If Online Video Were A Baseball Game: Inning-by-Inning Summary

You always hear how online video is in the “early innings.” 

Perhaps, but tell that to anyone who’s worked in online video for years, and they’ll roll their eyes, saying the industry’s been around forever, and sometimes it feels like we’re in the dog days of August.

Incidentally in both 2008 and 2010 I said that “video is where search was in 2002.”  The past two years have brought change, and in an article down the road, we’ll ask “where’s video in 2012 relative to search?” 

But today, we’ll look at the history of online video as if it were a baseball game (please forgive the mid-season and off-season analogies, though). 

It’s a Long Season, But This Game is in the Late Innings

The more appropriate analogy is that it’s early in the season, with a number of games already played. 

We’re actually in the late innings of this match pitting the Distribution Disruptors vs. the Content Monarchs, with the Disruptors representing the NY Yankees, armed to the teeth with nearly $1 billion in financing.  The Monarchs, meanwhile, were one of the original franchises that have struggled of late.

1st Inning (2004-05)

On October 15, 2004, Jon Stewart goes on CNN “Crossfire” and criticizes journalists.  CNN.com’s error of not making the video available gives aggregator iFilm its breakthrough, as the clip goes viral (with viral videos being as common as hitting for the cycle).  In 2005m iFilm is acquired by Viacom for $49 million but is then sent down to the minors, never to be heard of again.  Meanwhile, Stewart galvanizes his role as the rotation’s ace

Score after 1: Content 2, Distribution 1.

2nd Inning (2005)

Former 1990s era superstar and 1994 rookie-of-year AOL makes a comeback on July 2, 2005 by live streaming Live 8, a fundraiser to end poverty, featuring over 1,000 musicians in 10 concerts.  Marking the end of AOL’s walled garden era, it was a perfect harmony between content and distribution.

Score after two: Content 3, Distribution 2.

3rd inning (2006)

Three former Paypal employees register the YouTube.com URL in May 2005.  Depending on whom you ask, they either a) exploit the DMCA; or b) leverage the explosion of UGC on their way to a $1.65 billion sale.  A “grand slam” for Distribution. Content adds two points nonetheless, thanks to “Lazy Sunday” and all of those music videos. 

Meanwhile, with YouTube coming out of nowhere and becoming Distribution’s franchise player, many highly touted prospects (Revver, Guba, GoFish, etc.) are released, put on waivers or sent down to the minors.

Score after three: Distribution 6, Content 4.

4th inning (2007-08)

MySpace sets its sights on video, licenses premium content and orders scripted entertainment series, including “Quarterlife.” 

The odd walk and single (NBC acquires LX.tv for local content, while Adconion acquires Kush TV for push into branded entertainment) narrow the lead.

As YouTube establishes itself as Distribution’s marquee star, distributors DailyMotion and Metacafe raise $34 million and $30 million respectively in August 2007, raising expectations. 

Content’s Hulu launches in late 2007, silencing the critics in the cleanup batting order and becoming the first bona fide challenge to UGC domination and YouTube supremacy.

Score after four: Distribution 7, Content 5.

5th inning (2008-09)

The 2008-09 recession is a mid-game funk that cuts back everyone’s appetite for heavily funded, long-term bets. A barrage of Content and Distribution players are cut from the roster. Content cuts Ripe despite a $45 million investment. 

Comcast and Time Warner announce TV Everywhere; Content stands a chance.

Score: Distribution 7, Content 6.

6th inning (2010)

AOL’s Tim Armstrong signs a barrage of free agents, buying custom content maker StudioNow for $36.5 million and syndication aggregator 5Min for $65 million.

Meanwhile, Viacom’s lawsuit against Google/YouTube is dismissed.

Score after 6: Distribution 10, Content 7.

7th inning (2011)

Content publishers repeat mistakes of previous seasons and games, letting video ad networks steal bases and scale revenues.  Despite the intermediation businesses’ lack of differentiation or defensibility, ad networks drive home multiple runs and add to Distribution’s lead. 

But, as they come up to bat for a second time in the inning, things end abruptly with the bases loaded as would-be acquirers offer lower price-to-revenue multiples than expected. 

Score after seven: Distribution 13, Content 8.

8th inning (2011-12)

Distribution loses more momentum as perennial Gold-glover Netflix ends error-free game streak with series of bizarre missteps in 2011: reluctance (or inability) to retain key content deal with Starz, a rebranding snafu, and a share price hangover, which lead to the decision to move into content.  The wild pitches lead to points for Content.

In a sign of the times and the closest thing resembling a trade, Google’s YouTube also signals a shift in strategy, realizing that no amount of lipstick (algorithms and targeting) will make a pig (dog on a skateboard) look attractive.  The company decides to underwrite $200 million worth of content.

Not to be outdone, Hulu surprises some by announcing that it will be spending $500 million in content in 2012 – despite revenues of “only” $420 million in 2011.  It, too, ventures into content.

While Content cuts the lead, Distribution’s checkbook reminds all who’s in the lead.

Score after eight: Distribution 13, Content 11.

And now we find ourselves in the Top of the 9th inning.  How do YOU think this game will end?  The season?

 

Tags: video
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7 comments about "If Online Video Were A Baseball Game: Inning-by-Inning Summary".
  1. Corey Kronengold from CKPR , March 5, 2012 at 12:07 p.m.
    Good summary, Ashkan, but there's two points I'd like to add. First, you're ignoring the first 5 years of the online video ad industry. We were selling pre-roll at Launch.com back in 1999. For those of you too young to remember, Launch.com was a combo of personalized radio (like Pandora) and music videos (like VEVO), just way ahead of its time. It was bought by Yahoo and became the backbone for Yahoo Music. Secondly, and more importantly, the whole baseball analogy just rubs me the wrong way for a couple of reasons. First, saying "its still early" is an excuse for doing things poorly. We need to get over ourselves and our built in excuses. Second, even in the top of the 1st inning, you know the rules under which the game is played. Our problem is that we keep changing the rules. You don't change the rules in the middle of a game. So I've tried to stop using the baseball/innings analogy because I don't think it does our medium justice. In face, I banned using it on panels that I moderated. Unfortunately, that led to a bunch of Cricket-oriented analogies that completely lost me. But thats a different story.
  2. Lenore Bavota from Web Video Specialists Global , March 5, 2012 at 12:10 p.m.
    Very good! I think Content will win out. We are ready!
  3. Ashkan Karbasfrooshan from watchmojo.com , March 5, 2012 at 12:34 p.m.
    Corey, thanks. I actually agree with your observations, 1) In fact, in an earlier draft I specified how indeed we've seen previous "games" -dot com era pre nasdaq bubble bursting (broadcast.com, pop.com) -2001-2003 era when heavy and mania first launched and had to build destinations without aggregators etc. 2) Again, preaching to the choir, the lack of standards and common definitions is a bit of a joke; it's funny to see online pros sit around and say TV is dead when we're not even talking about the same thing. But, I thought the baseball analogy would be a fun read... didn't claim it was a perfect one! Write the cricket one, please ;)
  4. Ruth ann Barrett from EarthSayers.tv , March 5, 2012 at 12:38 p.m.
    I have to admit the baseball analogy flew over my head but it was helpful to see a review of some of the action. I'm waiting and poking the team members who actually CREATE content to do an end run around the Big Six and others who are like behemoths, stuck with legacy systems and processes. How? Call me.
  5. Fady Lamaa from mPortal Inc. , March 5, 2012 at 2:14 p.m.
    In the ninth inning, the game will tie and we will go to overtime for many more innings because the terms TV Everywhere and online video are expanding in scope. Now consumers want video on all connected devices, not just computers. So the negotiations between content companies and distributors will continue. In the meantime, the technologies/platforms that help springboard content to all connected devices will improve and help everyone. Content companies are better positioned to win; but distributors who adopt new technologies and innovate will keep up and thrive too.
  6. Chase Norlin from AlphaBird , March 5, 2012 at 2:24 p.m.
    Disagree, we're still in the first inning if you look at the online video industry as a function of the movement of global tv ad spend into digital: only @ 2% of the $200B global tv ad market has moved to online as of today. Chase Norlin CEO, Alphabird
  7. Ashkan Karbasfrooshan from watchmojo.com , March 5, 2012 at 3:27 p.m.
    Chase, it's all relative. Timelines are like maps, you can zoom in and zoom out, based on your vantage point things can be really close to one another or far away. To someone in Mars, NY and Miami is the same point, to someone in Virgina, both are pretty far away and to someone from Philadelphia one is a stone's throw while the other is a world away. I think that some can argue that we're in a much bigger "technological revolution" timeline that started in mid 20th century and is still impacting us; others will break it down into smaller sub-timelines - that's what I did here. The "game" you're describing is a match that has been going on for longer than the one I describe, it's basically WEB vs. TV ;) - and in that vein I don't disagree with what you're saying.