This is the news: the media giants (NBC Universal and News Corp.) made a deal with AOL, MSN, MySpace And Yahoo!, in order to create a video site that will be a competitor to YouTube. It will be, as the press release says, “launch the largest Internet video distribution network ever assembled“, and it will debut “this summer“.
This is what they will offer: “At launch, full episodes and clips from current hit shows, including Heroes, 24, House, My Name Is Earl, Saturday Night Live, Friday Night Lights, The Riches, 30 Rock, The Simpsons, The Tonight Show, Prison Break, Are You Smarter than a 5th Grader and Top Chef, plus hits from the studios’ vast television libraries, will be available free, on an ad-supported basis, within a rich consumer experience featuring personalized video playlists, mashups, online communities and video search. Plus, the extensive programming lineup will include fan favorite films like Borat, Little Miss Sunshine, Devil Wears Prada, The Bourne Identity and Bourne Supremacy with bonus materials and movie trailers. Post-launch, plans will be considered for acquiring additional content as well as producing and licensing original programming for the new site’s audience.”
And this is how it will end: I see two possible scenarios.
a) The corporate monster will offer the real deal. That is, entire episodes, entire TV shows (especially older ones), free movies. When they say we’ll be able to watch My Name is Earl, that won’t mean the first episode plus trailers for the other ones, it will mean, for example, the entire 1st season. It will all be littered with ads, but it will mean that the corporate heads are really embracing (or are forced into it, whichever) the ad-based business model. They will give out a solid portion of their content, and try to make money on the ads. In this case, Google’s YouTube will suffer and possibly even lose its dominance in the long run.
I consider this option to be less likely.
b) The other option, is that the corporate monster won’t offer the real deal. They’ll try to give and not give at the same time. They’ll offer teasers, trailers, and little chunks of your favorite TV shows which will only leave you begging for more. What little content they do give out, they will litter with unbearable ads, which we won’t be able to skip. They probably won’t even give the users the possibility to upload their stuff. The people will realize that what they offer is crap and they will go back to YouTube.
I consider this option to be far more likely to happen.
What’s your opinion?
Option B for sure.
Remember this site will be run with a corporate mindset rather than a thinking system to expand user base in the long run.
The first thing on their mind is the bottom line and that’s where they will fail, unless they think outside the box.
@Ali: I was just trying to remember, are there ANY corporate monster sites like these that are actually successful? I mean, within similar circumstances? I can’t remember any. I guess iTunes comes close, but Apple scored a lot of points on iPod being good and their brand being cool.
Nope I can’t think of any as well, except for MySpace which was already on its way to stardom before News Corp. bought it
Iif you just read the minutes that arrington got from the conference call you can make out it will blow { as in suck }.
Although they said user generated content will be there but I guess that will just be a sidekick service and nothing to compete with YouTube’s loyal userbase.
Just like you said in Option B.
@Ali: well, one should never underestimate the power of money. They’re going to use the old carrot and stick technique, with stick being lawsuits, and carrot being free content. Now, I just know the carrot is going to be rotten, but they can at least try to wrap it up in nice shiny paper. Maybe it works, although I doubt it.
Stan,
Another thoughtful article. Along with Walt Mossberg’s article in the WSJ yesterday, and Arrington’s blow-by-blow of the press conference, you point to the fact that the clever people at the networks have found a way to shoot themselves in the foot with the consumer, following the example of their friends at the record labels.
What they’re really trying to do is hold on to their ad-based model by extending it into the digital realm, using the “killer app” they announced at the conference call: a universal DRM player. The portal seemed secondary. It’s like forcing you to watch network TV wherever you go. Slingbox alone kills that.
The ad-based model worked for radio and TV because of audience measurement. But in a digital world, it’s been really hard to tell if we watch the ads, unless we click on them. My favorite advertising quote still applies, “50% of my advertising dollars are wasted. Problem is, I’m not sure which 50%.”
@David: honestly, after that press conference, I know even less about the service than before. But, knowing how corporations think, I bet they won’t be giving much for free, and they won’t be fully embracing the ad-supported business model. As you say, TV ads are not the same as online ads. I’m sure they’ll think about doing the right things, but then some suit will realize they’re “losing control over their content” and they will do everything only half-way in the end. And it will result in a flop.
But, who knows, maybe the old dog can learn new tricks after all?
Hey Stan,
Good article…I see a real *possibility* for big media to embrace option A. Whether or not they actually do is another story. I do see Microsoft at the center of this endeavor (the Soapbox host site, the “universal drm” player, etc). Ballmer, Gates, and crew have made it clear to Hollywood for years that they’re their ally and will make sure users (customers) pay. Google and YouTube are the perfect common adversary for MS and the MSM. If they knew what was good for them they actually would embrace option A.
We shall see….
Best,
Chris “Spinchange” Duffy
@Chris: history has repeatedly shown that big corporations rarely take this option. They’re focused on money, and giving stuff for free always seems like the wrong option to them.