Friday, September 29, 2006
Show Me the MoneyTube
Mark Cuban says: only a moron would buy YouTube.
I think that's vastly overstating the case.
Mark is obviously very good at making old business models a bit more efficient.
The hypothesis behind YouTube is just the opposite: to fundamentally and radically upset media economics and redesign the video value chain.
Is this risky? Vastly. Is YouTube on exactly, totally the right track to do it? No.
Will they probably go a long towards doing so anyways? Yup.
OK. YouTube will be overpriced. And the Facebook kids are pricks. And Yahoo paid way too much for Broadcast.com. And the Mavericks are overrated. Agreed Agreed Agreed.
As a table exercise, imagine someone had devised the perfect Edge company two years ago i.e. post-Google pre-neoBubble. What would it look like? Did someone do it?
Is YouTube so crazy? Maybe. I'd look at that MySpace/Google contract again @ ~2-3 year payback for Fox. Big media hasn't had much of a say in the development of the social internet, but they need to find 'bulk deals' to step into it. Whether those media folks make creative use of that money, ugh.
Think YouTube Community Stats + Google Content-Auction PPC + Neilsen-Style Ratings and you'll get where I'm at. An acquirer will monetize, and my hunch is that there's growing allocation media $s (=revenue) to be negotiated post-acquisition.
Is the video value chain a permutation or subset of the new media value chain? How are they similar and how are they different?