Viacom, The Decider

One can understand Viacom’s decision to order its content off of YouTube. After all it has the right to be paid for its content. Of course, now I’m talking like a traditional media company and you know what kind of pickle they have all gotten themselves into.

The record industry has been unsuccessfully fighting illegal peer-to-peer file sharing. The major labels have also been known to fight Apple CEO Steve Jobs on his iTunes pricing — probably angry they didn’t think of iTunes (and for that matter iPods) first. But they didn’t and the other technology companies who could have like Sony were too busy protecting its other businesses.

The radio industry — what can I say. They still don’t get it. They think consolidation can be overcome by dipping their toe into the icy waters of Internet and mobile content. Their executives suffer from arrogance so great that they would not be able to hear my students — the next generation — speak articulately about the future of radio. The students know the future is content. The consolidators don’t. For them the future is HD radio. For listeners, it’s about fresh programming -- the kind radio stations want to concoct with present formatics.

Newspapers are busy slimming down and scratching their heads over online business models. The Wall Street Journal has one of the few subscription models that makes money, but they are lost with the next generation. In other words, they’ve succeeded in putting together a pay-oneline service for their present readers. Newspapers should know better, but they think like traditional media companies.

This brings me to television — a troubled industry for sure that thinks it can put some video on YouTube and that everything will be okay. They are in denial. Sunday’s New York Times magazine in a story on Budweiser’s new online TV channel documents how network television will play a lesser role in their future. That’s from Bud — a big TV advertiser! And you know what goes with television’s decline? Advertisers cutting budgets. Budweiser has been doing it for years.

Now the news that Viacom has ordered its content off of YouTube.

No more Letterman. No more Late Late Show clips. Heck, no more Daily Show. What will YouTube be without the Daily Show? Or better put, what will Viacom’s Comedy Channel be without YouTube?

There is already evidence that CBS shows on YouTube are actually increasing the viewership on the old boob tube. Both CBS’ Letterman and Late Late Show have posted significant increases in audience traceable to their YouTube clips. So how can all those smart suits at Viacom make a decision to pull their clips from their new best friend — YouTube. Is it just envy? Or negotiating muscle?

YouTube and its parent Google have already agreed to pay Viacom for its content. The figure thrown around is $100 million. Obviously, Viacom doesn’t think that’s enough. Or Viacom execs are holding out for more. Or, maybe Viacom thinks it can do YouTube better.

The Viacom-YouTube fight is a classic battle of traditional media not getting it and new media not understanding the mindset of traditional media. Fact is that both parties need each other. If YouTube continues to grow in viewers, can Viacom afford not to be available on it? And does YouTube understand that dealing with traditional media companies is like negotiating with timid bullies that are used to dictating the course of relations.

It is hard to believe that Viacom is going to create the next YouTube when there is already one out there. Both YouTube and Viacom need each other.

Let’s hope that Viacom walking from negotiations is a ploy for more money and not another real life case study for students of tomorrow on how not to run a media company in the new age of interactive media.