The dismal failure of Viacom’s YouTube strategy

According to data provided to me by Hitwise, Viacom’s Comedy Central and MTV websites have lost market share since the company ordered YouTube to pull copyrighted videos from the popular online video aggregator in February. This despite clear statements by Viacom that YouTube was standing in the way of its ability to make money from its content on its own sites.

Viacom assumed the traditional model of scarcity would reward their strong arm tactics against YouTube, but it hasn’t, and it won’t, because Viacom — like so many other mainstream media companies — can’t see beyond the traditional economic walls that surround its empire. Abundant micro-media is killing (or already has killed) the old model, and it shows no signs of letting up. You only need to consider that while traffic to has gone down 11% since February, and has seen a 14% traffic loss, traffic to YouTube has gone up an amazing 39% during the same period.

In March, Viacom CEO Philippe Dauman told shareholders, “Our content was a substantial part of the traffic on (YouTube). We are very pleased to have more traffic on our sites since we took down our video from YouTube because we are able to monetize that as opposed to someone else doing so.” Apparently not.

Moreover — and this is truly amazing — during the same period, YouTube has been providing a steadily increasing amount of traffic to those two sites. That’s right. Upstream traffic from YouTube to has increased 17% since February. Traffic from YouTube to has gone up a whopping 38%.

So let’s accurately understand the picture. Viacom sued Google to remove copyrighted videos from YouTube, because YouTube was in the position of making money off Viacom’s content. In so doing, they assumed that people who wanted to see the various Jon Stewart (and other) clips would make their way to, where they could have the same experience offered on YouTube, except with Viacom’s ads attached. From a traditional media perspective, this makes perfect sense.

However, the opposite has happened. Not only have people not gone to to see the clips in numbers anywhere near YouTube’s, the site and have lost market share since Viacom pulled the clips from YouTube. YouTube, meanwhile, continues to show explosive growth and is actually feeding Viacom’s properties with an increasing amount of traffic — all without compensation, I should add. (Where’s the quid pro quo love, Mr. Dauman?)

And without all those people swapping and emailing the Stewart clips or the Colbert clips, their influence will begin to decay as well. Out of sight, out of mind. And soon the audience for these shows will be limited to hard-core fans and nothing more.

I know this drives people nuts, but we simply cannot ignore the power of the personal media revolution in what’s taking place across the media landscape today. The Media 2.0 disruption isn’t about online brand-extension, multi-platform delivery schemes, deals with Joost, or anything else that tries to protect the Media 1.0 paradigm. And it’s not (just) about technology either.

It’s all about people — informed, empowered, enabled, involved, and connected people — people who are fleeing the relentless assault of mass marketing and building new value chains and a new media economy in the process. Involving ourselves in all of this is more than just the right thing to do; it’s an absolute necessity of doing business in the world to come.

(Edited 7/9 to reflect market share versus “traffic”)


  1. I’m not clear on this. The chart embedded here is “monthly maarket share,” not total traffic. Aren’t those two different things? according to alexa, traffic to is up considerably in the last year. Maybe I am missing something.

  2. Good point, John, but monthly market share is a measure of traffic, and the one that matters most. When Dauman made the statement referenced above, he used January year-over-year numbers that didn’t even include traffic after the action against YouTube. During that year, Viacom had introduced applications (like Motherload) that produced market share growth. Add to that the reality that the market is growing, and you understand the significance of these numbers.

  3. I hear you, but the .com market is not a zero-sum game, right? overall web traffic goes up every day and new ad money is flowing into the sector, so you could easily lose “market share.” while still seeing overall growth in traffic, reach and revenue, right? I’m not saying is (how would I know), but they COULD, right?

  4. Exactly, which is why I’ve edited the piece. However, the argument is that Viacom’s strategy was old school and reactive and that it isn’t and won’t give the company the growth that it really wants, and I would further argue that the same market considerations you reference would/could also “lift” overall traffic to Viacom sites during the period. This is why market share is such an important metric.

    The bottom line, though, is that Viacom’s reaction was the wrong one and that working within the disruption is always the right choice. By suing Google and aligning themselves with Joost, Viacom has made a strategic blunder of Biblical proportions. Mark my words.

  5. definitely not disagreeing with you on that point, just being picky on language.


  1. dSeneste says:

    Konklusion — Indholdet skal ud til brugerne

    Tidligere pÃ¥ Ã¥ret forlangte tv-giganten Viacom, at de mange smÃ¥ klip fra deres programmer, som blev lagt pÃ¥ YouTube, skulle fjernes. Det var især klip fra Comedy Central og MTV. Viacom ville gerne vise tv-programmer pÃ¥ nettet, men de ville gøre …

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