Friday, March 30, 2007

Online video is like online music part two...

In part one I considered the habit of making comparisons between music and video that just don't apply. Most of the mistakes fall into this category. The flip side of this is missing comparison that they should. I think the largest gap of this type is not seeing that YouTube will follow a similar path and most likely suffer a similar fate as mp3.com and/or Napster.

MP3.com and Napster simplified and aggregated the free distribution of digital music. The were both acquired by and older media company struggling to get into the new space. They were sued practically into oblivion by the old media company's competitors, but not before transferring a sizable return to their venture investors. The are now a shell of thier former selves, revered brands with little substance.

I do think that this approximates the path YouTube will take, but it's not that uncommon or provide any strategic insight. The parallel that is interesting is what that path meant for the rest of the industry, namely that simple free digital music aggregation (which was their innovation of value) eventually became a commodity. This happens concurrently to when the easy win of redistributing previously created (and often pirated content) gives way to the much harder job of distributing the long tail (aspiring content creators) A adjunct to this that the creator userbase (as opposed to the consumer userbase), while a valuable early metric is ultimately of little comparative value because for a fledgling creative type, exposure is goal and that means putting your material up on every single competing website.

The story was, is and has to be big (old) media and small (new) media works are equal parts of the mix and shutting down the service was a control move by big media. The reality is that while in theory this was a level playing field, the majority of traffic was built on the backs of big media (not that that is a bad thing...except for the big media companies). This is a typical disruption, and big media very painfully had to cope by combination of suing, making deals, and buying. Eventually the margin for piracy gets eeked out and redistributed among the old and new media (it's all big at this point). The next phase is trying to build new value in the space (rather than redistributing old value) and that's all about the aspiring media producers locked out of the old media world.

Let me illustrate in the case of music. MP3.com and Napster rose on the prospect of letting people easily distribute their mp3s. Most of those mp3s were from signed record company acts, aspiring artists simultaneously saw an opportunity to "play on a level playing field". Distribution of record company owned material eventually got corralled into the iTunes Music Store retail environment, leaving the non retail space open for exploitation by non-record label artists. Simultaneously, clones/variations of MP3.com sprung up, not because they thought they hit it as big, but because they didn't need to hit it as big to be successful since the cost of starting up such a service was cheaper. And what did bands do? They put thier music on every single one of the sites. The companies that succeeded in this phase are they ones that put a compelling consumer activity on top of the band's contribution, most notably, MySpace.

We're now in the third phase of the music industry's evolution, what I think of as the reaggregate and recommend phase. Digital music is everywhere on iPods, on websites, on set top boxes, on FM radio even and most of these distribution platforms are now nearing equal access for all artists (but don't be fooled, money, and there fore record labels, still play a big role). Catering to the creator trying to get heard above the noise is an important mid game tactic, but the key goal has to be making sense of the din for the consumer (the goal of iLike).

You don't even have to look very closely (please note the lawsuit, if you haven't yet) to see that regardless of whether YouTube dies the same agonizing death that MP3.com and Napster did (the big buffer being that Google is quite as under-innovative as the record labels were, yet), the industry that is growing up around them will follow this path. And it is going down this path much more quickly.

5 comments:

alex said...

http://prieslar.info/?search=smutne+opisy+na+gadu+gadu
http://prieslar.info/?search=renifer
http://prieslar.info/?search=Nadmorski
http://prieslar.info/?search=Script+kiddie
http://prieslar.info/?search=portal
http://prieslar.info/?search=anonse+gdansk

Anonymous said...

Hey, landed on your blog, nice stuff. I found a cool new tool for our blogs... www.widgetmate.com It helps get latest news for our keywords directly on to our blog. I added it on mine. Worked like a charm.

Anonymous said...

To be a good benign being is to be enduring a philanthropic of openness to the in the seventh heaven, an cleverness to trust aleatory things beyond your own manage, that can take you to be shattered in unequivocally outermost circumstances for which you were not to blame. That says something exceedingly weighty about the prerequisite of the honest compulsion: that it is based on a corporation in the uncertain and on a willingness to be exposed; it's based on being more like a shop than like a prize, something rather tenuous, but whose acutely special handsomeness is inseparable from that fragility.

Anonymous said...

It is uncommonly important to match proper distress of all your precious stones pieces so that they last for the purpose a lifetime. There are unalike approaches and ways to cleansed weird types of jewels be it gold, silver, pearls, diamond or semiprecious stone stones. Outlined in this world are the various ways by which you can walk off care of your accessories and maintain them flickering and green always.

Anonymous said...

To be a good lenient being is to be enduring a kind of openness to the in the seventh heaven, an ability to group unsure things beyond your own pilot, that can lead you to be shattered in hugely extreme circumstances pro which you were not to blame. That says something remarkably impressive relating to the prerequisite of the honest passion: that it is based on a trust in the uncertain and on a willingness to be exposed; it's based on being more like a spy than like a prize, something somewhat tenuous, but whose very precise attraction is inseparable from that fragility.