First Viacom, whose Comedy Central content was your bread and butter, sues you for a billion dollars, and now arch rivals News Corp and NBC are setting aside their differences for the sole purpose of decimating you. In short, March hasn't been a good month for YouTube. Unless of course you are one of the creators of the site, in which case you're probably still on a tropical island somewhere celebrating the 1.65 billion dollars you sold the company to Google for last year. That sale is starting to look like the smartest move these guys made since they created the site. Mistake or not, it’s pretty hard to feel bad for Google when they are trading around $460 a share!!!
It did seem a bit odd to spend that much money on a “business” without a business model that never turned a profit in its existence, but what they did get was a brand. In the short time YouTube’s been around it’s already become a part of our lexicon. “Did you see that crazy ass Connie Chung singing ‘Thanks for the Memories’ on CNN??” “Nah, but I’ll check it out on YouTube.” Despite it’s “broadcast yourself” mantra, and the plethora of great user generated content to be found on YouTube, clips from broadcast and cable television programs have long been the source of the site’s enormous popularity. Before the flurry of lawsuits, Google had been in talks with the major content providers but failed to strike any major deals, the reasons behind this were undisclosed but odds are the networks were playing hardball and looking for a big pay day on content that had previously cost YouTube nothing. Personally I think Google should’ve just forked over the dough. Being a one stop shop for viral video was what attracted eyeballs in the first place, and now that’s in jeopardy. NBC and News Corp’s new venture could be a formidable foe, especially since they have aligned themselves with Yahoo, MSN, AOL and MySpace. This is a great idea on the drawing board but how will it function as a business entity? After a decade of misfires in synergistic business relationships between internet companies and traditional media will this be the time that one of these strategic alignments can overcome the corporate culture clash? Frankly I’m more than a bit skeptical and believe this may be a case of too many hands in the soup.
LA Times article about NBC/NewsCorp venture
NY Times story - Viacom sues Google, YouTube
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