YouTube: Friend or Foe?

"YouTube Won't Cannibalize TV?"  Ha!  Funny one.  Actually, that's the title of a ZDNet blog post by Donna Bogatin.  She sounds as skeptical as I am about this.  Btw, be sure to read this YouTube article in the latest issue of Wired -- the Ball State sportscaster video cited in the article is highly entertaining.

The latest YouTube debate seems to be whether they can really introduce a more lucrative advertising model to their platform without alienating all their current users.  Although you see banner ads on the site, pre- and post-roll ads are thought to be the only way to truly monetize the traffic.  I disagree.  Why not simply reserve the top 20% or so of the video area itself for some sort of embedded banner advertising?  It would either overlay the video itself or push the screen down a bit.  YouTube could create an algorithm that splices in relevant ads on the fly, just like they do with AdSense today.  Besides the obvious benefit of not forcing people to wait for the "main attraction", it also presents the advertising message along with the content itself, likely leading to a much stronger impression.  It's just like all those crawlers you see on CNN and other cable networks -- we're so used to them that we don't really mind them anymore, but they represent an excellent piece of real estate for online video advertising.

Bogatin's blog post goes on to talk about how YouTube really lends itself to "short bursts of content" rather than full-length shows.  That's true today but I seriously doubt it will be a long-term limitation.  Why couldn't YouTube host 20-, 30-minute (or longer) videos?  My attention span while I'm online does seem to be shorter than when I'm watching TV, but not by much.  We'll definitely see longer videos on YouTube in the future, especially once they get that advertising model in place.

I also expect to see an explosion of custom channels on YouTube.  You'll have channels for every niche imaginable.  That will also lead to more video links being embedded in blogs and other websites.  For example, if there was a good publishing/media channel on YouTube I'd be interested in including a widget-like link to it from my blog.  Again, the advertising model comes into play.  Think of Google's AdSense, but for video.  If you insert a custom channel on your blog, everyone who clicks and watches a video contributes to your income.  I tend to think the click-through rate for that sort of object on the screen would be much, much higher than the click-through rate for the typical AdSense block.

If you're in the TV/video business and you're not working on a strategy to either work with or compete with the Google/YouTube juggernaut, you're kidding yourself.  They're coming and they have all the weapons to be very successful, at your expense.

Sports Illustrated Trash Talks ESPN

If you’re a sports fan you’ll get a kick out of reading Jon Friedman’s article about SI/ESPN on MarketWatch. My favorite quote comes from Terry McDonnell, editor of the Sports Illustrated Group, who says this about ESPN:

They’re a TV network. We’re playing in a completely different league.

Huh? If ever there was a case of someone with their head in the sand, this is it!

Let’s compare the scores on this, OK?:

TV presence: ESPN wins, hands down.

More recognizable personalities: Again, ESPN with the advantage (Reilly and Rushin are great, but how can any team hold a candle to Bill Simmons, Stuart Scott, Chris Berman, etc.?)

Website traffic: According to the article, ESPN holds an almost three to one advantage; makes you wonder what stats McDonnell is looking at, doesn’t it?

Risk-taker mentality: ESPN, again in a landslide. Sure, it leads to mistakes. (Remember the ESPN cell phone?) But it once again shows ESPN is always looking for new and innovative ways to extend their brand.

If you don’t buy into any of those points, how about this one: How many times have you asked one of your friends if they’ve seen the new, hilarious ESPN ad? (My favorite is the latest one with Dale Earnhardt trying to install a screen saver. Btw, why doesn’t ESPN put all these on their website so you can always catch the latest one?!) I’ll bet you’ve never had the same reaction to a Sports Illustrated advertisement…

Digital Cable 2.0…Revisited

A couple of months ago my cable provider (Insight Communications) sent us an announcement regarding their planned upgrade to “digital cable 2.0.” I was thoroughly unimpressed. That was then…this is now.

One of their new features that sounded lame at the time is actually pretty cool. I initially thought the enhancements to the free On Demand TV service were going to feature nothing but shows nobody watched the first time around. I was wrong. After flipping through the menus, I can see plenty of shows and videos I’d like to watch. Here are a couple of other reasons why I’m warming up to it:

Shows from channels that aren’t part of my subscription package. Videos from the NFL Network and a slew of other premium channels are available for on demand viewing. I don’t want to pay for full access to those channels but I’ll gladly watch some of the shows they’re offering for free.

Condensed versions of sporting events. Missed the Colts game on Sunday? No problem. Use this service to watch a version of it that’s compressed into about 15 minutes. The same service is offered for a limited number of hockey games as well.

On a related note, here’s an article in today’s Wall Street Journal (subscription required) talking about how homegrown videos are slowly finding their way from the web to on demand TV services like this. Does it open the door for YouTube to cut deals with all the cable providers? Or do the cable companies try to create their own user-generated content sites? Probably a bit of both.

The YouTube (or any website) interface is a better fit for such breadth and depth of content though – the Insight menu system is clunky and the lag time from when you press “Play” till when the video actually starts is also a drawback vs. a web-based approach. Then there’s the advantage a website has for searchability vs. trying to find a particular video via your TV’s remote control.

Each platform has its strengths and weaknesses, but it will be interesting to see how quickly the YouTube phenomenon migrates to TV.

NHL + Google Video = Smart Move

I’m a huge hockey fan. I was greatly disappointed by the lockout a couple of years ago and even more irritated by the NHL’s subsequent move from ESPN to what was the Outdoor something-or-other network and now goes by some other goofy name.  I’m thrilled to see this recent announcement that the NHL is partnering with Google Video to offer access to (not-quite) live games as well as classic games from their archives.

This is precisely the right next step for a struggling league like the NHL. They need to embrace as many new fans as possible. The announcement says the content will be available for free for the first two weeks of November. Bummer. I predict very few people will want to pay anything for this.  What they really ought to do is offer it free for the entire season, then, based on analysis of traffic levels, repeat visitors and maybe an online survey or two, decide what to do with it next year. By that point I would imagine Google/YouTube will have figured out how best to monetize all those free videos they’re serving up.

Btw, why Google Video and not YouTube?!

The Evolution of YouTube

Perhaps it’s just a coincidence, but ever since Google announced their purchase of YouTube it seems that copyright owners are coming out of the woodwork, forcing YouTube to remove content. Mark Glaser is a good example of one YouTube user who isn’t too happy about the situation. He makes some excellent points about how YouTube has been a great platform for Stephen Colbert, but at the end of the day, if Comedy Central doesn’t enforce their ownership rights it only makes it harder to enforce them in the future.

I’ve said all along that I disagree with Mark Cuban and I think YouTube can be a sustainable business. But, part of achieving sustained success is working with the content owners, not against them. Heck, even if YouTube disappears tomorrow Google can sleep comfortably, knowing (a) they prevented a competitor from making the purchase and (b) it only cost them some pocket change.

Comedy Central (and other) content will undoubtedly disappear for a bit from YouTube. Look for it to reappear with advertisements rolled in. That’s all the content owners really want, a piece of a revenue pie. They can’t be too greedy though; as I’ve also noted before, the online revenue base is going to be much, much smaller than the one they’re used to capturing via cable. Those who opt for greed will disappear from YouTube and never come back. Good luck to those folks as they try to build their own traffic; better to have a small slice of something than to have 100% of nothing.

Timing is critical as well. YouTube can ill afford to lose all the copyrighted content that’s driving so much traffic to their site. It will be interesting to see how quickly YouTube can integrate a pre-roll, post-roll, AdSense or some other advertising model. It will also be fascinating to see how YouTube users react to something more obtrusive than the banner advertising currently in place.