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YouTube, Google vs Old Media: Who Wins?

YouTube, despite being blacklisted by Viacom, and badmouthed by NBC is still growing faster than a first round NFL draft pick can run 40 meters. As its traffic grows, so does its influence and reach, putting it in a catbird seat. Today, the company has signed up BBC, one of the global media majors and is going to offer three channels in partnership with them. (Marshall and Mike’s take on the latest developments.)

The New York Times reports that the company is signing up a whole bunch of small media outfits, and building up a decent arsenal of content. But is that enough, or will it need the big media’s branded content to keep growing. In other words, will it have to eat humble pie, or will the awesome Google money machine is eventually going to make the old big media change their way.

16 Responses to “YouTube, Google vs Old Media: Who Wins?”

  1. I agree with Michael Stone’s comments. What can I add?

    Old Media (Viacom, NBC) is using what little leverage they have left to see if they can force YouTube into a better deal. They all would prefer to be calling the shots and if YouTube wasn’t owned by Google then that approach might work.

    Unfortunately Google has $11 Billion in cash on its balance sheet. You Tube can concentrate on the Long-Tail for now. The Old-Media Farts will soon have to fall in line.

  2. Michael Stone

    THIS IS AN EASY ONE!

    If old media capitulates and gives YouTube their libraries for crumbs, and they don’t become primary players in the Video business, then they lose.

    If they do become primary players, as Viacom is trying to do with iFilms.com, then they can also work with YouTube and still be winners.

    Old Media missed the Search revolution, and therefore, lost tens of billions in market capitalization. Time Warner could be a major player now if they hadn’t missed this.

    They all missed the contextual ad revolution – nearly every web page on the internet has contextual links on them and billions of market value has been created.

    If they miss the coming Video revolution and simply pick up a few crumbs from Google and Yahoo in the form of royalty payments, then YouTube will be worth $20 billion in 5 years and Viacom will have collected a few “tens of millions” over that period. It’s simple, in my eyes, to see how this will play out.

  3. Yes. Content is still king. Those that OWN the content are the KINGS. What does Google OWN? WHat does Google WANT to OWN? They can make what they can of Youtube now (traffic, money) but in the long term the media giants will catch up with whatever THEY think will give THEM the biggest ROI. Sure G can make a killing on Youtube to see there own RIO in the meantime, but they’ve always made a big deal about not owning.

  4. Lars Mouritzen

    How big a success is youTube?

    It really depends on what your yardstick for success is. It is pretty hard to argue with a $1.6 billion valuation, but how does youTube stack up against a traditional media company.

    Lets say youTube has 100 million individuals downloading and watching a 5 minute clip every day. That is about 8 million user-hours. (100 million x 5 minutes/ 60 minutes).

    That is probably equivalent to a days worth of TV watching in Houston. (about 2 million people, watching 4 hours a day).

    So for all the hype, youTube has captured the TV equivalent of Houston. Nothiing wrong with Houston, but if we were trying to measure youTube using traditional TV tools, I’m not sure it would even turn up in the ratings. This does rather suggest that there is some way to go before youTube can actually justify the current level of hype.

  5. Stan Miller

    Media companys have the leverage here.

    Despite YouTube’s popularity, there is still no Kleenex in the video space — just facial tissue.

    YouTube is looking a lot like Napster these days. The video space is just waiting for an Apple to define the terms of the casual viewer engagement (CVE).

  6. Can you imagine a country so stupid as to block Youtube to its over a million subscribers.
    Yes there are stupid govt’s like that still.

    I am talking about United Arab Emirates.

    Those fools need a royal butt whooping.

    LOL!.

  7. Pankaj

    For now, big media companies have an edge. But eventually, Youtube and “others” will win. Simply because of the flexibility and variety they provide to the consumer. Remember – YouTube has global reach. It can reach a house in SFO as well as in Bombay. Internet/Youtube is too powerful a combination for NBC etc etc.
    BBC too is a global News/Media company. So they understand youtube well and hence signed a deal.