Wednesday, November 15, 2006

CBS Hunting For The Next YouTube

Don’t the big guys create anything anymore? I can understand Google's purchase of YouTube because of the brand and Internet mind share but none of the other video sharing sites out there has that pedigree. Have you ever heard of Blinkx, or Veho? So why is CBS not creating their own YouTube? Why pay $1 Billion dollars for one of these no name sites for that matter why pay $100 million when you can invest $20 to $30 million in a startup and control it from the beginning. Besides what are you getting for your money? The guys that run these companies don't know how to monetize video search any more than the guys at YouTube did. Technology development is easy compared to making money off of it. Besides with any of these sites CBS will have to spend even more to build the brand.

So here's the idea for CBS (as if anyone is reading this). Don't buy anything unless you can find a scalable technology for a great price. YouTube brings in viewers with their user supported content. Do you want to be responsible for user supported content? Does CBS want to set aside $200 million like Google just in case there are lawsuits.
No, in my view, you want a promotional platform for your programming and another vehicle to sell advertising. Once you have purchased or developed your own video-sharing site you can license exclusive content from content producers and make money off of it. Why not leave the user supported content to YouTube and sign a deal with them to promote your content? Remember “time is of the essence”, Sony bought Grouper in August and the other Studios and Networks are prowling the net looking for a video-sharing site of their own. Be careful CBS; remember the old saying “Haste makes Waste”. The best solution would be to sign a deal with YouTube. You wouldn’t be growing an asset but you would be available to the biggest audience immediately. Then build the technology and the brand for your own video-sharing site. You could create Television for 21st century.

Sony is boldly going where no other studio has gone before with the purchase of Grouper for $65 million, a steal compared to YouTube. They made the purchase in August and have already introduced the Sony film library to the site via clips with a Buy the DVD tab to purchase the movies. My suggestion for them is to give viewers the option of purchasing a DVD or Downloading the film. Also the clip should be available for download to a Mobile Phone, Computer etc. Sony already has the content with EPK's (Electronic Press Kits) Trailers etc. Here is a good example of a clip from Jerry Maguire "Show me the Money"

Imagine clips from Monty Python and the Holy Grail on your cell phone when someone calls. Or clips that automatically play when your computer boots up.

But, Sony has a problem. They need Grouper to make money and will need to spend heavily on marketing and brand building and since they are a competitior to the likes of Disney, Fox etc. How are they going to convince those studios to license their product to Grouper? Is every major studio going to have their own video-sharing site? What happens if Grouper has copyright issues because of their user supported content?

Why not maximise your assets now while you build the tools to serve clips on your own sites. If CBS have $3 Billion burning a hole in their pocket they should use that money as early stage investments in Web 3.0 companies or create more content that they would own.

See, I just saved CBS $3 billion dollars. If you want to spend some of it on me. I would be glad to sit down with you and discuss ways to monetize your content on the web. Sony has boxed themselves into a corner. Think hard before you do the same thing.

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