Wednesday, April 04, 2007

The New Anti-YouTube Consortium

The recent alliance of MySpace (NewsCorp), NBC, AOL, Microsoft and Yahoo for video clip distribution, obviously presents a competitive presence to Google's YouTube unit.

The Wall Street Journal article on the subject, from 23 March, included this passage,

"This is a game changer for Internet video," said News Corp. President Peter Chernin in a statement announcing the deal. "We'll have access to just about the entire U.S. Internet audience at launch." News Corp. and NBC said the four portals account for 96% of the monthly U.S. unique users on the Web.

In the past, I have found Peter Chernin to be distinctly "old media" in his outlook, and I believe that continues here. Despite Chernin's rather pompous statement, I'm not at all sure the alliance is a "game changer."

If anything, YouTube was and is the "game changer." Does anyone seriously think this recently-announced alliance would have occurred, but for the competitive pressure and observed consumer behaviors brought about by YouTube's popularity? When Google bought it, that only added to the sense of urgency on the part of old media interests who own old content. My prior posts about this, found by clicking on the labels for "old media" and "new media," discuss some of these issues. Older, as-yet unlabeled posts, do so as well. Of the newer ones, this one, here, perhaps best reflects my thinking.

That is, this alliance reflects a broad "hunkering down" of old media behind its own walls, hoping to stave off the inevitable move by consumers to view short, compressed video clips of its own choosing. Paul Kedrovsky has likened this to the Napster-originated trends that have eviscerated the music business sector of late.

So, if anything has been game changing, it would seem to be YouTube's allowing consumers to expect short clips to be viewable for free.

However, take a step back, and ask yourself, 'what do the alliance partners stand to gain by their rejection of YouTube, that they could not have had through an alliance with YouTube?'

It seems to me that it is simply advertising revenues. Pure and simple.

Like Amazon, or eBay, YouTube has staked out, developed, and established a single, highly-visible, valuable piece of online real estate. For all Chernin's puffery, consumers go to YouTube for video. They go to the other sites for a plethora of needs, but it's unclear that video is one of them, or a salient one. Visits to the various sites are not all 'equal,' in this sense.

More to the point, do I, or most consumers, really want to have to guess, or try to keep straight, which sites have which content? When visiting YouTube, I just search, and view. Pretty much any significant, recent news clip will be there. Plus much entertainment, as well. How do I determine, in advance, the URLs and specific content type of each of the 'alliance' sites?

I still contend that the networks', and all video library owners,' best alternative was and is to revenue share with YouTube and distribute on that site. It's unclear that the financial economics of all these other video distribution sites will pan out, whereas, when they are concentrated on a provider's site, the content owners simply collect a payment for their share of ad revenue, plus any sales revenues from consumers who choose to buy the clip they are watching on YouTube.

So, in conclusion, I think that I am underwhelmed by the NewsCorp-Yahoo-NBC-MSN-AOL alliance. It smacks, to me, of old media trying, once more, to lasso a consumer behavior trend that is already out of the gate and roaming far afield from the old consumption models for video content.

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