Monday, October 16, 2006
GooTube TV the Best Bet
The fallout from Google's over paying for YouTube is only starting. According to articles on MediaPost, TimeWarner, NBC, Fox and Viacom are all planning to sue GooTube for the thousands of daily viewings of copyrighted content to get a good revenue sharing deal.Google will have to give most of the ad revenue to stay out of court, and this will make their payment of $1.6 billion as the biggest DotCom debacle since Yahoo bought Broadcast.com for $5 billion. Cuban himself says the investments in online video companies have gone too far and, the bubble is about to burst.
As much as I've been a booster for online video, GooTube probably will never provide a positive return on investment, and companies are probably overly hyping the potential. Online video will be very big, but those profiting will be few and far between, and the biggest winners will be the service companies that archive, store, and index video, not the consumer companies.
Online video puts pressure on cable to come up with more comprehensive video on demand, which will happen in the next few years. The advantage that the internet has is the variety of choices for playing video whenever you want, but a better interface driven by the TV remote, VOD and network DVRs will someday provide a superior viewing alternative because lets face it, watching on the big screen is more fun.
User generated video will become a niche, but like reality TV, its days in the sun won't last long. However, if Google were to develop a video search engine that could be accessed from the sofa, then they might turn GooTube into a money maker. This seems like a more natural fit than Google's print ad venture. But would the networks want Google competing on their turf, even if they got a slice of the revenue? I'm not so sure.
Posted By John Gartner at 01:03 PM
Permanent Link: GooTube TV the Best Bet
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