YouTube - a lightning rod for new media

Henry Bloget has a blog posting on Seeking Alpha today titled “Is Google’s YouTube Toast? Not Even Close”.  He discusses Viacom’s recent one billion dollar lawsuit against Google/YouTube for having Viacom’s copyrighted content on YouTube.com and the recent pact between News Corp and NBC (read: FOX, NBC, Microsoft, MySpace, etc) to start their own online content site with content directly from the News Corp and NBC networks.  For the sake of this article, I’ll call the new partnership effort FewTube.  Ironically, YouTube would likely sue the partnership for copyright infringement on the name, but thats a whole different issue.

In Blodget’s well stated article, he has several points, some valid, some perhaps not-so-valid.  In the end, his argument is that YouTube will be just fine in the end, that there is plenty of money to go around, and that its unlikely the News Corp/NBC partnership will even be able to get their act together enough to launch a competing site.

One of Blodget’s main arguments is that innovation of the new NewsCorp/NBC site (FewTube.com?) will be stifled due to having so many large players involved that they won’t be able to actually launch anything that will be able to compete.  While I agree with the basic premise that having more stakeholders will complicate things, these are large companies that have a LOT to gain by getting their content up quickly.  If they can get their content up on line, they can control access to it (read: premium memberships for some content), get the ad revenue from the page views and easily upsell each video to a full length episode or something of that nature.   These large media companies would love to have a central site to publish their content on, where they could control their content and not have to license it to someone else, which immediately limits their control and ability to directly interact with the user to try to upsell, promote, etc.  MySpace has enough of a name to pull in a large user base, Microsoft (despite their weaknesses) has the technical prowess to build a large media site, and NBC and News Corp certainly have plenty of content to post.  This project can happen, and it can happen fast if given the green light by the executives.

Another main point of Blodget’s article is that YouTube has a lot of content that is not mainstream which the new uber-media site will not have.  While this will be true initially, I still believe a huge driver for YouTube traffic is content from the large media providers.  Yes, people spend a ton of time on YouTube looking up amateur video, but I’d contend a large portion of those people originally arrive at the site to catch some outtakes of their favorite sitcom, watch clips from Jon Stewart, or see the latest music video.  My point is that without the mainstream media clips, YouTube becomes a depository for mainly amateur video clips which would change the playing field entirely.  At some point, people get tired of browsing through low quality video of people doing stupid things.  If the new partnership site had enough content and allowed people to post their own (perhaps with more profit-sharing than YouTube), content creators would post their content in both places.  The amateur content creator’s goal is to get eyeballs to watch their videos, they don’t particularly care where those eyeballs come from.

I don’t think YouTube is going to disappear anytime soon, but I do believe the FewTube venture between News Corp and NBC could have a giant impact on YouTube’s revenue and traffic over the next few years if they are able to launch a competing project.  I believe it is likely that Viacom could win their lawsuit on the basis that Google is clearly profiting from the pirated material on their site and, despite their claims, they aren’t doing everything in their power to remove it.