YouTube functions a lot like spectrum

By now, everybody (self included) has expressed their opinion about the Viacom/YouTube smackdown. NBC Universal’s new chief, Jeff Zucker, joined the fray during his first day on the job by echoing one of Viacom’s positions. “YouTube needs to prove,” he said, “that it will implement its filtering technology across its online platform. It’s proven it can do it when it wants to.”

The chest-beating from Viacom and now NBC Universal are the inevitable tactics of an industry that’s fighting for its life as wave after wave of disruptive technologies and innovations threaten to crush the ship that has kept us afloat for so many years. As content creators, these entertainment companies have the right to do whatever they wish regarding “their” content. The problem is that once it has aired, people think of it as theirs.

This is not a new twist to human nature. We’ve been able to tape programs for decades and share them with our friends. What’s new is this digital thing; it’s just so much easier now. And the graph below from Alexa shows the problem for Viacom. I’ve compared YouTube’s traffic (the red line) with comedycentral.com (the blue line). The comedycentral.com line is jammed to the bottom by YouTube — so much so that you can’t even see it.

There has been no appreciable growth in the comedycentral.com site since Viacom yanked its videos, so what’s the point? Clearly, Viacom isn’t betting that people will flock to its site, because they won’t. NBC learned this lesson in the winter of 2005–2006, when it demanded YouTube pull the Lazy Sunday clip from Saturday Night Live. Their argument at the time was that people would come to the nbc.com site to watch the clips. They didn’t.

The tough truth in all this ought to be easy to understand, but it’s not. YouTube is — in some very tangible ways — the new “spectrum” for video.

Broadcasters are licensed by the FCC to play in over-the-air bandwidth spectrum capable of sustaining a television signal. This space is “managed” by the government. It’s plenty scarce, and that’s what gives it such value. All of our instincts and intuition as broadcasters flow from operating in a world of scarcity.

Online, however, abundance is the theme and scarcity is determined by access to an audience that is self-selecting in its moods and choices. Hence, YouTube functions in a way very similar to spectrum. You want a “license” to do business there? Simply open a channel. You have to play with everybody else in the world of abundance, but you can use it to your advantage, if you’re smart.

And here’s the thing. These copyrighted videos and the controversy over them hide the real value of YouTube. According to a new report by Deloitte and Touché, “at any one time, three to five of the top 100 most frequently watched videos will be ads.” The report adds, “Some of the more effective advertisements on YouTube are both entertaining and so subtle that it’s hard to even tell if they were meant to be advertisements.”

We need to pay attention to what’s really taking place at YouTube and not get caught up in all the positioning that’s taking place in the high stakes game of chicken that Viacom (and potentially NBC Universal) is playing with Google.

We ought to be experimenting in this space. After all, it doesn’t cost a dime to do it.

(Originally published in our Media 2.0 Intel newsletter)

Trackbacks

  1. […] Writes Terry: “There has been no appreciable growth in the comedycentral.com site since Viacom yanked its videos, so what’s the point? Clearly, Viacom isn’t betting that people will flock to its site, because they won’t. NBC learned this lesson in the winter of 2005–2006, when it demanded YouTube pull the Lazy Sunday clip from Saturday Night Live. Their argument at the time was that people would come to the nbc.com site to watch the clips. They didn’t.” […]

  2. […] Terry Heaton creates an Alexa graph that shows just how far up their own hinder Viacom has inserted their own head. […]

  3. […] Viacom’s kvetching (and withdrawal from You Tube) apparently stems from developing its own version of You Tube.  This may explain why Viacom left the League of Extraordinary Media Conglomerates who had been developing a collective response to You Tube a while back.    CNET reports this may may just mean an aggressive promotion of comedycentral.com, which is already quite the cash cow.  Via Lost Remote, PoMo blog explains why this may not work in Viacom’s favor. […]

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