Time Warner, big media and video sites

There has been a lot of discussion on the net about TIme Warner’s Dick Parsons comments to the UK Guardian.

I’m not going to guess what they might do, but its a lot of fun to discuss what their and other big media companies options are. Some people play fantasy sports. I like to play Fantasy Business.

There are a ton of different options, Im going to discuss a couple here because its an interesting excercise in understanding business. Some peole like to think that “this time its different”. Its not. Its always about money and control. Thats been the case forever. The only real question is whether you can make more money by giving up control.

Google is a brilliant example of control. They never give it up. They jealously guard everything, from their ranking algorithms to their business metrics and more. They control in detail every aspect of their business. Its not like you see Google giving away their search results to meta search engines for free. Not at all. All traffic comes back to Google.

What google does that again, is completely brilliant, is have complete confidence they can make money on any arbittrage of traffic vs cash. The arbitrage goes like this. Company X, say Myspace, AOL, Dell , etc has been able to generate X$ in cash against Y traffic they have been experiencing. That company wants to generate far more money against that traffic. Google knows they can do a better job than company X at monetizing that traffic. The arb is pretty straight forward at that point. Give company X a magnitude more than that company could generate on their own in cash, and then keep all the excess cash that Google generates on that company’s traffic.

If you go to the non search engine places that create the most traffic outside of Google and buy them or contract for their traffic, you in essence take them out of the search advertising game. THey cant help your competition. You have pre empted a major player. Brilliant.

So the question is whether or not we are seeing the beginning of the same approach with video. The answer to the question has a profound impact on the strategic alternatives a major media company would consider in working with Google/YT. If Google is able to sign licensing deals with the major content providers and basically get carte blanche, we wont sue agreements in exchange for promotional considerations, revenue share and lots of money up front, they win. Now that win could get set aside if a small video hosting company loses a lawsuit that sets a precedent that changes the rules of videohosting. (ie, they have to monitor videos and determine copyright status before a video is posted to the site), but if not, Google, by lining up any deals, regardless of cash involved, that keeps them from getting sued, and allows them to exploit all the video treasures of the major content libraries, wins, hands down.

Which brings us to the options for the major media companies.

1. Take the money, promotion and revenue share.
Most of the analysts out there feel like this is what will happen. That google will be so generous with the cash, along with their fear of “missing out” that the major media companies will not be able to say no. Personally, I think its a mistake to do so. I have a rule that you never turn over a core competency to a 3rd party at any price. Selling your product and advertising in and around your product always has to be a core competency. Sales are the lifeblood of any business. If you turn it over to someone else, you are at the mercy of their ability. Even if they can do a better job than you, you have to figure out how to do a better job than them. It might cost money in the short and medium turn, but it saves your business in the long run. For a major media company the amount of money that might come from Google wont change their fortunes dramatically. HOWEVER, the opportunities that changes in technology and how consumers interact with that technology could change everything, leaving the media company on the outside looking in.

Plus, once its ok for your content to be uploaded , even with guidelines, you have just created a competitor that can repackage your content. You might have limited the length in time of the clips, put in “taste” guidelines , whatever, but you wont be able to limit packaging. So for instance, if Sony does a deal that allows Seinfeld clips up to 30 secs long. That seems innocent enough until the videhost takes the 4k plus Seinfeld clips and creates a Seinfeld page. The Seinfeld page could have Seinfeld polls and contests. The Seinfeld page could hire Jerry Seinfeld himself or for a lot less money, Michael Richards as Kramer, to host video on the now grown to Seinfeld minisite, that talks about his favorite clips. All completely out of the control of the rights holder. The folks at Peekvid.com have put together a very simple example of where this will go. Put some Ad Publishing around it, some video pre or post roll, or even a seperate commercial on the page as many sites are doing, and Peekvid has made some easy money. Any content licensee could easily do the same thing or do both. THe mini site, the index, and who knows what else in order to create new inventory.

The rules on how best to monetize and exploit video have not been written yet. Giving up your core asset to someone who is probably smarter and better prepared than you to exploit the rights of your assets isnt usually a good move. It violates my negotiations rule. When you sit down at the negotiating table to do a deal, you always look for the fool. If you dont see him/her, its you. IN other words. Always assume you are missing something until you are sure you are not.

2. Keep your content exclusively for your own site and let users access and post content from there.
With a few exceptions, all of the major media companies draw millions of users per month to their sites. True, thats not Google or YT traffic, but they arent trivial either. Rather than leaving the door open for Google/YT to let users post away and HOPING that the content identification software they are working on works, why not take control ? Why not slice and dice your own content up in as many ways as you can think of and make it available to all comers to use ? You could limit the clips to whatever size you want. LImit the encoding to whatever quality you want. Its not like you dont have the assets digitized already and couldnt figure out how to do it. I look at it this way. If ESPN can figure out how to pick their 10 plays of the day from all the games being played on any given day, a major media company can hire a bunch of kids out of school to post the fun stuff in huge quantities and make them available for anyone to use. But wait, there is more.

Whats the point of just hosting and posting clips, songs, whatever if the user is just going to take them over to Youtube, AOL Uncut or where ever ? Well its technology fool. You know that these sites use FLV files. You know that FLV supports ALL KIND OF FEATURES. When you offer these encoded goodies, build in the things you need. Offer to pre encode their final product yourself under the value that the Youtube upload process will be sped up considerably

You can even have instructions on your site on how to create mashups and encourage people to do so.

This wont apply to every video that gets posted on Video Hosting sites, but it sure is a nice first step towards taking control of matters. User Generated Video, particularly being able to enhace the video with unique features, to take it beyond kids in front of their webcam or DVcam is just beginning. Personally, i think making it simple to add cool features in front of theupload process could make a difference in where non tech savvy people host the videos they create..

The downside of trying to retain
control of your videos is having to monitor all the 3rd party sites for your content and then sending out take down notices and supoenas. Someone is going to make a nice business out of doing this, but until then its a pain. At least until the law is changed or the video hosting sites lose a lawsuit that results in them having to analyze video for copyrights rather than every copyright owner having to do it.

By retaining control of your own content, there is no question you might lose some eyeballs in the short term. But whats the rush ? The value of a a user watching User GEnerated content with your content has yet to be determined along with just how much traffic any given video will generate. Which makes it tough to do a deal for a library of content. Plus, it has yet to be determined what the competitive impact of preventing a videohosting site from hosting files with your content. Which in composite makes it look early to do any type of deal for a library.

Here is another way to look at it. Google VIdeo, Youtube, AOL Uncut and various other hosts of user generated content have been around for more than a year and have had tens of millions of users each month watching billions of videos. What have all those views translated into econcomically for content owenrs ? THere have been aggregated eyeballs, but what else ? Has there been a FINANCIAL hit for any content owner ? Has anyone actually made money from the content they uploaded ? Has a DVD been sparked to new highs in sales because of clips of uploaded video ? Has a video download been purchased in significant numbers because of uploaded video ? Have TV shows reached new rating highs ? Sure there has been some content that has been seen in numbers greater than those on TV, but so what ? If that video hadnt been available, would anything be different in the universe other than some people missing a giggle at Tucker Carlsons’ expense ? Bottom line, anyone who sat it out so far, hasnt missed a thing. Once there is a model for monetizing and setting parameters of use, and legality, then things could change. Until then, all i can see that we know from videhosting sites is that Users Love Free.

3. Do a cross licensing deal with other content rights owners.
Why not take a page from the big technology company playbook. They cross license patents all the time. Why not do the same with content ? Create a set of parameters that apply to how you think User Generated/Uploaded content should handle copyrighted content. Length, encoding parameters, file size, audio quality, whatever. Then do a cross licensing deal that allows those you let into the group to offer your content from their site within the set parameters and vice versa.

From there, you let each company set the licensing price for their content, but kick back a percentage to a law firm that does nothing but check for your copyrights on hosting sites, and issues the takedowns and supoenas for all those in the cross licensing deal, and possibly even files suit to protect the rights of the copyright owners.

All of the sudden, the leverage is completely upside from where it is now. The videohosting companies will find out very quickly how valuable
user generated content is without access to the biggest content libraries. THe same hosting companies immediately are dealing with the onslaught of legal documents, which in turn impacts their businesses. Advertisers now are completely at the mercy of joe and sally’s creativity without the brands to connect to. Thats going to be harder for them to sell.

Meanwhile, with access to the biggest copyright libraries, each of those companies that partciipate can go to work creating their own user hosting environments and compete on the merits of their products, and more fully enable user creativity with access to the copyrighted content. Your advertising sales forces can maintain control of the products within the set guidelines and leverage their ownership of their content to create better, branded environments for advertisers.

Of course when its all said and done, it will still require unique approaches to monetizing the video , and enabling new user experiences. It remains to be seen whether the traditional media companies, even with some smart new media people at the helm these days will pull it off. But sometimes a good old fashioned revolt, even when it comes from big companies, can make things interesting.

Personally, arguing about business strategy is fun. Its how any business person learns. Watching what the major media companies, and the major online companies do in this space is going to be fascinating.

52 thoughts on “Time Warner, big media and video sites

  1. You\’re right Mark, and its sites like http://www.archaicdinosaurs.com, a site where you can Watch Free Anime shows and Cartoons, thats changing the way people view their entertainment.

    Comment by transduction -

  2. Look at it from the most simplified standpoint: Google wants to buy traffic, buy eyeballs, and buy before a competitor does. Most likely, Youtube was talking to various media companies (i.e. Yahoo, et al), and once a company is in play, they become more attractive. In the same way Google started out as a search engine and then later figured out how to monetize that traffic (through pay-per-click ads), they want to buy Youtube’s traffic and figure out how to monetize it later. Good idea? The right execution? Time will tell. But they had the capital to do it, and this keeps the competition out of the picture. And, looking back at the Myspace acquisition, they wanted to be in on the deal.

    Comment by girls basketball -

  3. Turning something like Youtube into a revenue generating site isn’t that out of the realm of possibility. They could easily sell low dollar “memberships”, or charge for downloading or accessing over a certain number of videos, or charge for a “premium” type membership. Aside for the legal and copyright issues, Google didn’t just fall into the success they’ve had. Not only do they have access to eyeballs, they can turn this into a profit center (or at least not such a cost center) without too much trouble I would think.

    Comment by basketball drills -

  4. Perhaps MSFT will run up..

    Comment by Tony -

  5. If you check 9:31 mark of the 4th quarter, Mavs/Suns game last week, you will see one of many terrible calls.

    Ron Olesiak calls Dampier for 3 seconds, even though Dampier is barely in the paint for 2 seconds. Check the tape if you have it.

    My point is simple. NBA officials, maybe because they have too much to look out for, are now simply assuming calls.

    Why call 3 seconds if you didn’t see a player in the paint for 3 seconds?

    NBA officials are truly holding the game back right now. Casual fans might not care, but diehards notice it.

    Comment by John -

  6. “Some people play fantasy sports. I like to play Fantasy Business.”

    Someone needs to build that site!

    Comment by scott -

  7. The death of physical media is on the horizon. Storage capacity and bandwidth are increasing at rapid paces. Following Kryders law, well probably be able to store up to 200 HD movies on a portable media player in 10 years. Balancing the transition away from physical media is extremely important. Part of the process is experimenting to find out what delivery systems work.

    For big media companies to sell content directly to consumers through their own sites is definitely a step in the right direction. However, they shouldnt miss out on the potential a market leading site like YouTube can offer. YouTube reaches a much wider target audience that can attract advertising. Creating a short term agreement with YouTube to share content is a good way to test this market. Media companies should start by offering products that havent faired as well in the traditional markets or that have run their course. Offer these videos in 4:3 ratio and embed ads for other products. Offer higher quality versions of the videos in wide screen on your own website. Have YouTube advertise these and other products you sell next to your videos. In addition, Google can add advertisements for products used in the videos or anything else they want (maybe similar shows from other media companies or TV ads). Create a new production arm that focuses on producing free videos for online distribution/advertising. If people want free media give it to them. Make this content as cheaply as possible and use it to market your other properties.

    Comment by RL -

  8. Why bother with YouTube? The solution for media companies should be to embrace Apple and its iTunes model. This is a proven model that has worked for the music industry. The music industry has faced the same copyright infringement issues. iTunes has been successful selling music even when it can be illegally downloaded for free.

    YouTube was created for user generated video, it is not modeled on selling commercialized video. Signing deals with YouTube for an unproven model doesnt make sense. Giving away content for free is really going to upset Walmart and Target who depend on DVD sales.

    Comment by Robert -

  9. Here’s another twist … from the NYT on 10/19: “Three of the four major music companies Vivendis Universal Music Group, Sony and Bertelsmanns jointly owned Sony BMG Music Entertainment, and the Warner Music Group each quietly negotiated to take small stakes in YouTube as part of video- and music-licensing deals they struck shortly before the sale, people involved in the talks said yesterday. The music companies collectively stand to receive as much as $50 million from these arrangements, these people said.”

    Now obvisouly, $50 million, or even $100 million, isn’t enough to compensate for the destruction of a multi-billion dollar business. But clearly GoogTube and the content players are working together. That’s pretty refreshing to me.

    Comment by behindthepen -

  10. I don’t really have anything more to add but I have enjoyed reading the frenzy going on surrounding this popular topic of the moment.

    Comment by maddux sports -

  11. Mark, I think you are right in that media giants are attempting to gobble up control of content, broadband, advertising, etc. You name it. The 2000’s are most definitely the bigger is better era. And it just doesn’t apply to the media industry. The largest investment banks/ firms now buy so much volume on the NYSE and DJIA, that the buys and sells of just the top four firms on Wall Street can actually significantly move an individual stock’s price. Goldman Sachs can move markets for some commodities at will by dumping 73% of their unleaded gas position in the GSCI as they did just a couple of months ago. Talk about the need for more regulation and we see it in almost EVERY industry.

    But back to media. Even Google took offense to Verizon’s attempt to gobble up the broadband market and raise access rates, so they decided to build their own broadband network (at least I remember reading that they were buying fiber optic cable and building a “Google”Net to snub Verizon). So in the end, too much control is great for the corporate coffers but terrible for the public. I’d much rather see markets become more regulated to prevent one, two, or three giants from cornering every market out there, whether it’s in media, agriculture, or investing.

    Comment by J.S. -

  12. Mark,

    If you would like to see how a company can make money with video and audio content today, take a look at http://www.videogateway.tv Most companies can’t think outside the box. Most people are stuck in yesterdays model of copyright control, and nobody has enough money to police it all. Furthermore most of the youtube content is meaningless, and most companies have not figured out how to make money with it, not even you tube. Google should have bought http://www.CompExinc.com, the makers of http://www.videogateway.tv

    I met with Jon Bayless, and Jeanne Bayless and Dan Meyer and a few others this week, very nice people. I am sorry I missed your speech for Sevin Rosen Funds, and would have loved to have met you face to face in Dallas. I admire what you have done, and complement you on your focus on HD content and I believe we @ http://www.videogateway.tv have the delivery vehicle to get content out globally. Just an interesting fact, but only about 5% of the total cell phone market is US based. The rest of the world is eager to get content and we can deliver it, to every home, PC, laptop, pocket PC, PDA, or cell phone, anywhere you happen to be in the world, even delver this content in high definition.-aram

    Comment by aram kovach -

  13. Regardless of the implications on this particular issue, the negotiation and intellectual property principles of this post go to show why Cuban is where he is. Right on.


    Comment by Jason Dutt -

  14. Forget the copyright and all the other stuff.
    Once users realize they are getting nothing, zilch, nada out the billions youtube earned, why on earth would they upload their videos? They will look for the next online video rebel.
    This is Google’s Waterloo.
    Remember folks as Ries and Trout said long ago, “The situation is always opposite of what appears in the press.”

    Comment by Sunil Shibad -

  15. Sorry Mr. Cuban this is off Topic, but you HAVE to buy the pirates. If you make a good enough deal then you can get them. It is also good for business because if they start winning then you get money. PLEASE SAVE THE PIRATES. Thank you for your time.

    Comment by Erik F -

  16. @BehindThePen: Don’t think for a minute that Universal Music (remember it was just the music division not the motion picture group) or any other content holder will not sue GooTube if their expectations or requirements are not met (e.g. this “automated music id system” fails to live up to it’s billing). A deal does not preclude any other future actions.

    Comment by Chris D -

  17. pay attention people. Googtube signed a licensing deal with Universal already … Universal is suing smaller competitors to youtube that didn’t sign the deal. This is the EXACT OPPOSITE of what Mark was predicting … Universal (and CBS, Warner Music and SonyBMG) is helping create MONOPOLY STATUS for Youtube!

    Comment by behindthepen -

  18. Hey Mark:
    Don’t ever change. I envy you for being the fan that you are. I wish my Celtic owners showed the same passion, sometimes I think their taking a nap over there on the sideline 🙂

    Comment by Jason -

  19. Lovely to see someone with both understanding and passion get to the point.

    “Offer to pre encode their final product yourself under the value that the Youtube upload process will be sped up considerably” – sure.

    I will make a service where i transcripts the voice on the video (speachtech or in india) and put Addwords on it. I bet Google is far with it – and it makes sence in all kind of broadcasting. When you click the Adwords – you either Pause or get it next to the Video.

    I enjoy this blog – even though you write to long.

    Comment by Morten Lund -

  20. Google is the most amazing web property on the Internet. They are the Mark Cuban of the web world, no 🙂

    Comment by Sam @ MindSmack.com - Web Design -

  21. Mark, watching the preseaon game right now…I don’t know if this is going to happen in the regular season, but please don’t break up the chemistry between Mark and Bob that we all know and love by adding a third. I am positive the majority of Mavs fans would agree with me.

    Comment by Paul -

  22. There is an article at news.com.com titled “Universal Music sues two video-sharing sites”, and it all looks like media companies are “warming up” on small infringers creating a legal precedent, as Mark mentioned was likely. Will this snowball into something bigger?…

    PS: the link to the article is http://news.com.com/Universal+Music+sues+two+video-sharing+sites/2100-1030_3-6126697.html?tag=nefd.top

    Comment by serge kosinov -

  23. Universal Music sues two online video sites !!!!!!!!!!

    You are a geanius Mark, said and happened. Great fantasy bussines player.

    Comment by Ilan -

  24. The BILLION dollar question: Can you make more money by giving up control of your content?

    Already if you drill deep into Google Video you will find clips that are priced from $0.99 to $19.99 or thereabouts for full movies. The standard fare rev share according to the submission agreement is 70% publisher 30% Google. Fair enough. I doubt many of the submissions of amateur quality are being paid for though.

    Now if you consider the You Tube universe and the content that manages to find its way up there, for free, the rev share will shift to ad revenue. Much of this will come from CPC and CPA but it is likely to start amounting to something meaningful for some contributors. Money for nothing and your flicks for free.

    Will people be able to make careers out of it? Time will tell but I suspect that yes, the clever ones will but only those that can attract consistently large audiences. Same old story, just a new medium.

    But what about all that footage that is sitting on the shelf? Old movies, stuff that never made the box office, and what about all the stuff that is mashed up and reedited? There is definitely a force to be reckoned with here in the entertainment business but they have not come to the party with the solution, just the money to figure out the answer. I think that the evolution here will be to a full blown channel with every conceivable video element available with every currency accepted from viewers attention to cash. The networks are going to learn a lesson or two about the entertainment business in the next few years but so will Google no doubt.

    As you point out, monetization is going to be equally important and brand advertisers are reluctant to associate with irrelevant or questionable content but again, this is where Google can really perform. Rich media ad formats will no doubt continue to compete for relevance and measurable responses but we are looking at an ad inventory that is almost endless.

    And then, the challenge. Copyright. Success depends entirely on managing the claims that are going to compete for the prizes and there will no doubt be many. So many in fact that I suspect that much of the old standard will be rewritten over time. You will always have two forces in the battle, consumer response and monetization. I agree with others that trying to police copyright issues is senseless but an almost certain probability.

    Cross licensing would be messy and burdensome. Not a likely probability. The key to growth and, should I mention the word profitability… is going to be automation and ease of use. If you ever have to get a lawyer involved, automation becomes extinct. Audience policing will no doubt come into play along with consumer rating. Also, if Google were to represent any position with regard to eligibility they might themselves become a party to potential liability.

    One thing you can say for Google is, they do have the bandwidth.

    Comment by Peter Lloyd -

  25. You were right! See the news on Universal vs. Grouper and Bolt.com below. This could be the first test of copyright law before they start hitting Youtube.



    NEW YORK, Oct 17 (Reuters) – Universal Music Group said on Tuesday it filed lawsuits against online video sharing sites Grouper and Bolt.com for allowing users to swap pirated versions of its musicians’ videos.

    Universal, whose artists include U2, Mary J Blige and Mariah Carey, said it is seeking damages up to as much as $150,000 for each incident of copyright infringement plus costs. It estimated that thousands of music videos were being viewed on both sites, to their benefit alone.

    “Grouper and Bolt… cannot reasonably expect to build their business on the backs of our content and the hard work of our artists and songwriters without permission and without compensating the content creators,” a Universal spokesman said.

    Comment by Mark Z. -

  26. I think Cuban nails an important issue implicitly. There are only two broad funtions in a business:

    * To innovate, by creating new interesting products and services, and
    * To market, by creating customers for those services.

    The media companies that choose option one, licensing to Google, are in effect, delegating the two functions of a business to an adversary, or at least a company with its own agenda. Perhaps a generous interpretation would be that they are delegating only 1.5 functions because they are still creating original content, but not necessarily in an innovative way.

    More on the disruption of mainstream media:

    Comment by Michael Urlocker -

  27. Mark,

    Not sure if you have seen this already but Wharton School have selected your post “The Coming Dramatic Decline of YouTube” under special Editor’s Picks section at
    Pretty cool, don’t you think? Wharton site has over a million subscribers.

    Comment by Manny -

  28. Mark,
    What’s going to happen with the YHOO tommarow?
    Are you aligned with the masses that lost all their money in 2001?
    Nowitzky from half court… nothing but net.

    Comment by matt -

  29. Mark,

    I just wanted to congratulate you on being mentioned in one of my favorite magazines, The Economist, this past week. All of your great blog entries on YouTube/Google made an impression on the Economist writers and your opinions were discussed in the article. I’m sure you have already read it, but if you haven’t you should pick up a copy and check it out. Thanks for voicing yourself…your business insight is wonderful to read.

    Best regards,
    Matthew J

    Comment by Matthew J -

  30. This doesn’t pertain to Mr. Cuban’s remarks in any way but does anyone know if the Mavs offer any tickets for military personnel at a discount? I’ll be in Dallas for one night with some members of my navy squadron and would love to catch a real NBA team. I’m stuck with the Celtics otherwise. Dave

    Comment by Dave Dermody -

  31. Judd. ZING. Good fucking post.

    Comment by blyx -

  32. Everyday Negroponte’s “Daily Me” gets one step closer. The written word came pretty quickly and was easier to administer. Audio came next and retail distribution companies hit the scrap heap. The broadcast component is now snapping into place.

    The constant battle of hacks to keep the river flowing and tolls to keep the road paved never ends. Every code can be hacked(but it costs time). Do I spend my time with YouTube open picking out songs at my hourly rate or do I just let the daily me drop in by itself with the advertisement(toll). Google correctly understands that time is more valuable than money. The 15 minutes of my time is worth more than the 30 seconds of advertising toll. And if the toll has intelligent targeting, the trade for my time is even less as I enjoy the ad. The ad pays the content providers the cut they need to keep the lawyers at bay. It also provides a platform for content providers that will trade their content for fame/relevancy as Sting did in a reverse marketing power play with Jaguar. As a consumer, if I really like something and I want to collect the content without the toll, I go to a “pure content site” and pay the permanent toll with cash.

    The muvee post is pretty close but it is the advertisement not the content that counts. Google will likely extend the AdSense programs to the broadcast format. They may also begin to build competency in directing and advising the advertising placements themselves.

    Content is a finicky business. Advertising is not. I doubt that Google has much interest in the content business. The margins are not what they used to be and managing artists is not really their forte. They want the toll.

    Last week I think Google painted a great big target on the back of the media divisions of Omnicom, WPP, Publicis, and Interpublic. Google is playing for keeps, good luck guys.

    Comment by Judd D. Bradbury -

  33. What about option #4? License the technology/process from the market leader?
    We all know that the reason for YouTube’s success is their simple UI, for uploading, finding and sharing content. None of the big media companies are anywhere close to what they provide.
    Why not use the technology that has already won in the marketplace, but make sure that you control the presentation of your content and the advertising associated with it?

    Comment by behindthepen -

  34. “Personally, i think making it simple to add cool features in front of theupload process could make a difference in where non tech savvy people host the videos they create”.

    Absolutely agree with you Mark – check out

    …this is ‘uber’ cool IMHO*.

    *(“no”..I’m not an employee or an investor in this company)…

    Comment by Matthew_in_Singapore -

  35. You are making Google sound like the WalMart of the interweb. If the Goog buys up all the competition what is left? This viewpoint sounds like anti-trust.

    Comment by Colin -

  36. To Jame King:
    it is absolutely true that Mark is on of the reasons why this issue at the forefront. Most major biz publications such as “The Economist” quote him when discussing the issue.http://www.economist.com/business/displaystory.cfm?story_id=8031159

    Comment by Tim A. (LA kid) -

  37. Mark, users don’t just like free. They like convenient. Click, search term, enter, click, click, watch.

    Further research should be done to ascertain which of the viewers of rich media would be willing to pay for it, if it was more convenient and held more content.

    I’m going to float out the obvious knee-jerk assumption that kiddies probably do not have the resources or clout with the family budget to make consistent and long term entertainment purchases because they are constrained by the number of family members, the disposable income of the family unit, credit card validation routines that attempt to sniff out usage by children.

    PS, are you going to talk about the Mavs or pay Josh Howard anytime soon? I’m getting tired of him making comparisons to Tayshaun Prince. Tay’s got a ring, and the ring, well that’s everything…

    Comment by Anand -

  38. To Gerry:

    Those deals with record labels mean nothing.

    I work in marketing music and promo videos are made to be seen, not sold.

    They are essentially 3 minute advertisements and labels over the years have, ironically, spent fortunes getting them a-listed on MTV or onto big audience channels…

    Given a choice between the videos gathering dust on a shelf and google offering to take them off their hands + a chance of some revenue. It’s a no brainer.

    However, it will be interesting to see how that revenue, if any, will be shared. Artists are usually billed by the record label for the making of those videos. It comes under marketing/promotion. But that’s another story. The jury is still out on whether gootube can make this model work and actually make some money.

    So, don’t get excited about those name-droppable deals. They don’t mean much in the, ahem, bigger picture.

    The music industry doesn’t do moving pictures…the moving pictures industry does and it’s worth mentioning in the same breath, that, unlike music, there is no blanket online license for film/tv content. Each video has to be licensed, pretty much, individually.

    Comment by eff_gee -

  39. Google is already well on their way to licensing a lot of the copyrighted content..


    Comment by Gerry -

  40. i work with major advertising agencies full time.

    the agencies are all getting asked by their clients for a “big idea” in the ‘user generated’ video space ..something that doesnt cost much, gets max exposure, and extends the brand “essence”.

    Problem is the downside – how their products/brands are going to be used/abused by end users, plus the videos on either side of their billion dollar brands.

    much safer and easier to buy a commercial slot in “Grey’s Anatomy” and reach 30 millon viewers in a controlled environment, preferably in high definition.

    Comment by karl meisenbach -

  41. Crazyglues does sort of have a point. Free, illegal ways of doing things will always be available no matter what the big media companies do to try to stop it. The free movement on the ‘net is too large of group to stop… you see companies like Microsoft trying to sue everyone who uses a pirated version of Windows. Their efforts are in vain, and it’s sad how they just don’t see how things really are. The hacker community is one step ahead, and they always will be.

    Now obviously Microsoft is doing this because their sales are pretty much saturated so they need to find ways to keep growing and make more momey.

    Instead of trying to control their content, (the music industry serves as a better example here) music companies need to find ways to make their content more valuable to users. Use file-sharing as a promotional tool to get fan turn-out for concerts or other venues or stop making it hard for users to rip CDs and encourage sharing between friends. Make your content more valuable to users.

    So back to online video… if the media companies can compromise with copyright issues and sign deals with GooTube that don’t hamper the video’s value to users, they’ll having a winning recipe. It’s all about value to users, and free is the only choice or users will just continue to get their content through file-sharing and other illegal means. It’s just too easy.

    Comment by James Stevens -

  42. If someone truly wants to control content they have to examine costs of doing it. ie technology, legal,etc. I think we will get the answer for that when I call my home country a week after Vista release and ask if pirate version runs 100% similar to original version, like XP does now. Than everyone can shut up about content debate even if software doesn’t qualify as content. Because if a developers can’t protect that product, than music and video is doomed, because there will be 10000+ individuals willing to administer technology to illegally copy and distribute content. Even now can get any movie or music free on the internet through shareware. I know it is illegal, but it works and only less convenient than 99 cent apple store. And if you want 100 songs at the time and most people I know with ipods have thousands of them and I don’t think they spend somehow 5G on music in last couple of years. Buying textbooks and paying rent is already quite a big stretch. So the content debate is about distribution, not full control. For advertisers TV audience doesn’t grow, less and less people are going to the movies. The costs of content development are going up. The only real growth area is Internet, which now needs to be monetize. But as long as Google shares are above 400, nobody can sue them, because they(people who want to sue them) don’t have free money. Of course they can play a game and try to get one small ruling etc than another, but it is fools game. No Big Media firm will spend 10 million and more to sue for content. I believe it will be much more. Because as content control is your core competency so is googles ability to sustain their traffic and now that they own Youtube I dont think they will be happy if someone is messing with their traffic through take down notices and other legal BS. Big Media are prepared to sue me and you just to scare us. But I don’t think anyone is prepared to sue Google. Yes one can try to send take down notice, but probably every 5th video on Youtube has copyrighted content in it. One can sue Big on Small, meaning big company doesn’t like what small individual or small company are doing. Small on Big. Small company, individual or group of law firms will sue Big Company, due to survival or profits. SMALL on SMALL 2 companies which are crazy and finally government agencies on anyone, but rarely BIG on BIG, because it costs a lot of money and this money are in form of checks not in fantasy kick backs or future profit share agreements. Why mark you didn’t subpoena the guy who posted your movie on google??? Because it costs and it is bad public rep. Big Cuban takes down poor dude who wanted the world to know how bad corporations are. The way I see it Google as well might sue you first, because law as it is now doesn’t carry any moral or public support. I buy CD, use music in my home made video, post it online and I can’t do that. Spent 10 mil on this issue in the courts and we will have a new law. And as long as Google doesn’t broadcast full length feature films in DVD quality I don’t think sentiment will change. And you can point the finger in the law book, but it is America, Mark. Country, where the green stuff is the king. Throw enough of it on the justice table and you can get anything. So relax and talk about Mavericks and don’t be stupid. Posting the link to the google video lost you at least 10g in revenue, because it was a popular movie and many people heard about it and wanted to see it and when Mark implied that it is going to be available free online for another 24 hours. Man, every self respected dont have anything to do student who hasnt watch before watch it online. I know 10g might be not a big deal for you, but it is still lost revenue and not your own money. So I think your company should sue you for advertising how to get movie for free on Google. Also Google guys had probably a lot of fun seeing how traffic skyrocketed for feature presentation promoted by Mark. Consesus on the movie that it sucked and that companies still using the similar techniques to show financial results favorable to Wall Street. I don’t think it is bad or anything, it just that corporate accounting is extremely complex and there are logical principles under these techniques. Especially if company doing extremely well most likely than not it will under report in order to hedge against bad times. Sorry for watching, but I already paid for the book that it was based on.

    Comment by Tim A. (LA kid) -

  43. Mark, quick clarification –
    I don’t really know what you mean about Google exerting control over search results – they are easily scraped and posted elsewhere, especially if you use the Google APIs. There are plenty of books and websites out there that catalog interesting and sometimes useful Google Hacks for search results.

    However, I do agree that they tightly guard information regarding algorithms and business practices.

    Comment by Shane -

  44. Mark, you seem quite obsessed with Google lately. Seems to me your a quite envious of all this and are a little pissed you didn’t think of it yourself.

    Comment by Brandon -

  45. Crazyglues, this isn’t about what the user will do. As Mark said, “Users Love Free”. But content owners will want to get something out of it, and so they can either yell at Google for everything, strike a deal for ad revenue, or start taking advantage of the content by optimizing it. Put in your own advertisement right into the video and not let it be taken out. Mark isn’t saying that the copyright issues need fixing, but that if Google YouTube is always free and escapes copyright issues. He proposes that content owners can work together to EFFECTIVELY prevent use of their content without adequate recompense.

    Why would Mark need to say what the user wants? It’s OBVIOUS what the user wants–we’re all users. He is not complaining about copyright violation either. Google doesn’t need to put in a donation box on every page, letting the content owners rely on user love, they have the ads to just make money for everyone. The copyright issue isn’t dead because owners can make some money off of it, but Mark knows there are better ways for the content owners to benefit. Correct me if I misunderstood, Mark.

    Comment by Shan -

  46. I found another article that proves you weren’t quite so wrong, Mark.


    Comment by Rebeccalee Coventry -

  47. @Bittorrent
    “PeekVid is breaking the terms and conditions for Google Adsense. The terms say ads can’t be placed on pages that have video (unless that video is 100% owned or all rights are cleared by the site owner).”

    Google might ingore the copyright issue for sites that generate lot of revenue.
    That site must be having a adsense premium account.

    Anyways, do you think Google will check copyright for very video on site ?

    Or google will just bann that site ?

    Comment by Cool Dude !! -

  48. typo- that should be I didn’t explain that right, sorry i’m falling asleep over here.. goodnight.

    Comment by Crazyglues -

  49. Rob La Gesse, I dont I explained that right, no one cares about the copyright issue from the consumers prospective. For example I buy a CD that I decided to use in the background of my video blog, or some music I purchased from itunes.

    The last thing anybody is thinking about when they upload a video is, I wonder if this is copyright infringement because I used that music I purchased from itunes music store in the back ground of my video blog.

    Rob Im not fighting the copyright laws Ime just saying suing people like the R.I.A.A is doing is not the answer to solving the copyright issues. Biting the hand that feeds you just doesnt make much sense to me.

    I would love to see a video upload site that could show the importance of why its important to pay for the content. A site that would allow people to get paid for their video uploads. Think Youtube, but with a paypal system incorporated into the website design. So people would be able to donate a dollar or even 3 dollars to a video up loader, as long as they dont use any copyrighted material and follow the structure of the site. I think this would show people why its important to pay for things in a way.

    When you create a video and try to get people to like it and donate to you, it brings home the whole concept of supporting an artists music or a movie. When you see what it takes to actually make content good enough to receive donations.

    So no Im not advocating giving your content away for free, Im just saying can we not get crazy with over doing it on the copyright issue. Like is it ok if I give away a CD I bought. Is it ok if I make a copy and give it to my friend because that use to be fine but then the record companies started saying, oh no thats not ok?

    If I buy a copy of Windows XP and install it on my computer, and a month later my computer explodes or is burns in a fire can I give that disk to my friend for his computer, or can I now sell that CD on eBay, since its a code no longer being used or is that Wrong? I just feel like I paid for it, so shouldnt it be mine. Or is it still Microsofts.

    Comment by Crazyglues -

  50. PeekVid is breaking the terms and conditions for Google Adsense. The terms say ads can’t be placed on pages that have video (unless that video is 100% owned or all rights are cleared by the site owner).

    Comment by Bittorrent -

  51. Crazyglue: Uh, ok dude. Nobody cares about copyright except the owners. Right. And their lawyers, and the law, and the Congress they fund. Nobody cares? No – not true. You don’t, it’s obvious. Is it because you haven’t created anything of value? If you have, give it to me, for free. That is what you are advocating.

    Mark – good post. It’s a shame that the industry seems to only be able to work together when they pool resources to sue 12 year old girls – yet they let the YouTubes of the world rape their content. Doesn’t makes sense to me.

    If I were big media I would also pool money and hire Lobbyists and get the “Safe Harbour” law overturned.

    Comment by Rob La Gesse -

  52. You know what I find fascinating, you seem to be missing one important fact in your assessment of this whole video uploading phenomenon. No one and I mean No one cares about the copyright issues. This is probably why you just dont get this.

    No-one but the Copyright holders are concerned about someone using a clip of music that is not authorized for use in your home video clip that you uploaded to Youtube This is the thing that seems to keep going completely over your head. Its the same thing the music companies didnt understand about the new free world.

    I like this discussion because to me its just like the days of Napster and it shows how little big companies and rich millionaires have learned about the free world. Your job is to control everything its how you make money, so if it was up to you. You would tell me when and how I could play my Music CD, what Im allowed to do with the CD I bought. You want to tell me if Im allowed to give a copy to my friend, if I can put it on my ipod or not.

    Whats really funny is when the CD price went to $18.95 there was no Mark Cuban there saying oh this is crazy they need to fix this, something needs to be done. But as soon as the little guy gets a chance to turn the tables on the Music companies and download stuff they would have paid for before but now get for free. Here comes Mark Cuban talking about how unfair it is and how copyright laws are just being violated. Ha ha…

    Thats what started this whole war, people are tired Mark, they are tired of being controlled by your little copyright vision of how the world should work. Instead of looking at how the world really is working, Music companies took a huge hit when they didnt understand people just wanted a way to get there music online. Too busy fighting the war, to realize that the war was pointless. Not to mention totally unnecessary.

    You want music online, ok here is Apple itunes, you mean to tell me the huge music companies couldnt figure that out, I mean you needed apple computer to come alone and show you how to make music available online in a way that people will be willing to pay for it. (Well why bring that up you say? Ok good point, I bring it up because its the same thing with videos mark.)

    Do a cross licensing deal with other content rights owners? Uhhh NO
    Are you serious, your controlling me again, I mean I dont care about the content rights and no one else does either, do you really think Im going to track down some copyright owner of the music so I can get it approved first before I upload my video of me blowing boogers out my nose with Aerosmith in the background. LOL Good luck with that. The second I have to jump throw all those hoops I just go to the john doe video uploading site down the block that lets me upload whatever I want.

    Mark Im 34 and I grew up in the time of Napster and in fact I was going to college at the time when Napster became the huge music force that would change how we looked at music forever. Today that same thing is happening to Movies and software. Trust me when I tell you the war is over, the free world is here to stay, most of everything I would buy I can find on the net for free. Thats a serious problem.

    For a second I thought you where really on to something when you talked about doing your own video uploading site and going at the big dogs and showing people why its important to respect copyrights by making a service that would allow people to get paid for there user generated content.(As long as they didnt infringe on copyrights by using material they didnt create or have permission to use.) I said wow he is really going to change the net and make one of the biggest sites to change the net forever.

    But today I see that once again I guess you just dont get it. And well someone else will. Maybe even Google will build a better mouse trap with Youtube, with time. Lets just wait and see what they do. They might just surprise you. Even if they dont there will always be someone as long as theres money to be made. I could go on but I think this is already too long of a comment… Its just such a good discussion.

    Comment by Crazyglues -

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