If you've been following the battles that are cropping up over YouTube's dominance of Internet video clips, you may want to check out the back story.
Viacom made a very public gesture recently ordering YouTube to remove its considerable video content from the service. Even though sources say both sides were in negotiations over a content agreement, none was had. The number $100 million has been mentioned. Obviously, Viacom thinks its content is worth a lot more. And the issue may not just be doing a deal with Google but not wanting to have to feed the monster.
Then no sooner than Jeff Zucker took over as head of NBC Universal he slammed YouTube and its owner, Google, for not being aggressive enough in implementing a new automated system for reporting copyrighted material.
That's two major traditional media companies you wouldn't want to tick off.
And yesterday, IAC/InterActive Corp. CEO Barry Diller jumped into the all-too-public discussion and said media companies are looking to retain some control over the distribution channels. In fact, Diller reminded everyone that there are and will always be lots of points of distribution. In other words, the content companies are going to fight to keep control over their video future.
These events are significant because we may look back on this period as the end of the honeymoon for Google. Google, an outstanding company, appears ready to take over the world. In a way it reminds me of Clear Channel. I know I am not doing Google justice by mentioning it in the same sentence with Clear Channel because Google employees love their jobs and are being encouraged to grow. The same could not be said of radio's biggest consolidator back in the day. Nonetheless, they are too big companies with their eyes on the media world and are willing to get into everybody else's business.
In a world where the law allows consolidation and, in fact monopoly, it is interesting to observe Google, a company that has grown on its own into the giant that it is to look like it might monopolize everything. Google does have plans to be almost everywhere and now we're beginning to see the reaction of other companies -- not so fast.
Google will likely never see a full return on its $1.6 billion YouTube acquisition price. The kids that invented YouTube may even wind up being a case study at Harvard for businesses that wind up overpaying for something they wished they could have started. Google could never have invented YouTube. The legal problems (that's another story that won't go away) would have made it impossible to develop. Only a few college students working in a garage with nothing to lose would emerge victorious. Hey, don't let a little obstacle like replacing other companies distribution channels and building an online product without much regard to YouTube distribution rights get in the way. These young guys were also lucky. They didn't have any money for big sue-happy media companies to come after. The same is not true of Google.
Google has a lot to lose.
Now that companies are targeting Google in a fight to maintain distribution, repercussions could be great in other Google businesses as well.
Radio, newspapers and television -- a troubled media trio to say the least -- have been drinking Google's Kool-Aid ready to sell them their inventory, salivate over cost savings by cutting sales expenses and jeopardizing their one-on-one relationships with advertisers. These folks are desperate for revenue growth so forgive them. When they wake up out of their stupor they will find not even Google can be a viable replacement for solid selling -- relationships. This too will come to pass.
Google is beginning to see that traditional media companies can be stubborn, greedy and mean.
My friends, if I'm reading it right you are seeing the beginning of a new era for the colossus known as Google. Welcome to the jungle. See how traditional media companies clawed, bullied and beat their way to the top and enter the new era of "Old School Fights Back".
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