Thursday, August 16, 2007


The DMCA ruling is what is so far protecting YouTube from any of the copyright infringements that has been piling up against them. Blogger (disclosure: used for this blog) recently took down a "Facebook Secrets" blog that displayed the source code of Facebook. So - that being said, will people invoke the DMCA every time something goes up that is questionable and / or objectionable? couldn't continue to fight the battle with the DMCA with the mounting legal fees and is now officially dead.

Is an alternative Creative Commons? What's the difference between posting something to your own Web site versus posting to YouTube? Is there one? I think that the pending legislation around the DMCA is really going to change Web 2.0 and the direction that it goes.

My feelings? I think that copyright holders need to be more open and available with their intellectual property. My favorite example goes to the mash ups that were available when Lucas made some Star Wars clips available to fans. Zidane's head butt mash ups were the funniest thing I've ever seen, and probably did wonders for the sport that plays fourth (maybe fifth) here in the states.

It'll be interesting going forward and will change the models of a lot of businesses out there including Google and the other big digital players. We'll keep an eye on this space for you...

Friday, August 10, 2007

TV and the Long Tail

It's anyone's guess as to whether the acquisition by JumpTV of CyclingTV makes sense. That being said CyclingTV actually has paying customers - $40 a year for 18,000 customers - about $720,000 in annual revenues. JumpTV recently raised $100 million in an IPO and is using its stock and cash fairly wisely (the Cycling deal was 50/50 about). But the disclosure about CyclingTV actually brings up a very interesting point. Are customers willing to pay for content that they really really really want?

I think the answer is YES they are. And maybe JumpTV has the answer - aggregation. The ability to bring the long tail into one market. After all, with only 18,000 paying viewers, how can you pay for anything else other than a basic infrastructure? But with aggregation and shared resources this could become profitable. Paid content surely prevents getting around the guys that sign the checks since there are few advertisements if any. The one thing I'm worried about is piracy for these guys. It's not too difficult for a disgruntled customer to take a stream of Cycling TV and repost it on YouTube. Or is it? I'm not a subscriber but I'd be interested to see what their DRM is....

For the naysayers out there....remember in 1985 (if you were alive back then) when someone asked you to start paying for TV (yes it was and still is free for SOME content). Well guess what that trend took off. Pay Internet TV? Maybe not such a bad idea.

Thursday, August 9, 2007

The Bubble is Getting Bigger

PaidContent just reported that NBC and News Corp's Clown Co, as dubbed by Google execs, video sharing site, received a $1 billion dollar valuation by receiving $100 million for 10 per cent. Earlier NBC Uni launched a site where users can watch commercials (similar to TBS's VeryFunnyAds). This follows large VC investments in comedy video sharing sites, $30 million in Video Jug, and a boat load more in Veoh (which MTV exec Tom Freston joined in...hmmmm this could be interesting..).

Well, I hate to say it guys but this is the same exact scenario that happened in 1999 with ecommerce websites (although no lavish parties this time around). Sure, we all want to build the next YouTube but with no business model how can these valuations be sustained and which companies can absorb the loss (and potential lawsuits) of these resource intensive sites? Only a handful and Google is trying to make good on its first purchase.

We need to see a model that works in this space. There needs to be a way for producers to make money for advertisers to make money and for the user to...well the user always wins.

Friday, August 3, 2007

The Risks of Social Networks

Reported today (via Mashable) was how Facebook lost Vodaphone as an advertiser because its skyscraper ads were placed on the same page as the British National Party (a far right party that wants to rid the UK of all non whites). On that same page were T-Mobile and Virgin Media which so far have not said anything. This is just another example of the difficulty with advertising on social networks. The message cannot be controlled. I cannot imagine actually having someone troll through each and every single page on Facebook to make sure that ads are placed exactly according to the criteria of the advertiser. Does ad placement make Vodophone guilty by association? Were these criteria even given to Facebook?

I think as brands we need to understand what is happening within the Internet and that we cannot control the message as much as we'd like. Look at what happened with GM and their viral video contest. It would be a different issue if Vodophone ONLY showed up on the BNP's page. Regardless, as brands we need to tell media outlets what we definitely do NOT want to be associated with. To have Facebook assume that they don't want to be on BNP's page is ridiculous. We are losing control whether you like it or not so we have to adjust ourselves for it. Provide media outlets with criteria that would cause you to pull your advertising; but don't try to ask them to read your minds...

Thursday, August 2, 2007

The Penguin Eaten by the Mouse

It's official! Club Penguin has been acquired by Disney for a whopping $350 million with bonuses and incentives that could be worth up to $350 million more. Supposedly Disney outmaneuvered AOL at the last moment. We talked a few months ago about how Sony was in talks with them at a valuation of $450 million. The site has 12 million users and 700,000 subscribers paying anywhere from $6 a month to $58 a year. The amazing thing about this site unlike many others that have been bought is that it is a cash cow. The site has margins of 50% with about $30 million in revenue. Talks with Sony and other media companies interested in buying it supposedly fell apart because the Penguin donates a substantial amount of profits to charity.

I think that Disney got a steal here. If you think about the MySpace acquisition about 3 years ago which Fox also stole at $580 million Disney will have a lock on the child market. And unlike Second Life, these are real paying users. I'm not sure how integrated the Penguin will be with other Disney properties and I don't know how good of an idea it will be to do that, but just the fact that you have the attention of 12 million people (I'm assuming mostly kids) is superb. Again, not to bash Second Life, or even Joost, or other download services, but it goes to show you how important it is to keep your product within the confines of the Web. Club Penguin is flash based. Kids don't need to worry about viruses or any other kind of malware and they are able to access their accounts from anywhere - versus any of the software based programs which force you to download onto the local computer. Viacom purchased Neopets in 2005 for $160 million (a very good deal, good job Sumner!) and now there appears to be a showdown between Disney and Nickelodeon for the kid market. What will happen? I'm not sure. But this space dominated by others like Webkinz and Habbo Hotel will be an area to watch.

Wednesday, August 1, 2007

Long Tail....Dead?

A very interesting study was published by Chitika and the University of Texas saying that the top 50 blogs generated $50 million in revenue total (via TechCrunch). Not bad. That gives the average top 50 blog $1000 of annual revenue. Of course this number is skewed since Perez Hilton and Michael Arrington aren't really scraping by. Arrington points out that 15% of total blogs accounts for 90% of the revenue out there. That could be true. However, I do believe in the long tail although money might not be the best way to measure it. True, there are a lot of blogs out there that really mean nothing (a teenager's diary, personal notes, family photos) but there are other random blogs that discuss all types of obscure topics, ranging from Transformer toys, to a Shih Tzu's life, to life in Topeka, KS. Someone's gotta be reading these things! And the more niche the blog the better. You can sell toys, dog gear, and local services on the above mentioned blogs, respectively. Sure the big blogs will always work best for Coke and Pepsi type products, but we can now compare blogs and the target demographics to cable television....

I think ad networks have yet to realize the power of the long tail, and until that happens you'll get these skewed numbers....