Five Stories You Should Know About

by Ashkan Karbasfrooshan, Oct 31, 2011, 2:29 PM

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Ok, I’m now beginning my tradition of occasionally writing about how some news stories affect new media and online video.

It’s the End of the World [Wide Web] As We Know It

Investor Fred Wilson is trying to draw attention to two new bills that the content industry's lobbyists have forged without any input from the technology industry. The one in the Senate is called Protect IP and the one in the House is called E-Parasites. 

While these laws would make the Web turn into a ghost town at best and die at worst, it’s important to understand that the DMCA has also given VC-funded “disruptors” carte blanche to undermine the IP of traditional media companies. 

While no one other than the lobbyists welcome the bills, it’s not hard to understand the rationale when you consider that Viacom’s lawsuit against YouTube was too little too late, and this kind of pre-emptive, draconian first strike will likely make the tech firms they are targeting more willing to play ball.   If both parties acted in good faith, everyone would win. But one is blinded by greed, while the other is driven by fear. 

Is Netflix the Next AOL?

From July to October, Netflix’s stock price fell from $300 to $100, mainly due to unrealistic investor expectations, investment, branding misadventures and pricing changes.  Paul La Monica asks if Netflix is the next AOL.  While that may be stretching it, AOL was -- as one of the earlier portals -- an aggregator that lacked original content. Eventually, as users’ surfing patterns changed (away from portals and onto search) and technology evolved, nothing AOL did helped it from losing its one-time prominence.

While Netflix’s rise served as a reminder that aggregation had dethroned content as king, maybe its fall from grace shows that content owners should not be undervalued or forgotten just yet.  The rising value and leverage of content suggests that we’re seeing a regression to the mean and a more balanced valuation between content and aggregation.

YouTube Puts Money Where Mouth Is

After arguing that YouTube helps brands, Google is now spending $100 million to lure more professional content owners, including a handful of new ones hailing from traditional media. 

There’s no shortage of cynics: “there will be a few gems, but expecting most of this new YouTube content to be pretty darn shitty" says Rocketboom’s Andrew Baron.  Time will tell.  If the rumors are true, then I commend YouTube for guaranteeing revenue to some content owners in an effort to increase the overall quality on the site, especially considering that you need billions of video views online to make a million dollars.  This supports my forecast that we are about to enter a period of exclusivity, and is one more example of YouTube leading the way and leaving its competitors in the dust.

It’s official: Alloy acquires Smosh

While no official announcement was ever made, when Smosh President Barry Blumberg appeared on the “YouTube as the new MSO” panel at MediaPost’s OMMA West, his title – EVP, Alloy Digital, President, Smosh – suggested that Smosh’s acquisition by Alloy was a done deal. 

Smosh is a very popular channel on YouTube and the brain child of Ian Hecox and Anthony Padilla.  As one of the first acquisitions of YouTube talent, the challenge will now be to retain the duo and keep them motivated to churn out the hits -- not an obvious task but something that Alloy will find ways of doing, I am sure.  Having met Barry, I think he is one of the main assets in the deal, especially since he previously served as president of Walt Disney’s Animation unit.

Five companies receive 64% of worldwide digital ad spend

Darren Herman ran some numbers and found that Google, Yahoo, Microsoft, AOL and Facebook commanded 64% of worldwide digital advertising spend, which ZenithOptimedia pegged at $64.03 billion.

Back in 2007, I ran the numbers and found that Google commanded 40% of advertising dollars in the U.S.  Now the numbers put Google’s piece of the pie at 45%.

It’s worth noting that for all of the talk about media fragmentation and “the long tail,” the concentration of money in the hands of the few seems no different online than on television.

 

 

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