2007/04/12

Google, Youtube, Mark Cuban

Mark Cuban makes a great point: that "Gootube" (as he calls Youtube now that it is owned by Google) is forced to be a free bandwidth video hosting/delivery service, rather than a media company, because due to DMCA they can't monetize the content by putting ads around it. How come nobody else is talking about that fact? That's much more fundamental than whatever content deals or lawsuits they are involved in this week.

Still, I think Cuban is too pessimistic about Gootube. It's not like there's no hope for them, quite the contrary. Consider this: instead of monetizing the content, they can enable the monetization, with two features for the content uploader

1) pay-per-view powered by Google Checkout payment services,

2) ads powered by Google Adsense or whatever video ad solution they have, and again the content owner gets the revenue directly

In both cases, the content owner gets the revenue directly and Gootube makes money on fees, like Ebay. These fees can be just as high as the profits from licensing content and monetizing it themselves like a media company (higher if you believe the "long tail" content has more value than big media properties).

Plus they can truly claim to be just the service provider and therefore not liable for copyright violations.

Now throw in a third feature

3) "Gootube Pro" service with no 10-minute limit, where they charge the content owner for bandwidth, a for-pay mass market video content hosting/delivery service, and they can have all the "big" content too.

Why would they try to beat the media companies at their own game when they they have the infrastructure and technology to play a unique and extremely lucrative role as an enabling platform for mass Internet video, for both user-generated content and mainstream media properties?

When everyone thought search technology was just a commodity piece of a portal, Google succeeded by technological strengths in search. Now with everyone thinking about social media and big media monetization of content, maybe they will go with their strengths as a distributed platform for hosting and delivery of content, payment and advertising services.

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