Week Of October 9, 2006 - Flags Mon / Wed / Fri

October 13, 2006

It's Friday the 13th.

And with all the chatter this week about Google and YouTube and MySpace, it seems to me that it's once again time to remind ourselves that as important as something new is, something old, something borrowed, and something blue are still traditions that have purpose and value.

But more specifically, the alleged nirvana of digital delivery is, by its nature, a secondary distribution channel. Yes, we are becoming more capable every day of making an endless amount of content easily available to consumers. But ease of access and amount of access are only two parts of the overall equation.

We all must keep in mind that the delivery websites that are getting so much media play right now are only tools, not content creators. And as such, loyalty will only last as long as there is no superior competition providing a comparable tool. It's not that there isn't a lot of money to be made in delivery systems. And though there was an answer to Yahoo! (Google), there are still only two major search engines, still only one kind of hardware for music and video download that is immensely popular (iPod), just three major digital video delivery platforms (QT, WMV, Real), etc.

But the lesson, as it so often is, is still the Betamax and the PC. Your delivery platform can be superior in every way and still come in second. In both of the cases, the ultimate answer was that price and availability won the day when the differentiation was not significant enough to force the issue. The Macintosh had such a loyal base from the old days and such a hipness factor, that it has survived. But it has thrived primarily because of the new technology of the iPod and the iTunes online platform.

The funny thing about the iPod, like the movie business, is that too much progress could lead to self-created extinction. Each generation of the iPod has added technological steps and size improvements. But do you ever wonder why the concept of the iPod hasn't been more branched out by Apple? When they announced the "iPod Stereo," all it turned out to be was a larger, more dramatic speaker than the ones already being sold by JBL, Altec and the like. The deals that Apple has made for the next generation of cars to be 80% equipped for iPod functionality... but where is the real iPod car stereo? You know, the one where you can shuttle your iTunes library from the desktop to the car stereo through some sort of memory stick and have it live in your car, so you never have to worry about leaving your iPod in the car to be stolen or carrying it in and out of the house.

It's obviously a great idea. But it is also the kind of idea that undercuts the core of what drives the hardware side of the iPod empire. With a car stereo, you could use more space for the memory and thus, make it a bit less fragile. But then, it lasts longer. And if like most commuters, you listen to music primarily in your car and in your home, your need for the next generation of the technology is all but eliminated.

How about a iPod-based home video system smaller than your VCR or Tivo that holds hundreds of hours of content that you have purchased? (Of course, the image quality on your iPod would look like crap on your TV as currently configured. But that is just an issue of taking the next step of functionality.) Imagine digitizing all of your DVDs and never having to deal with all those boxes again.

It will happen eventually, but Apple will stretch it out as long as they can because any time they move from this one, specific technology, the IPod, they open the door to real competition. With the iPod, everyone else is trying to push open a market that is very satisfied with the iPod. The only vulnerability they have is price and no one really wants to get into the business at a significantly reduced price point.

So what is the biggest obstacle to a 1000-hour digital home system iPod/Tivo type machine? DVDs. And will studios want to allow a box, even if it has no output opportunity for the material digitized on the hard drive, to decode their DVDs for the convenience of the customer, probably also capable of downloading DVD quality films and features directly, eliminating the disc itself? The answer is, "no." Why? Because the actual DVD, still not-coincidentally sold in oversize cases to create the appearance of a more substantive product, is the only way of differentiating between the DVD that they sell to consumers and the TV that consumers buy in bulk.

Of course, this is a looooong way around to YouTube and MySpace and Google.

They future of MySpace will ultimately be determined not by the magic of friends interacting with friends in the web universe, but by News Corp's learning and new ideas about how to build on that space. And if they fail, they could kill both the goose and the golden eggs. But without the eggs, the goose will eventually just die on its own.

The phenomenon of YouTube has to do with its functionality and, for now, its uniquely huge daily audience. You could load your digital video on other competing sites, like iKlipz (home of "Lunch With David") without noticing much difference in functionality. But with so many more eyeballs wandering around YouTube, the chance for your video to be seen by more people is, obviously, greater. And for most people, that is part of the fun.

The reason why Google Video was not as successful and that, aside from eliminating competition, they felt they had to go ahead and buy YouTube, is that GooV was less surfer friendly. They just didn't lay back and spread it for crap and gunk like YouTube has.

But still, for networks and movie studios, YouTube and the current form of MySpace are just middle technologies. There is no way to really monetize them now. And when they can, they will go private, since giving control to another company, whether it's Google or News Corp is not something anyone will want to do. Right now, it's small and experimental and they are trying to build appetite for digital downloading in all kinds of ways. But the revolution on the way is not the democratization of content, but the newest way to suck the money out of your pocket.

YouTube is, for all intents, short form, audience controlled programming. But as we all know, the largest numbers of people are passive in their TV watching, even in the era of the DVR.

There is no question that the industry will have to consider and reconsider the price structure and opportunities for content ownership by the public. But YouTube and MySpace are just tools - and very possibly short-lived tools - toward the end that the business really hasn't begun to tackle as of yet. They are still too busy, as is the media, distracting itself with the giddy stupidity of the new.

Or haven't you noticed that they only people who have made a dime on YouTube are the guys who sold it and the only profit taken on MySpace was the guys who sold that…. News Corp is many years away from the site paying for itself.

Or maybe you still think people are going to watch movies on their cell phones…

E Me.

---

Week Of April 3, 2006 - Life In the Bubble - Mon / Wed / Fri
Week Of April 10, 2006 - List Week - Mon / Wed / Fri
Week Of April 17, 2006 - Review Week - Mon / Wed / Fri
Week Of April 24, 2006 - Overlooked Week - Mon / Wed / Fri
Week Of May 1, 2006 - Mystery Week - Tue / Wed / Fri
Week Of May 8, 2006 - How We Watch Week - Mon / Wed / Fri
Week Of May 15, 2006 - Premature Week - Oscar Mon / Wed / Fri
Week Of May 22, 2006 - B-13 Mon / Inconvenient Wed / Fri
Week Of May 29, 2006 - Wed / Fri
Week Of June 5, 2006 - 666 Tue / Iraq Doc Wed / Seattle Fri
Week Of June 12, 2006 - SIFF Mon / SIFF Wed / Fri
Week Of June 19, 2006 - Cinevegas Mon/Deliver Us Wed/Prada Fri
Week Of June 26, 2006 - Pirates Mon / Super Again Wed / Fri
Week Of July 5, 2006 - Wed
Week Of July 12, 2006 - M. Night Mon | You, Me & Wed | Monster House Fri
Week Of July 17, 2006 - 8 A Year Mon / Water Wed / Revamp Fri
Week Of July 24, 2006 - Comic-Con Mon / Gossip Wed / Fri
Week Of July 31, 2006 - Mel G Mon / Talladega Wed / Fri
Week Of August 7, 2006 - Mon / Wed
Week Of August 14, 2006 - No Column Mon / Wed / Snakes Fri
Week Of August 21, 2006 - Snakey Mon / Anniversary Wed / Scoundrels Fri
Week Of August 28, 2006 - Mon Love / Berloff Wed / Fri
Week Of September 4, 2006 - Thur
Week Of September 11, 2006 - TIFF Mon / Bobby Wed / Fr
Week Of September 18, 2006 - Mon / TIFF 1 Wed / TIFF 2 Fri
Week Of September 25, 2006 - Mon / Wed
Week Of October 2, 2006 - Atonement Mon / Wed / Indie Fri