I certainly don’t want to be the lone man who calls widgets as bullshit, after all, widgets have become de rigueur with Web 2.0 (now that I can call BS). But let’s take it from someone far smarter and accomplished than me:
While there might be room for one or two “widget management systems”, there certainly isn’t the need for 23 of them. In addition, the ability to actually build a real business based on a packaging and distribution system around the
application containerwidget is unclear to me. So: widget=big; widget-derivative-business=probably-bullshit.
Last year, the YouTube clones were overfunded: 200 companies with nowhere to go this year and nothing to show but expensive bandwidth fees. This year original content is in demand, with reason. Of course, I’m biased.
This year, it’s the attack of the widget clones.
I told you, we’re not in a bubble, but we’ll experience a pocket bubbles each and every year, and it’s widget-time.
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WatchMojo NewsletterBack in the day of early Television production and distribution, the contestants in the competition were ABC, NBC and CBS. Over time, these networks not only produced their own content but they distributed content from production houses.
Today, the challengers are players like Joost and Babelgum.
Are they? Well, not yet at least, but people like Kazaa and Skype co-founders Janus Friis and Niklas Zennstrom and FastWeb’s Silvio Scaglia are betting that they can become the leaders in the distribution of video content online.
Joost - initially christened The Venice Project and renamed Joost this year - is the media darling of 2007, much like YouTube was in 2006. People seem to have forgotten that these technologist made their name by creating a system that let consumers rip off music labels, the sister companies of the film studios and TV networks they are now courting. We wish them well, but it’s ironic that business seems to forgive and forget so easily.
By virtue of being bought out by Google, YouTube lost its shine, leaving a void that Joost is too happy to fill.
This IHT article does a good job explaining the nuances in the two competitors’ models:
Joost is going after deals with big-name television companies and producers, while Babelgum is targeting mostly small, independent productions that would have otherwise have trouble getting distributed.
It also notes that this is already a crowded marketplace:
The market for streamed videos on the Internet is already crowded by sites like MySpace, YouTube, Veoh and many others, most of which are mainly outlets for user-generated content.
Indeed, it’s one thing to create a platform for user-generated content and another for professional content. But as the model evolves, one needs to ask: why would professional companies with thousands of content pieces, millions of users and enough money to pour into hosting and serving of rich media bother to partner up with a new middleman?
Do not get us wrong, WatchMojo.com is the kind of company that is well-suited for partnerships with either Joost or Babelgum, but the simple reality is that established media companies might not be really all that interested with partnering up with a new player and building their business. Viacom partnered up with Joost, true, but they did that mainly to give the one finger salute to YouTube, whom with 100M daily streams per day is an established player. To boot, owned by Google and its $10B cash and equivalents, Viacom is looking for a nice bounty; signing with YouTube’s pseudo competitor Joost only strengthens Viacom’s hand.
This leads us to the next point: if history is any lesson, the media companies like Viacom, Time Warner, News Corp. will not even really want to partner with a new player. It’s one thing to partner with an established player (AOL.com, Yahoo!, MSN, etc.), but between competing with a new player in a space or doing something in-house, history suggests they will do it themselves.
Of course, added distribution is always nice, and Joost has enough goodwill (ironic given the fact that at the helm of Kazaa, Janus Friis and Niklas Zennstrom were not allowed to enter the US out of fear of getting arrested…) to ride that into large viewership. YouTube’s already got viewership as it tries desperately to morph out of a user-generated content platform to something more professional. And Scaglia’s Midas touch might make it a winner as well.
All in all, we agree with Mr. Scaglia that it’s early in the broader game:
“To define what the competition is, you have to have a clear idea of the market, and we’re probably at a stage before that,” Scaglia said in a recent interview. “The Venice Project is probably a competitor, but that’s good for us because it’s nice not to be alone when you are going after a new technology.”
Interesting to see how the game plays out, that’s for sure. All those players will need content, that’s for sure.
Check out WatchMojo.com’s 4,000+ video library here.
Who does not love lists? This one is interesting. Everyone on it deserves a congrats, but here are some people that should also be there somewhere (not implying anyone should be bumped off, more as in “I am surprised they did not make it.”)
- Matt Drudge of Drudge Report.
- Rafat Ali of Paid Content.
- Not sure how you can have John Doerr but no Mike Moritz. Doerr is arguably the most influential/successful VC of the past 30 years, sure, but if you look at recent hits, Moritz has YouTube and a couple of others to add.
- Absolutely no disrespect or knock against Peter Levinsohn, but technically how can Rupert Murdoch not be there?
- Michael Rivero of What Really Happened deserves some mention, because he will cover things that mainstream media will not touch, no matter how risque and taboo it is to cover it.
I will add throughout the day…
ADDENDUM #1:
- Not sure this person is “on the web,” but whomever is in charge of censorship and what goes on the Web in China.
For thousands of Top 10 Lists, click here.
Cannibal. It’s a word that scares regular folks.
Cannibalization. That’s a word that sends management at media companies scrambling. The reason is simple: a lot of the gains coming from digital units will not be incremental, but rather, will come as a result of cannibalization from offline units.
Today Paid Content talks of Merrill Lynch Jessica Reif Cohen’s comment that: “it remains unclear how much of this revenue is incremental, as increased digital advertising appears to be displacing advertising from their traditional networks, which are no longer showing meaningful growth.”
I have been saying this (definitely not alone, though) for some time now, that this is precisely why TV networks will be slow in really migrating their content to the Web, and rightfully so. No self-respecting media executive will want to forego any part of the $75B TV advertising market for the potential of online video advertising. It’s a ludicrous assertion to think that “all media is digital and it will be multi-platform overnight.”
Psychology (greed and fear) will trump business anyway, especially when the business fundamentals don’t support a decision in the first place. Media companies are generally seen as mature. Their stock moves when their net income or revenues jump. So not monetizing content is simply not an option for management. This is a simple reality that promoters of the “put the content online and worry about it later” mantra do not seem to consider.
We have not even covered TV syndication revenues… but think about it: Seinfeld makes millions for the rightholder in TV syndication, why on earth would the producers plunk that programming on the Web and forego the audiences, advertising and syndication revenues, they just won’t.
And hence the pyramid breaking down online content:
At one point in our lives, sure, maybe the line blurring TV, Web, and Wireless programming will blur a lot more, but in our lifetime (as in until we are not senile, but perhaps while we are still alive), what you see on TV will be considerably different from what you see on the Web. What you see on the Web will resemble what you see in wireless, though the format etc. will be different given the screen size, bandwidth reality, battery life etc.
If you think about it: magazines and newspapers are both print, but the content in them - to a large extent - is different. The same can technically apply to online. We sometimes forget that dynamic.
In other words, the line between what you watch on TV and Web will be determined by economics; the line between what you watch on Web and wireless will be determined by technology. But the fact is that to think that you can simply take a sitcom and slap it on a computer screen, let alone a cell phone, is lunacy.
In fact, if you consider that estimates for online video advertising have jumped from $1B by 2010 to $3B by 2010 in 18 months, it has a lot to do with people believing that cannibalization will be stronger than initially believed because advertisers follow the consumer, and the consumer is online. But because human beings are slow to react and adapt, TV advertising will not disappear. It will go from $75B to $70B… maybe $65B in extreme cases, because TV remains a very viable and strong media. Magazines will perhaps lose a good chunk of revenues, as will newspapers, but these will not disappear outright either. After all, I don’t mind spilling my coffee on a paper, spilling it on my PDA, that I can’t stand. I also can’t take my laptop in the “think tank.” You see where I am going with this.
On this blog, I cover advertising a lot more than downloads, but even with downloads, I am just not sure the model - actually, make that, the demand - is there. I can’t bring myself to fork over $10 to see a movie in the theaters, will I really pay $5 to watch it on my cell phone? Don’t think so.
The simple truth is that we are watching a revolution of content creation, aggregation, distribution, syndication and monetization that is shaking the media business’ foundations. The economics are not there for every player to be all of those things, companies will pick and choose which areas they want to focus on. Technology and media will blur in some cases, and the winners are those that quite frankly, have the least amount to lose…
