Giants Can't Beat YouTube

Not only would an arrangement with YouTube better serve users, but online video clips present less of a threat and more of an opportunity for content owners than is frequently assumed. That's because analogies comparing the TV and film business to the music industry, which has suffered with the success of MP3s, abound.

Video Is Different

But whereas the economics of a music industry that was used to forcing customers who really wanted only a few songs to buy an entire album took a hit with the spread of MP3 downloading technologies, the video business is different in some crucial ways.

First, for people downloading music, it proved to make no difference whether songs came from a paid source or from a bootlegged one. But the quality and experience of watching video on a TV screen or in a movie theater is fundamentally different from watching it on a computer monitor. The resolution is much higher, the quality is a lot better, and people enjoy kicking back on their couches or packing into halls to watch films with others. A video-sharing service is not likely to change this.

Also, in the music business, songs tend to be self-contained units, and users can cherrypick the few songs they want and avoid paying for the rest of the album. But TV and film also have a continuous narrative quality that makes users who view a short clip they like curious about what happened before or after a segment. Video-sharing technologies give media companies a way to offer viewers a glimpse of their content; if viewers like what they see, they are likely to tune in or buy the content in its entirety.

And the less viewers need to keep track of who owns what, while flipping through what is effectively free advertising for media companies, the better it will be for both parties.

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