet-based, free video content sites almost guarantees no single site will be "the" site. Wherever a critical mass of video content may be gathered and offered, a viable site may be created. The company that has really missed the boat on this is, of course, Amazon.

Amazon, with its broad array of storefronts for independent book sellers/shippers, could easily have offered the same type of home to indie video producers, becoming the internet's video 'general store.'

Not anymore. That opportunity is gone, and, with it, Amazon's ability to capture anything beyond "me too" traffic and revenues.

It's simply incomprehensible to me how, having seen the future, a la YouTube, the CEO of Comcast still doesn't "get it," and is throwing money at an attempt to create, much further down the road, an omnibus, ostensibly partially-paid video site, to challenge a free one. Between Comcast and TimeWarner, one wonders if any old media companies will be worth more than a fraction of their current market values in a few year's time.