Is YouTube a $1.65 billion flash in the pan?

Dare I say it? A $1.65 billion snafu? Ouch!

Don't get me wrong, I am a big fan (I own Google stock!), and have been tracking YouTube since their inception. The funny thing is that they were not the only players back then, but they were the only ones with a singular focus....and so they amassed market share. Now there are many players in the space, all of them focusing on User Generated Content (UGC). I have listed the URL's of the most prominent players at the end of this blog. It's a looooong list.

So what is the draw of User Generated Content in the first place and why did it take off? Like most things there is not one answer, but I narrow it down to this:

1. Sociology: We are social beings, and we want to share. Websites that make that easy, reap the benefits.

2. Democratization: The internet has democratized many things and video is no exception. Now that the general public has easy access to the tools that make creation of video possible, they want to share them.

3. Non-Linear Experience (VOD): Unlike TV, this is a non-linear, on-demand, streaming experience that technology could finally deliver and we were ready for. Now traditional TV is playing catch up, with technology that will enable that same experience. In the near future we will most likely watch very little programming at the scheduled time of 'release'.

3. Short Format: With little time these days, the short, 'snack-like' experience of UGC fills a need. It is in its early stages and will probably breed a whole new art form before all is said and done.

4. No Advertising: Not that this will last long, but entertainment without advertising appeals to us. Perhaps advertisers will get a clue and deliver content of value as a result.

But is all of this enough to keep sites like YouTube & UGC in the public eye? Long term, I don't think it is. Today it is a novelty, because for the first time since the invention of big media, the common man can publish his thoughts and point of view for free - for everyone to see. The power of that is huge, but the fact remains that the content that is most watched, even on sites like YouTube, has to be...well...you know...good...and most if it is not. In fact, most the videos on YouTube that are the most watched, are professionally produced or disguised as such like lonelygirl15 . Now under Google's corporate monicker, YouTube is playing nice and making significant strides to remove content that is not owned by them. Read this article as Viacom trial lawyers ask YouTube to take down copies of the Colbert Report. The irony is that it is no secret that the Colbert Report's ratings grew in popularity because of circulation on YouTube. http://www.pbs.org/mediashift/2006/10/open_letterstephen_colbert_don.html

But the big deal here is that the networks and other professional content producers are catching on. It won't be long before short format programming produced by professionals is able to be streamed and eclipses most UGC. I'm not saying that there are not some very talented filmmakers out there that will not rise to the top, but I am saying that the days where we are willing to wade through crappy video are numbered. Even AOL's has built a professional online video portal to compliment its UGC site: http://video.aol.com/

UGC will also not be able to compete with the amount of media dollars placed behind the promotion of professionally produced content. 1/3 of commercials on TV today are for shows on TV.

So what is a 'YouTube' to do? I don't have an answer, but in order to be able to sell ad space which, we assume they will start doing given the Google relationship and the need to get a return on that $1.65BB, they will need to keep the eyeballs on their site. In order to do that, they will need to make sure the stuff on the site is good, and right now all they are doing is having to remove most of the good stuff.

What will happen here is anyone's guess, but it ain't going to stay like it is!

Take a look at two articles from this week from two of the largest, independent players in media and how they are making big strides into this territory.

Barry Diller & Co.
http://www.nytimes.com/2006/10/31/business/media/31jackson.html

Turner Broadcasting
http://www.hollywoodreporter.com/hr/content_display/news/e3iSvX2Mh9HIlLBrE13tEdDEg%3D%3D
What Comes After YouTube
http://www.businessweek.com/magazine/content/06_44/b4007052.htm

'Short List' of competitive sites to YouTube (UGC)
SelfMadeTV.com
Current TV
The Yahoo! Current Network
AddictingClips
IFILM
FireANT | Not TV
C H A N N E L B L A S T :: the future of internet television
GUBA - Usenet Search - Easy access to Usenet Pictures and Videos
Revver
Google Video
Yahoo! Video - Featured Videos
Channel101 - The Unavoidable Future of Entertainment
Official Google Video Blog
Welcome to Vimeo!
Myspace-Film
Break.com - Funny Pics, Hot Chicks, & Cool Flicks
GoFish - Watch videos, upload your own and share with friends
Metacafe: Funny Movies & Videos
Zango – You’re Good to Go. Unlimited Free Games, Free Videos and Free Downloads.
Veoh - The First Internet Television Peercasting Network
AOL UnCut Video
blip.tv (beta)
ClipShack
Dailymotion - Share Your Videos
Jumpcut [Make Amazing Movies Online]
Ourmedia Homepage | Ourmedia
Streamload - Free Online Storage - Share Videos and Photos - Online MP3 Storage and Access
vSocial - The Video Clip Sharing Community
motionbox
PodShow
Jumpcut [Make Amazing Movies Online]
eyespot
Grouper Video - Watch. Share. Create.