HOLLYWOOD, Calif.-Online video is here in a big way. If it wasn’t validated by Google Inc.’s $1.6 billion purchase of YouTube last October, it sure was last week when media conglomerate Viacom Inc. sued Google and YouTube for $1 billion, claiming rampant, unauthorized use of its programming online.
Old has become new again. With the recent influx of online video-sharing sites, cult classics and content from yesteryears is finding new and old fans in a medium that has no shelf life and no expiration date. It’s clear that the players, new and old, want a piece of the expanding pie, but is there really any money to be made in this new distribution model?
Sure, Viacom contends that almost 160,000 clips of its programming have been uploaded illegally onto YouTube’s site and viewed more than 1.5 billion times, but did Viacom really stand to profit handsomely from all of this re-hashed content? Even still, perhaps Viacom is better off perpetuating the lifespan of its content through and exploiting the opportunity to further promote its brand.
New technology, new questions
These questions and more were addressed at the Digital Media Summit in Hollywood, Calif., last week as members of the music, movie, television, Internet and mobile industries converged for two days of often-tense discussion on the future of media in the digital and mobile age.
“Anytime there’s a new technology . there’s going to be conflict,” Handheld Entertainment CEO Jeff Oscodar said during a show panel. “Traditional Hollywood distributors need to start thinking about things differently” much like the music business had to do when Napster hit the scene, he said. “We’re going to mix all of this together and give our users the entertainment they want to see.”
Those employing the traditional business models are being rolled over by newcomers. Keith Richman, CEO of Break.com, offered a perfect example. Recently his site got a deal with a studio to run a promotion online. Later that week, his company received a cease-and-desist letter from the studio’s licensing department asking it to pull the copyrighted content, he said. It’s gotten so convoluted that in many cases the marketing departments and licensing departments at the same company aren’t even on the same page, Richman said.
But is this a wake-up call for enabler’s like Google’s YouTube, or a maturation point for the market?
“I think it’s exciting because this is going to be the turning point,” Eyespot Co-Founder and CEO Jim Kaskade said, adding it reminds him of his days at MP3.com
While some are looking to subscription-based and pay-per-download models to offset the costs of making content available online for free, most in the industry agree that advertisements will continue to be the benefactor of their endeavors for many years to come. Whereas before it was all text and banner ads, Web 2.0 brings more rich content to our screens, Friendster executive Aaron Barnes said.
The ultimate winner in this battle will be the company that develops the business model that resolves all of these issues, AOL Video Senior Vice President Fred McIntyre said. “One of the biggest problems that online video solves for a user is time,” he said. Since any advertising will cut into people’s time, the value of advertisements has to be pretty significant to end users or they will be turned off, he said.
As video continues its push toward the mobile screen, many believe those issues will become even more complex as consumers continue to search for the content they want in a seemingly bottomless ocean of video.