IPUrbia

Good article on some pending decisions at the FCC.

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I’ve been surprised by how often I’ve ended up blogging about the role of content in the ongoing industry developments. Still, as I watch the industry develop and unfold, the potential impact of new technology developments is only relevant IF it has meaning in the larger context. For voice, that is increasingly meaning integration with other applications and needs (presence, CRM integration, etc…), for video, that is, of course, content. The online video segment used better technology to leverage user-created content to do an end-run around the traditional media monopolies and is now trying to nurse an infant cottage industry into economic viability.

I have taken the stance in previous posts that traditional media is most vulnerable in programming that is closely tied into the social consciousness of their audience–ie MTV–because of the strength of YouTube style forums in creating content that its users feel socially connected to. The first power of user-generated programming is that the end-product is more socially identifiable to us than the overly productized and monetized content of traditional media.

Still, I’m wondering if the power of online video is not as much in the social meaning of user created content, but rather because online video is the more efficient than traditional media. I can sum up the problem of traditional video programming in two words–Nielsen Ratings. Take a simple look at a Digg-style technology versus Nielsen-style “technology” for determining winners and losers in a popularity contents. The simply brutal market efficiency of a Digg-style approach is, in the end, going to deliver better content at a lower cost that, in an open capitalistic market, will win.

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I’d deliberately avoided the adding to the general commentary on Viacom versus YouTube, simply because there is so much of it, and occasionally it doesn’t make it worth my time to add to the noise. Still, the more that I think about the issue, I’m coming down in disagreement with the general consensus that Viacom did something stupid. Viacom’s only stupidity, in my mind, is that they didn’t do it sooner.

Don’t get me wrong–I generally despise traditional media. But, the simple question is “What does Viacom have to gain from allowing YouTube to host their content?” The simple answer is well, possibly a few new viewers–assuming they make the jump from a few John Stewart clips to tuning in to the Daily Show. The other simple question is “What does Viacom have to lose from allowing YouTube to host their content?” The answer is, well, everything.

While Viacom may gain some viewers–even if they gain a lot of viewers–from allowing wider distribution of their content, they also drive traffic to the hosting sites. As people come to YouTube for Colbert clips, they end up clicking on a few “related video” links and discovering a whole wide world of user created content. In the end, they spend more time viewing (and perhaps contributing to) YouTube and less time watching MTV, Comedy Central, etc. The only bad decision on Viacom’s part is allowing their content to remain on YouTube as long as it has, because YouTube has a strong and vibrant enough community today to thrive without Viacom and, perhaps, without any commercial content.

Viacom, it is important to note, is especially threatened by YouTube. While user-generated content may never reach the production quality of Law and Order or 24, most of the Viacom content that makes its way to YouTube–ie the Comedy Central clips–is within the reach of anyone with a reasonable level of skill and video equipment. Indeed, there is already independent content on YouTube that I would say rivals anything available through Viacom in terms of production value. The much greater risk, however, hits closer to the fundamental basis to the success of Comedy Central and MTV; these channels have their greatest appeal to their audience because of their implicit connection to the larger social consciousness. Teens/twenty-somethings tune into MTV to feel a part of something larger than themselves, to have a common identity to talk about with their peers when they congregate. Production levels aside, MTV’s greatest threat is competitive programming that helps its users feel connected to the larger social consciousness.

It is precisely the “connection to the larger social consciousness” that is a fundamental basis of YouTube’s success. YouTube does a much better job of fulfilling that social need than MTV or Comedy Central could ever hope to achieve. Having social experiences around YouTube content is much easier because it is so simple to share, review, and discuss. I also find that YouTube provides better content in terms of connecting to a larger social consciousness. Viacom, try as it might, will never be able to capture the giddy-sophomoric glee of dorm-hall pranks like YouTube does quite naturally or the unexpected connection to the monologues of a stranger halfway around the world.. As strong as a draw as Viacom’s content has been, a quick look at the “most viewed” and “most linked” categories reveals how strong that appeal actually is–over 1/2 the videos in these categories are stupid, amateur, trash (much like MTV and Comedy Central!). However, at least YouTube’s trash is stupid, amateur trash that we better relate to…it is just the type of stupid stuff that we (used to?) love to do.

Viacom’s only real choice–and the route they are smartly taking–is to draw people away from YouTube and onto their own sites. I think that it is too little, too late–for a company that HAS to keep itself aware of what is hip and trendy AND the implications thereof, they have been surprisingly–or perhaps, not so suprisingly–naive about the explosion of online video. Still, they can’t afford to drive traffic to and have their content closely compared to a site that does Viacom better than Viacom.

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Isen had a good writeup on the recent FTC Workshop on Broadband Connectivity, which illustrates well my fundamental dilemma with regulation: a monopolistically-minded industry that provides the basis for a much larger economic sector needs to be watched, but a government that is either increasingly inept, corrupt, or both is not the best mechanism for doing so. Simple question: I think everyone (except for the ILECs and cable companies that only give lip service to the idea) think that more competition is an essential, if not the essential requirement. How do we create more competition in telecom? That, my friends, is the billion dollar question, and one that is difficult in a market where the pointlessness of multiple, citywide infrastructure buildouts make natural monopolies the most economically effecient model. More on this to come in the next few weeks–email me your ideas.

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