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GooTube Backlash February 21, 2007

Posted by David Card in Media.
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Goodness knows, I’m enjoying it. Since the Journal did a page one story, all media are following, including this fairly wise opinion piece under the fairly silly headline of “Content Will Always Be King” in the same paper. At the risk of talking out of both sides of my mouth — hey, I’m an analyst, I contain multitudes — let me reiterate my belief in the power of hits (see Figure 3 and elsewhere), usually created by professionals, balanced against my belief that Viacom is being dumb by not using YouTube, at least for promotion. Some things to keep in mind:

– Content isn’t king. Audience is king. Sometimes distribution has some leverage, sometimes exclusive content ownership does. But if you own a good audience, you’re always in good shape.
– Google wasn’t even in the audience business the same way traditional media companies are, till it bought YouTube. Google is still learning how to play golf with media moguls.
– Viacom — or any of the other media congloms — has studio businesses and network businesses. They’re fundamentally different. The Journal columnist gets this; the page one story is fuzzier. Networks can’t bet the farm on one studio, and studios usually are best-served by multiple distribution channels (unless someone’s really willing to pay premium rates.)
– There’s more than one game in town, even online, in both the studio and distribution businesses. And it’s going to get more, not less fragmented, as colleague Joe Laszlo has analyzed.
– That said, YouTube’s the biggest game in online distribution right now, and Google’s got plenty of margin to share. But there’s no real money in online video yet. (Figure 9)
– Talking about Joost — a way to distribute full-length, high-quality video — and YouTube in the same breath is brain-dead way oversimplifying. As is equating the original Napster and YouTube.

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