Two stories broke this week that represent the microcosm of the marriage between online video sites and traditional media companies (i.e. interdependence on one hand, tension on the other):
1. Viacom is demanding that YouTube remove more than 100,000 clips from the video-sharing site. (Source: the Los Angeles Times. Registration required to view article)
2. LisaNova, of YouTube fame, scored a TV contract with the sketch show MADtv. (Source: Pete Cashmore and his always awesome blog, Mashable)
Two burning questions:
1. YouTube vs. Viacom. Which brand would be strong enough to do without the other?
2. When will YouTube stop being for the fringe and start becoming part of the mainstream?
My take on both issues:
1. If I had to choose a winner (in other words, amicable negotiations be damned), I posit that YouTube's brand has more leverage than Viacom may think. Although the YouTube audience is a fraction of the total TV audience, it still represents a highly influential bunch. Heck, the cost of high-speed internet connection alone qualifies its users above low-income households. And aside from the purchase power this audience yields, its influence power over products trends and purchase behavior is more telling.
The LA Times piece poses the question, "substitution or promotion?" Within the next year, I say the question for companies like Viacom will be "simply promotion or an absolute necessity?" As much as YouTube's draw rests on its immense cadre of content, it might now wield enough power (via partnerships and oh yeah, a little thing called Google) to overcome the deficit of Viacom's content (even though Viacom's "The Daily Show" and "The Colbert Report" represent huge draws on YouTube). And although the aforementioned programs have a loyal fan base and online channels are undoubtedly maturing, Viacom limiting a major channel of its online distribution will hinder its growth path.
On another note, this situation is a classic case of "biting the hand that feeds you." When it's promoting your product, you're okay with it? But when the property matures, you all of the sudden want to take control of the traffic and think you own the consumer? Um, no. *steps off soap box*
2. Fred Wilson at A VC ran a quick calculation for Lisa Donovan (aka Lisa Nova) that suggests that Lisa could make pretty good money staying on YouTube. Assuming a $15 CPM and assuming that YouTube takes only 33% of total ad revenue, Lisa would have made approximately $84,000 a year. And this was last September. Pre-Google, pre-spike in traffic, pre-new audience acquisition. Which I safely assume would jack that $84K/yr to upwards of $90K/yr (conservatively).
The most intriguing point that Fred makes is when will the web stop being the minor leagues? And this is where I disagree with Fred.
I think the time is upon us already.
With all of the assets we can now create online - blogs, vlogs, rss, even full-on podcasts about our lives - the appeal of sharing our personality will continue to represent a compelling force that drives more people towards the internet. If behavior from the couch is passive then behavior online is active, and that alone makes the studio audience of the internet more fervent than the audience at home. It's the difference between 60,000 fans at Fenway Park and 100,000 fans at Tiger Stadium. The capacity might be more in the latter, but the passion cannot be duplicated from the former.
What do you think? Let's hear your thoughts.
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