Mark Cuban says Only a moron would buy YouTube

It seems Mark Cuban has no love for video sharing website YouTube. According to this Reuters article, Cuban told a group of advertisers in New York that “anyone who buys YouTube is a moron.”

Cuban, who sold Broadcast.com to Yahoo for several billion dollars back in the dot com era, feels that the potential for lawsuits against a wealthy YouTube owner is too high. He added that “the only reason it hasn’t been sued yet is because there is nobody with big money to sue.”

Though I agree with Cuban about the legal issues surrounding YouTube, I still feel YouTube has a fighting chance.

What I don’t like about YouTube is that since they don’t own a lot of the really good content, any of the big players could simply decide to clone them and keep control of their content. It would certainly cost less than the rumored $1.5Billion YouTube thinks it’s worth. But this doesn’t seem to be the case anyway, as YouTube has been signing distribution deals left and right. Big networks that had at first been put-off by YouTube, have now embraced the easy reach and distribution it has given them. The way I see it, if you can watch a show on TV (or HDTV), you won’t be watching it on YouTube’s poor quality versions. So for big shows (24, Lost, Heroes, etc.), YouTube acts like advertising: you get hooked on YouTube but then watch it on your regular TV/Cable.

As for advertising, Cuban also had harsh words for YouTube, asking advertiser if they really wanted to spend money to reach limited viewers (while at the same time offering opportunities to advertise on his own network, HDNet).

While it’s true that any one video gets fewer viewers than a single television show, it’s also true that it costs much less. What YouTube needs is to leverage their infrastructure to create more flexible advertising schemes.

While no big-time client would like their spots airing on unknown videos, YouTube could certainly create plans for ads to show whenever a video surpases a given number of views. So if a video gets viewed, shared or downloaded more than average, more expensive ads would start showing on them. Additionally YouTube could match certain advertisers with certain shows (so that in a video of Treasure Hunters, you’d still be show ads from MasterCard or Ask.com).

So there are several content distribution and advertising opportunities still to explore on YouTube. It’s up to them to show who the “moron” ultimately is.