Nice rant from Bob Lefsetz (very abusive language though, and ad hominem attack) about why Mark Cuban is wrong to question the potential multibillion dollar valuation of YouTube. As Bob puts it:
“this is the Beatles playing some live gig back in ‘65, with no tapes, no backup singers, no additional musicians in the wings, and they WROTE this hit!
Some Beatleologist might be able to tell me the history of this performance. But I’ve never seen it. And viewing it, I’m jetted back forty years to when music was the most important thing on the planet. It’s this power to affect hearts and minds that’s at the heart of YouTube, not copyright infringement.
It’s not like this footage, and that of other performers all over YouTube, was lost, it’s not like the owners didn’t know they had it. They were just too lazy, or too preoccupied, to exploit it. THAT’S what YouTube has done, shown there’s a MARKET!”
That’s all good, and I agree entirely. Markets create economic opportunity. I have written before about how the BBC is never going to be able to amass the resources to annotate is back catalog without enlisting the help of the masses. People, not machines, are often the best mechanism to add metadata to content.
But there is another angle to the emerging world of a million TV stations. Great content is not just for consumers, but business to business interactions too. Successful brands today have to constantly engage the market. Not once a quarter, or when the next big product launches, but every single day. The content has to be rich, and not feel so much like a traditional ad.
Sun and Microsoft have long created broadcast quality comedy-based material to use at conferences and so on. Now IBM is increasingly getting in on the act.
Note IBM has chosen YouTube as a preferred distribution mechanism for its new media efforts.
I have to say me and Cote were fairly blown away when we looked at the email regarding IBM’s latest SOA announcements (which i can’t tell you about yet because we’re under NDA) and saw a link to YouTube!
SOA – The Movie, Indeed.
Its great to see IBM engaging in playful, up the minute marketing. But there is a wider lesson here. YouTube has an opportunity to become the chosen distribution mechanism for a wide range of corporate content designed for customers, and there is always money in that space.
I am not going to bandy around insults to Mr Cuban – after all, he is the billionaire, and I am just a guy that talks about stuff, but I do feel there are plenty of potential revenue models for YouTube.
Its not so long ago people were saying search was a feature. Well maybe it is, but Google has turned that feature into an unbelievable money maker.
Video content is a feature as well. I, for one, would likely invest in YouTube, even if the evaulation seemed high at first glance. The company has the eyeballs, and a business model will surely follow.
“I think that is exactly what Chad Hurley and his co-founders and his financial partners at Sequoia are going to do. None of them need to sell and I think they are all much more eager to figure all of this out the way Google did with search five years ago and reap the much bigger rewards that will come from doing that.”
If you take my thoughts, and Fred’s together- it may be that Google and YouTube will increasingly be in direct competition for advertising spend. I can certainly see YouTube as an ad-supported business, and evidently IBM can too.
Of course, the nature of ads may be changing, but YouTube is arguable closer to what people want from ads (great content) than Google (questionable clicks).
Who ever sent someone else a Google ad link?
Who ever sent someone a YouTube link? One of those scenarios is more viral, isn’t it?
YouTube will likely emerge as a classic Freemium business model. I don’t need to insult Mark to believe that.