The $1.6 Billion Garage Sale

Google, a new age company -- the rage, the do-no-wrong new media conglomerate had to go outside Google's significant brain trust to buy YouTube from a couple of kids they then made into billionaires. Couldn't Google have invented YouTube on its own for a lot less? YouTube could only have been conceived of in a garage by a few fools who thought pirating other people's copyrights could be a big business. Imagine if Viacom had a skunk works and its brainstormers came up with YouTube first. How fast do you think corporate lawyers would have shot down that idea? In the music-related media we tend to blame new technology when sales go down or businesses dry up. But the real reason many media companies are on the ropes is because they have run out of new ideas -- with or without the benefit of new technology. They've been reduced to hanging on to old models or pimping their products out to get in on hot crazes they didn't invent. Viacom is still reportedly stalking Google -- a scary thought. News Corp is heavily into monetizing MySpace and one false move by the "suits" and this new age wonder loses the upside that made Rupert Murdoch spend over $600 million to possess. The readers of Inside Music Media come from traditional and interactive media. If radio wonders why it's own can't innovate, rent a few garages and send in a dozen pizzas. If TV thinks it's any match for YouTube or mobile video clips, it can only adapt not invent. Rent more garages and turn unconventional minds loose. If failing newspapers think cutting down the size of their broadsheets will attract more young readers (as they seem to believe), they'll be greatly disappointed when they stick with the Internet to get their news. Garages or more accurately off-premises, unsupervised, uninhibited, unstoppable innovating is what's winning the day. Businesses from Apple computers to YouTube got their start in garages. The $1.6 billion question is not whether Google gets its return on investment for YouTube, but whether the media business learns what Google already knows -- you can't innovate from corporate headquarters.