According to an MSN Messenger Alert I just received, MSNBC is reporting that Google has indeed bought YouTube for US$1.65B in stock. More details as they come in.
UPDATE: Both TechCrunch and Mashable have confirmed the story at this time.
UPDATE 2: Google has issued a press release.
There’s been a lot of speculation lately about a possible Google buyout of Internet video website YouTube for US$1.6B. A lot has been said about the potential value (or lack thereof) of YouTube and its future success (or demise).
But why, exactly, would Google drop one-and-a-half billion dollars on YouTube? After all, Google already operates a similar service, Google Video, complete with money-making functions such as advertising and pay-per-view/download.
The first obvious answer is market share. According to some estimates, YouTube serves up 60% of the online video market… more than 100 million videos per day. But you’d think with $1.6B Google can boost their own market share (estimated at 10%).
Content would be the other possible answer, but I don’t think YouTube’s collection of user generated content is worth that much, even if you manage to place advertising on them.
Some people have gone as far as suggesting Google simply needs to invest some of their war chest money and somehow came upon YouTube as an acquisition target. If that’s the case, then let me suggest Google should buy lottery tickets instead.
The rest of the theories revolve around Google buying a YouTube to eliminate competition. While a valid point, Google hasn’t normally resorted to gobbling up competitors, usually preferring to buy companies offering services that complement rather than compete with Google.
I like to think Google is a smart company with big plans, so I analyze them with this in mind. Think Big. Think Smart.
Google wants to dominate online video distribution and with it, online video ratings. Without ratings you can’t really sell highly-profitable advertising. And without a majority of distribution market share, you can’t really accurately measure ratings.
Google is allegedly interested in competing with Nielsen in the ratings market and in collaborating with Apple on their upcoming iTV product. I’ve written previously about Google’s potential as a Universal Personal Video Recorder (Tivo on steroids). And just recently Google held a think tank with the top US media executives (YouTube was also present). Something’s definitely cooking.
YouTube offers a quick ticket to this online media distribution empire, because YouTube has the market share but, more importantly, the data.
YouTube has over a year of extensive viewership data, detailing how / where / when and what people like to watch. Make no mistake, this is VERY valuable data. In a country with an estimated 110 million television households, YouTube’s 100 million videos served daily provide a treasure trove of data, ready to be mined, analyzed and monetized.
Buying YouTube would give Google a majority share of the Internet video market, along with the important rating’s data to monetize these videos via Google Ads.
More importantly, owning a majority share of the video market would allow Google to collect and commercialize CREDIBLE ratings data, which it could then share with the major networks and content owners, distribute their videos online, and get a cut of the ad revenue.
A favorite argument of late is that as soon as a big player buys YouTube, said player would be sued into oblivion by copyright holders. While that may hold a grain of truth, YouTube has actively policed the website for copyright violators when alerted by the rightful copyright owner. YouTube has also signed agreements with major players, such as the one recently signed by my good friend Alex Zubillaga of Warner Music, for content distribution and revenue sharing via YouTube.
I believe Google has even better relations with these major players and with credible and comprehensive ratings data to share could easily sign distribution and revenue sharing agreements with them.
All of this won’t certainly come together over night. Too many loose ends need to be tied, agreements need to be made and signed, and technology needs to be put in place. But I can certainly see a road map outlining the steps ahead for Google.
1. The first stage involves the acquisition of YouTube and its integration into Google Video. Agreements with the major networks and content producers will allow the distribution of videos via Google. Most of these players already distribute their videos online for free, so a bigger potential audience combined with ratings data would certainly be appetizing.
2. Stage two would involve integration with services such as Apple’s iTV, allowing viewers to play downloaded content (along with ads) on their televisions. Google could combine viewing history with search history to further finetune the ads displayed.
3. Stage three would allow viewers to record programs on Google’s servers and watch them at a later time. Additionally Google would have the capacity to allow revenue sharing agreements with local network affiliates, according to the viewer’s geographical location.
Of course all this depends on whether Google is indeed interested in taking a shortcut by buying YouTube. And if YouTube is not yet aware of these ramifications, if I were them, I’d certainly start raising the price.
Comments are always welcome. I’d love to discuss these ideas.
UPDATE: Shortly after writing this article, Google did indeed proceed with the purchase of YouTube for US$1.65 Billion in stock… which I actually think is a bargain. Stay tuned for a post-buyout article.
After a summer-long teaser campaign, NBC‘s “Heroes” opened to great ratings and wonderful reviews. I haven’t been this excited for a new series since 24 and Lost first showed up.
According to this recent LA Times article, the networks are spending increasingly higher amounts to produce their new series. High-definition video is more expensive to produce. Marketing campaigns are no longer restricted to their own networks. And successful shows demand much more than just a TV image.
Heroes is a tale of “ordinary people with extraordinary abilities.” Sort of like “X-Men” before they got together under one roof. There’s the cheerleader who can’t get hurt. The single-mom whose reflection in the mirror has a mind of its own. The cop who can hear your thoughts. The Japanese salesman who can bend the space-time continuum…
Heroes offers a great many opportunities for Digital Media Integration. Is NBC taking advantage of them?
Heroes has a magnificent story where, like in Lost, all the characters are somehow connected. The producers have also tried building an off-screen story to accompany the broadcast. It’s in this area of media integration that shows like Heroes can really make a difference. These are some of the things NBC got right:
* Hiro Nakamura (space-time dude) has a blog.
* Claire Bennet (unbreakable cheerleader) has a MySpace profile, as do some of her on-screen friends. (Very interesting, given that MySpace is owned by one of NBC’s rivals).
* If you missed the live episode, you can download it or watch it on NBC’s website. They also have a two-minute replay available.
* Message Boards let you get together with other viewers and some of the show’s producers and explore your wildest conspiracy theories.
* 
Online Comics delve deeper into the storyline.
So NBC is actively expanding the show into the internet, which is great. But they still have a way to go…
Considering the effort NBC has put into this show, it’s sad to see them not taking full advantage of the available opportunities. These are some of the things they either got wrong or didn’t get at all:
* Hiro’s blog is hosted at nbc.com, under a huge NBC logo and navigation banner.
* Hiro’s blog shows a note indicating it’s been translated by Yamagato Software. A Google search for this company comes up empty. A mock website for this company, perhaps with some hidden clues, would’ve been great. (Interestingly enough, there’s a Yamagata company that does translations).
* There’s no online presence for Isaac Méndez, the artist. An online gallery or even a Flickr account should me available with some of his paintings.
* No online mention of Peter Petrelli’s brother political campaign.
* Incomplete website. Even though we’re past the second episode of Heroes (and the lengthy ad campaign), some areas of the official website are still not ready. Try clicking on the Games or Downloads links and you get a “Coming Soon!” message. And if you cheat and enter the urls yourself, you get half-finished placeholder pages.
NBC still has time to fix these problems. The show is young and the audience large. And there’s always the remote possibility that these materials are out there, but still haven’t been discovered or made it to the top of the search results… And user generated content (maps, theories, connections, etc.) will eventually surface.
But this has all been done before, and it’s been done right (see Lost and The Blair Witch Project), so what, exactly, are we waiting for?
I’ll be attending Forbes’ MEET 2006 conference (Media | Electronic Entertainment | Technology) in Beverly Hills. The theme of the October 24-25 conference will be: Reaping Riches in the Media and Entertainment Revolution.
Michael Buffington wrote a very inspiring post about getting into flow and what techniques help him become and remain productive throughout the day.
In this age of multitasking, Digg, YouTube, del.icio.us and so many other sources of information to keep us distracted throughout the day, it’s imperative that we find ways to concentrate on the real important tasks at hand. And judging from the comments on said article, as well as several other blogs, this is a real problem among the internet savvy population.
Discipline plays a big role in entering this flow state, since checking emails as they come in, examining the latest Digg articles, and hopping over to check out the funny YouTube video our colleagues sent, all conspire against achieving the concentration necessary to flow. Of course much of that information we check throughout the day is what keeps us on our technological toes – on the cutting edge of knowledge, so to speak.
But do we really need ALL THAT information? One thing is staying as up-to-date as possible, but it’s an entirely different thing to become practically useless because of our constant need to be “informed.”
In the end, we need to remind ourselves that all those successful people behind the websites we feel the need to check every five minutes are, more than likely, zoned in, worrying about their own gigs. And their success should tell us something.
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.
After several days of server errors, it seems Revision3 is finally live, sporting a brand new and very cool look. Gone is the “Sign Up” page… which is interesting, but more on that later. According to their own About page,
“Revision3 is the first media company that gets it, born from the Internet, on-demand generation. Unlike aggregators, mash-ups, clients and web sites, Revision3 is an actual TV network for the web, creating, producing its own original entertainment and content.“
They also mention that their “content is designed for a new audience. This audience, like television, expects dependability and quality, but unlike television, wants a more gritty, edgy, highly-targeted and in-depth form of entertainment,” and offer to make their shows available on as many platforms and through as many distribution methods as possible.
So far, so good… even the content is entertaining (Ctrl-Alt-Chicken, Diggnation, NotMTV, thebroken, etc…). The quality of the videos is very good and they are available, as promised, in a variety of formats (quicktime, wmv, xvid, theora).
Founded in part by some of the Digg boys, Revision3 is sure to make a lot of noise in the internet television scene. The lack of a sign up page (which was available, though not working, in the previous iteration) really caught my attention. While Revision3 is certainly no YouTube (content is generated by Revision3, not uploaded by users), I was expecting a certain level of personalization, viral marketing and social networking – particularly because of Revision3’s ties to Digg. I’d certainly like to be able to bookmark my favorite shows, share my playlists, see what everyone else thinks about any particular show, see a show’s ratings, and share my favorite shows with my friends. But, hard as I looked, I could not even find any mention of signing up as a regular user. I’d love to know the reasons behind this.
For more on a user-centric, internet TV experience, read Google Media: How Google will change the way you experience music, television and media in general. On that article, I explained what I envisioned Google doing on the internet television front, complete with an interface mock-up of what the user experience could be like. The same concept could apply to Revision3 as well.
Tech wise, Revision3 seems to be running on CherryPy (“a pythonic, object-oriented HTTP framework”) and their Flash video containers are done by BitGravity.
Microsoft has just launched it’s answer to YouTube, called MSN Soapbox.
However, it’s still in a limited by-invite-only beta, so all you’ll see is a dancing butterfly:
So there I was, wide awake in my bed, wondering if the Crestor was keeping me from catching some much needed Zzzzs, when I decided to scramble over to my HP Media Center PC and check what was new on Digg. Over on my number two display, a trusty old 17″ BenQ FP731, my RSS aggregator, KlipFolio, diligently scrolled the latest Digg news. One headline caught my eye:
“How Paris Hilton Can Help Your Web Development (seriously)”
I clicked and waited mere milliseconds for Digg to pop-up on my primary monitor, an awesome Gateway HD FPD2185W. I read the comments on Digg and quickly had Firefox whisking me away to chartreuse’s Beta blog. As the post came up, I decided a late-nite snack was necessary to accompany this mix of marketing savvy and Paris Hilton photos.
Three slices of buttered Holsum whole wheat, crisply toasted in my DeLonghi oven, and a glass of milk would suffice for tonight.
The article is brilliant and shows how Hilton has exploited the attention economy to advance her own career. According to chartreuse, Paris is the queen of links, gratuitously dropping brands, locations and names whenever possible.
Though she hired a publicist to get her on Page 6, she never really talked about herself. She talked about other people. She would mention the designers of her clothes, the club she was going to, who made the sweater for her dog, all without any guarantee of any return. She just threw out links.
It’s gotten to the point where people are using the tactic of rejecting Paris as a marketing tool.
What the article doesn’t go into is how to apply this to your blog (as originally promised in the misleading Digg title). I’m not sure that dropping names on your blog will guarantee you rich marketing campaigns, but everyone knows that cross-linking helps boost where you appear in Google search results. So the best way to do a Paris Hilton on your blog is probably to link to other blogs of interest to your readers or articles and hopefully get some links back in return.
If you pay attention to other bloggers (and your content/banter/mojo is smart), they’ll eventually pay attention to you. Smart comments on popular blogs will also boost your “attentioness” on the Internet. But as usual, the best way is to provide smart, useful content for your readers. Unless you’re Google or Digg or YouTube or Paris and are simply a platform for the sale and promotion of attention.
This article comes to you thanks to WordPress blogs, Dreamhost hosting (use promo code 29OFF for $29 off any hosting plan), the Microsoft Windows XP operating system (at least until I get an Apple MacBook Pro), Sysinternals utilities and the wonderfully elusive CreateShortcut util by Jeff Key.
This is a follow up to my post: Google’s Flickr Killer.
As I’ve already mentioned, a photo organizing and editing tool that runs on your computer (and not over the web) -such as Picasa- is an integral part of the equation. If I could upload straight from Picasa into Flickr, I would use my Flickr account ten times more than I do now. Since I’m using a beta version of Picasa Web Albums, I can upload directly into Google’s own web-based photo storing and sharing service. But, convenient as it is, it’s still no Flickr (or smugmug or photobucket).
These are some of the features which, in my opinion, will permit Google to turn Picasa Web Albums into the next, best Flickr:
The funny thing is, Google has already implemented these ideas in one or many of its services. So, what is taking them so long to tie them together into a killer photo storage and sharing web service?
Do you have more suggestions for Google? Post them in the comments to this article.
And Google, I’m available for hire… in case you want to boost Picasa Web Albums into hyperdrive.
Contact me through this form:
[CONTACT-FORM]