Why Online Video Just Took One More Big Step to Legitimacy
People watch 5.3 hours of TV / day. They read less than 30 minutes. You can’t change media consumption patterns easily. The future of the Internet is video. Full stop. Production costs have fallen more than 90%. Distribution costs have, too. This is classic “Innovator’s Dilemma” market conditions. My estimate is that the top 5 YouTube networks will do > $200 million net revenue in 2013 (after Google’s share) These same top networks – Maker, Machinima, Zefr, FullScreen, BigFrame – and the like have create nearly 1,000 new tech / media jobs in LA in the past 3 years alone.
Google does not have the semi-benevolent reputation of Amazon, however, so there will be trouble ahead.
While each of these channels celebrate the building of their brand and audience, they’re also building the brand and audience of YouTube. And what happens when the day comes — and it inevitably will — when Google and them can’t come to happy contractual terms? Where do the channels go after YouTube? Where’s the B-channel? Vimeo? Dailymotion? Once upon a time there was Veoh, but that’s just about dead.
People like to talk about how technology makes “one winner” — but these single winners create a lot of eventual losers downstream.
I hope Marissa Mayer at Yahoo is paying attention. If she is, she’ll grab Hulu while she still can.







