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YouTube shows Silicon Valley how it can beat Hollywood

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YouTube (s GOOG) announced new milestones in the amount of video uploaded and viewed by its users Monday. With 4 billion video views daily and more than an hour of video uploaded every second, YouTube not only continues to grow, but its growth is actually accelerating. Here’s how YouTube did it — and what Silicon Valley can learn from it:

Be open

The beauty of YouTube, and its greatest strength, is that anyone and everyone can publish to the platform. There’s no hierarchy of decision-makers reviewing scripts and greenlighting projects. There’s no need for an agent. And most importantly, there’s no cost involved with participating on the site. All anyone has to do to become a YouTube publisher is to upload a video to the site.

That’s why YouTube gets an hour’s worth of video uploaded to the site every second. And it’s why people keep coming back, despite YouTube not having much of the Hollywood content that can be found on Netflix (s NFLX) or Hulu. YouTube is a democratic platform for distributing and consuming content. Its stars are discovered not by a studio exec, but elevated and popularized by its own users.

Be global

Another strength of YouTube its availability to users around the world, who are able to enjoy all the same content regardless of their location. Anyone with an Internet connection pretty much anywhere can watch the same videos that you and I enjoy. That’s important, especially as most YouTube views come from non-English speaking countries.

It’s also something Hollywood has been bad at managing as the world has gone digital. Much of piracy occurs simply because digital copies of films or TV shows are available online long before they make it to international markets. By geofencing or geoblocking certain content, today’s media companies are missing out on an opportunity to reach audiences directly that are turning to piracy instead. By being global, YouTube is addressing the largest possible audience at all times.

Be multiplatform

This is different from being global, and speaks more to targeting the wide proliferation of connected devices that have come into consumer’s hands than anything else. YouTube is seeking to make its content available on as many mobile and connected device platforms as possible, which will help its publishers reach audiences regardless of the platform they’re using.

That’s been another failing of today’s entertainment industry. On the studio side, there’s been no easy way to purchase movies that will work across devices until recently. While the UltraViolet initiative seeks to solve that problem, it still has a ways to go. And for the broadcast and cable TV networks, making shows available on new platforms means distributors generally having to secure new rights. That’s led to a hodgepodge of some networks and some shows being available on some devices, while others are not. Once again, the end result is that those publishers are limiting the addressable audience, at the same time that platforms like YouTube are enabling content to be viewed nearly everywhere.

Let’s not kill Hollywood, but offer something better

Some have suggested Silicon Valley should kill Hollywood. I think it’s naive to believe technology companies can or should destroy the current entertainment industry. But at a time when the technology and media industries are grappling over the issue of piracy, the success of YouTube can be used as an example of how other technology companies could make something better.

After all, the advent of self-publishing tools like WordPress or Blogger hasn’t killed the New York Times or Wall Street Journal, but has enabled a great number of independent blogs and technology news sites to also be influential in shaping the news. In the same way, YouTube is enabling video publishers to reach audiences at massive scale and creating a situation where in aggregate, those independents can rival the traditional Hollywood regime.

Being open, being global, and being multiplatform really just translates to being wherever the audience is. It’s about enabling viewers access to more content, not less — which is the real impetus behind YouTube’s accelerating growth. That could be a lesson to other tech companies seeking to offer an alternative to today’s entertainment offerings, or it could be used as a blueprint for some more innovative companies in the existing media regime. Take away the limits to accessing your content, and more likely than not you’ll find more people actually consuming it and more opportunity to monetize it.

12 Responses to “YouTube shows Silicon Valley how it can beat Hollywood”

  1. Cartelux

    The game is changing, faster than ever, and there are massive opportunities to monetize content online. It’s really as exciting as it gets for content producers!

  2. As other commenters have mentioned, the issue is not distribution or reaching audiences via multiple channels. The issue is how to get the investments back. Blockbuster movies take millions to make and noway youtube like medium is going to get that kind of money back. Crowdsourcing Hollywood is not going to work and will kill innovation due to lack of funds if studios are not stakeholders in movie making.

  3. Daniela Bolzmann

    Nice article Ryan, “Being open, being global, and being multiplatform” is what we are doing at Snipper as well. Anyone with video capabilities on their smartphone can use Snipper to share their mobile videos with the world or privately with friends.

  4. beenyweenies

    This article focuses way too much on concepts that are great at attracting mass “eyeballs” like openness and global reach, but what about the revenue portion of the debate?

    Any content with real production value (eg. broadcast-worthy, as opposed to stupid cat videos), requires a substantial investment that must be recouped (and heaven forbid turn a profit). It’s doubtful that YouTube can provide the kind of revenue that film/TV producers need to recoup on the average well-produced TV show or movie. For example, Breaking Bad costs $3M per episode to create. Can you imagine expecting to recoup that (plus profit) 20-25 times per season?

    In my mind, the answer is for future content to be created in a more “collective” manner, i.e. a group of writers, actors, crew and marketing/designers band together behind a solid concept, and produce the shows purely on the promise of points on revenue generated. This would fully cut out the middle man of financing/studios and possibly open up distribution in the manner described in this article. Hell, it might even improve the quality of productions because the cast and crew would have to really believe in the content to take the risk, whereas the current broadcast model is to throw a ton of sh*t on the wall and see what sticks, with the successful shows expected to offset the losses from the obvious turds that shouldn’t have ever been produced in the first place.

    • Ryan Lawler

      Not all content worth watching ‘requires a substantial investment.’ There’s plenty of content for which there’s little difference in production value between that which appears on YouTube and that which is on some cable channels.

      Yes, there will always be a market for shows which require multiple millions of dollars in investment per episode. But for lots of other content, the difference between the output of today’s prosumer HD video cameras and editing equipment is negligible.

  5. TinselTown

    This makes interesting, if very broad, points, but it’s also overly simplistic. I’m not defending the status quo of Hollywood (which is such a monolithic term that it’s kind of useless — like saying “Silicon Valley” actually means that much about specific companies doing specific things). But you can’t dismantle or destroy “Hollywood” without pretty much killing off, oh, I dunno, the “Harry Potter” movies, TV series such as “Battlestar Galactica” and “Breaking Bad” and “The Wire”, live events such as the Super Bowl and the Academy Awards, and on and on. The Hollywood system, as much as it’s fat and contrived, creates and produces content that YouTube and its billion uses cannot.

    That all said, I love YouTube and hope its growth and effect continues. But YouTube isn’t going to give me the high-quality, super-polished, [frankly] expensive content that “Hollywood” does.

    • Ryan Lawler

      @TinselTown – That’s why I’m not focused on, nor do I advocate, “killing Hollywood,” as some others are. There’s plenty of value there.

      But just as there’s a market for the NYT and WSJ, as well as for TechCrunch and GigaOM, in the news space, there will also be opportunity for YouTube and independents alongside high-quality, high-value content. It’s not one or the other, and shouldn’t be.

  6. Ryan, I absolutely agree with the last sentence in this post, but isn’t Hollywood hamstrung by a lot of people in the distribution chain having pre-existing legal rights that can’t easily be circumvented?