In the latest “Google bought YouTube, now it’s worthwhile to sue them” sweepstakes, Viacom demands that YouTube delete 100,000 videos from its site. This happened Friday and isn’t news. However, the real story that has been missed by everyone, starting with the Viacom executive team, is that Viacom has just destroyed a $1B business opportunity. No doubt Viacom legal team advised this on two fronts: hold up GooTube for the maximum amount of money and for leverage in any future content deals. OK, that’s their right.
But, what if, instead of taking this approach the Viacom execs showed some creativity and embraced the phenomena that is user posted video? I mean, let’s be real here, due to the video posting rules, the average video size a user posts is 6 minutes. It’s not like they’re ripping off an entire 44 minute CSI episode here…..What they’re doing is providing FREE PROMOTION of the content being pushed by Viacom. After all, didn’t someone like it enough to go to the trouble of posting it? Isn’t it in Viacom’s interest to have a broader audience than is available on broadcast mediums alone? Isn’t it great to have a single place to engage this audience?
There are all kinds of fancy things that could have been done. But what about this dirt simple approach: GooTube, you keep the content up if you like, but we want you to add a live link back to Viacom on which we will do what we like to further promote and monetize the traffic. It could be done in an afternoon. What if Viacom had said “let’s create a Viacom community on GooTube” where our content can be showcased, shared, and discussed with multiple means of monetizing starting with advertising?
Let’s do some math: 100,000 videos. Each video averages 1,000 views over a year (I’ve posted one video 40 days ago that has had 404 views – it’s nothing special 3 star rated.) That brings us very quickly to 100 million viewing opportunities. Aside from the normal advertising stuff, let’s say we use contextual advertising where the video lead-in to the ads is relevant both to the content of the video and the profile of the viewer. That boosts the value of the ad tremendously. If we can average $1/view, we get $100M dollars. $10/view, we get $1B dollars in a year. $10/view will be very tough. $1 per view is possible (and to be explicit, I’m not talking about charging the viewer $1, that would be the fastest way to shrink this audience) if the ads are highly targeted and highly context sensitive.
But let’s not take the 1 year view, since Viacom has now demonstrated that they “get it” the number of videos grows to 200,000, then to 500,000 – audiences grow on the other transmission mediums, rates for traditional advertising increase. The linkage between broadcast and network blurs as people share and engage around their favorite content as Viacom springs into the lead by making the content freely viewable and promotes participation in the audience. Even at $1 per view, Viacom can reach $1B without requiring much in the way of imagination. Argue that $1 per view is tough, fine, it’s still greater than $0 per view.
Now I don’t know what Viacom’s lawyers think they can extort from GooTube through traditional means… But I do know this: the amount is less than $1B, this approach damages Viacom’s reputation in the audience as it’s clear Viacom doesn’t “get it,” and it damages a ready-made $1B business opportunity irrevocably. After all, do you really for a moment think those videos don’t exist elsewhere on the net? Puh-leaze! Instead of having a known audience in a single place, they’ve just dispersed the asset to other places where it’s not likely that copyright laws will reach (China anyone?)
If you’re a Viacom shareholder, you deserve and should demand more than simple extortion at the hands of broken copyright laws. You should demand that the leadership start engaging the audience on the network and harvesting cash from them in creative ways that grow the community. I’m not arguing about Viacom’s content rights, I’m arguing their ham-handed and ineffective way of using them in this instance. Why not harvest the energy of the tide rather than engage in a futile and stupid attempt to hold it back? If you’re a shareholder (and I’m not) I think you should be asking some pointed questions at the next annual meeting…you deserve better and more creative leadership. What they’re doing now amounts to passing $1B on the sidewalk simply because they can’t recognize it’s exists. Viacom trades at 24 times earnings today, adding a billion dollars to current earnings moves the share price from $41 to $76 per stub.
Investment advice: Short Viacom as a long-term issue. They’ll be a fully owned Microsoft subsidiary in 10 years time after being purchased for pennies on the dollar of current market value.
Update: Check Jim Moore’s blog out for an actual story of someone caught up in the sweep. If you check the video, it’s obvious Viacom has no ownership yet Jim was forced to remove it anyway. Talk about alienating an audience!
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I agree Mike, Viacom just destroyed a billion-dollar opportunity to coordinate with YouTube and create link-back to their sites!
Viacom has also created NEGATIVE VALUE by truly harming thousands of innocent members of YouTube by mistakenly pulling their videos down.
Viacom has given a new meaning to “Sweeps Week.” In its “sweep” of 100,000 insurgent videos, it caught up a large number of legitimate vidoes. Mine included (see my site, above). I will tell you that it is a drag to have a video taken down, to receive a “DMCA Complaint” notice (actually, three for the same video) in your email box, and to be threatened with having all of your other videos destroyed. Here is what the notice said,
“Repeat incidents of copyright infringement will result in the deletion of your account and all videos uploaded to that account. In order to avoid future strikes against your account, please delete any videos to which you do not own the rights, and refrain from uploading additional videos that infringe on the copyrights of others.”
Oh yes, and here is the “easy” way to contest the sweep and get your videos back:
If you elect to send us a counter notice, to be effective it must be a written communication provided to our designated agent that includes substantially the following (please consult your legal counsel or see 17 U.S.C. Section 512(g)(3) to confirm these requirements):
1. A physical or electronic signature of the subscriber.
2. Identification of the material that has been removed or to which access has been disabled and the location at which the material appeared before it was removed or access to it was disabled.
3. A statement under penalty of perjury that the subscriber has a good faith belief that the material was removed or disabled as a result of mistake or misidentification of the material to be removed or disabled.
4. The subscriber’s name, address, and telephone number, and a statement that the subscriber consents to the jurisdiction of Federal District Court for the judicial district in which the address is located, or if the subscriberis address is outside of the United States, for any judicial district in which the service provider may be found, and that the subscriber will accept service of process from the person who provided notification under subsection (c)(1)(C) or an agent of such person.
Just keeps getting worse. I’m sorry you’ve gotten caught up in this Jim. Good luck in getting your video “unswept.”