Archive for October, 2006

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YouTube – Good Stuff = ?

Was the valuation of YouTube with or without the good stuff? Once you subtract clips from Comedy Central and other copyright holders who aren’t getting compensated for their work, what exactly is the value? Jason Calacanis has made this point in several forums. It’s much easier to build a popular Web property by using copyrighted material without compensating the holders of those copyrights. The economics are excellent. Quality content is free, you aggregate the audience around the content and attach ads to it. Big traffic means big advertising dollars. Once YouTube isn’t an omniscient TIVO and a dependable reference point for anything amusing distributed through broadcast television, what exactly is its value? Is it still $1.6 billion?

Traffic comes and traffic goes. Napster’s traffic dried up. YouTube’s may as well.

Is Television A Solitary Activity?

Steve Gillmor writes that “TV is Dead.” Clearly the concept of broadcast television as an event-based, time-anchored schedule is dead. The VCR, DVD Player and the DVR took care of that. YouTube ends up being a TiVo that just records everything and you find your programs through search. But I’d contend that Television is a social activity, many people to one viewport. The computer tends to be one person to one viewport.

Television isn’t dead, centralized broadcast schedule programming is dead. The user now decides today’s line up of shows, and does it fresh everyday. The business of televsion is aggregating audiences around popular shows and attaching advertising for a fee. When a clip becomes a big hit on YouTube, it’s potentially a powerful advertising vehicle. But will an advertiser want to attach its message to the 2 million viewers of LonelyGirl15?

As the number of content modules explodes, the individual’s capacity to consume such content remains the same. There are still 24 hours in the day, we can talk multi-tasking all we want, but we aren’t going to be watching 10 Web videos at once. With the cost of production going down, it’s possible for niche audiences to support the creation and distribution of digital media products.

The interesting economics emerging out of this have to do with scale. Spending tens of millions of dollars to produce a media product and then selling it to the masses has been a fine business model. But it requires the product be sold to large audiences, preferably audiences that will buy more than one viewing and the attendant merchandise. It’s a business with normal margins. But what happens when a cheaply produced digital media product becomes a hit with a mass audience? If it has the business model and monitization schema in place it becomes an incredibly high margin business.

Oddly enough, that’s the way the software business works. Once the software has been produced — if you can get everyone to use it, the margins are incredible. See Microsoft.

Open ID

No one wants to give up my identity. Everyone wants to own a piece of me. My bank, my brokerage, Google, Yahoo, my Blog, Amazon, Microsoft, IT Conversations, Podshow, Crazy Egg, and many others too numerous to mention all want to own a little piece. But ask any of them if the “me” they own is that same “me” that the others own and you’ll draw a blank stare. Am I all those different me’s? Or am I a single me splintered and inscribed in a thousands closed systems?

Technorati accepts Open ID. Why can’t I log in to my bank with user asserted credentials?

Designing Serial Consumption of Infinite Content Modules

The television remote and the metaphor of “surfing” to find desirable broadcast streams will undergo a change. With the exception of live news, sports and performance — recorded content will become untethered from specific time slots. Time shifting will become the norm. (A revolution started by Bing Crosby). Replacing the tv remote will be a scheduling tool to create a river of content modules. Organizing, finding, discovering, berry-gathering — and then booking into a serial stream, that’s the new interaction. In some ways, we’re already used to it: it’s the Netflix Queue. The ambient findability of content becomes critical.

The economics of this interaction have yet to emerge. At the moment, it seems to resemble simple gluttony. It’s as though a hungry person is sitting in front of a free smorgasbord — what will be eaten and in what order?

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