“We are very interested in social, and in video technology,” said Bartz. She was particularly bullish on Web video: “This is just the beginning. The whole video area is so exciting. Video advertising growing four times by 2011.”
Here’s the thing I don’t get:
The online video technology game is extremely risky because
- The leading player, YouTube (one of our distribution partners), commands 50% of the market share and it is owned by the most audacious and profitable online business: Google (NASDAQ:GOOG).
- The second player, Hulu (another one of our distribution partners), is owned by the leading media companies (News Corp. (NASDAQ:NWS), NBC (NYSE:GE), and now, Disney (NYSE:DIS)) and views all technology solutions as the problem, just think of what Sony Pictures’ (NYSE:SNE) CEO Michael Lynton said yesterday:
I actually welcome the Sturm und Drang I’ve stirred, because it gives me an opportunity to make a larger point (one which I also made during that panel discussion, though it was not nearly as viral as the sentence above). And my point is this: the major content businesses of the world and the most talented creators of that content — music, newspapers, movies and books — have all been seriously harmed by the Internet.
I think net-net, the Web shrinks traditional media businesses, but it creates an amazing opportunity for new media startups to disrupt TV companies. Yahoo! isn’t a startup, sure, but in online video content, it would be a startup with the reach to hit it out of the park.
Either way, this is why I think (biased, of course) that content gives a better risk/return opportunity than technology in video.
But when it comes to Yahoo!, what is even stranger, frankly, is that the company’s history of video technology acquisitions have been suspect at best: Maven, which it bought for $160M, is rumored to be discontinued.
Meanwhile, its content forays were misses at a time when online video advertising was non-existent, let alone embryonic. It was also based on an old media approach, which is doomed to fail online.
If Yahoo approached content the right way, it can make a killing. Think about it- Bebo fetched a premium when it sold to AOL not because it was yet another social network, but because it was positioned a social content portal:
During her time there, Joanna Shields re-positioned Bebo as a social content portal, instead of a social network, making it more attractive to an old media buyer.
Let’s see: Yahoo!’s attempt at social has trailed everyone. It knows content. And when it comes to being a portal, well, it remains king.
But it’s not just Bebo or Shields. Why do you think Tim Armstrong left Google for AOL? Not just the CEO gig, I think he probably thought social media was overrated, too, and thought AOL was on the right track with its Media Glow (content) unit. Of course, I am guessing… but the man who madea fortune in search thinks content is the next big thing?
I don’t know, but I think Yahoo!’s differentiator should not be in social (Mesh, anyone? How about 360?!) but in serving up content that online audiences want.
Hulu became #2 in such a quick time not because of better technology or social media BS, it was the content.
YouTube’s challenge in holding on to the throne will be due to content, not a lack of social mojo…
Why can’t anyone recognize this?
Seems obvious. Ms. Bartz seems like a no-nonsense type of person… but to suggest that more social media or video technology represents the holy grail seems a bit off the mark.