Tuesday, December 30, 2008

Shot In The Dark

The current fallout between Universal and YouTube shows how bad the 'Google Gap' really is. The revenues generated by Internet TV in no way compare to those generated by traditional TV and traditional media is getting antsy. So, why is this ?

Well, first of all, traditional TV had ubiquity and therefore a currency that will not be matched by any medium ever again. Traditional TV used this to build a hugely dubious metrics system that inflated its relative worth and maintained an aura that is only now finally fading.

The internet delivers true metrics, so this is always going to be at a disadvantage to the obfuscated data that traditional TV works from.

The cost of delivery for Internet TV is higher - there is an incremental cost per viewer that does not exist with traditional TV.

The cost of entry to traditional TV was high, so players tended to work through their business models beforehand. There has been a tendency in the Internet TV world to not worry about business models. Indeed, the subsidies being thrown into the market from everyone from YouTube to the likes of Brightcove have distorted the market. Whilst providing a valuable social service is one thing, this model has actually worked almost in reverse to the long tail principles that prevail online.

The single best thing that could happen to television is for YouTube to start charging its uploaders. This is the model that Google Video has introduced, so why not extend this, especially in a market where ad bucks are becoming rarer than hen's teeth.

There isn't a single online video service that has been able to extend a revenue generating business model to content owners yet, so why not throw the onus back onto the content owners themselves - or to other middlemen who can use the content and the technology available to generate businesses - just like the cinema and TV did in the past..

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