Viacom's Bet on Web Diversity

Posted by: Rob Hof on October 18, 2007

Viacom CEO Philippe Dauman, whose company sued Google last year for $1 billion for alleged copyright violations on Google’s YouTube video sharing site, journeyed into the belly of the beast a few minutes ago. He was, not surprisingly, unapologetic about the suit, which was not popular among the Web digerati. But in the process of defending his position, he did make it clear that Viacom is betting big on the notion that people online will travel to hundreds of individual Web sites for the content they want to view. That was underscored by  today’s announcement that Viacom would make clips of segments from The Daily Show With Jon Stewart available online for free. “We believe in fragmentation going forward on the Internet.”

Of course, no one person wants to see all of Viacom’s offerings, but I wonder if people really will click directly to all that many individual sites. The rise of YouTube may well depend on the presence of unauthorized videos, but there’s a reason people flock there: They can find what they’re looking for without having to click all over the Net. As Cisco senior VP Dan Scheinman said just a few minutes before, “The challenge of our era is, how do we find anything?”

Search helps, but it’s clearly not the whole answer anytime soon. And I think people, online or off, want to gather where there are a whole bunch of other people.

Can Viacom fight that reality? Maybe, if it can get enough critical mass of fans for each of those sites. And it’s hard to argue with $500 million in online revenue. But I can’t imagine that will ever be completely sufficient. Still seems like there’s more benefit in using YouTube—whose videos are hardly HDTV-quality—as a way to drive traffic to Viacom than in suing it and preventing users from finding what they want.


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Reader Comments

dg

October 18, 2007 11:58 PM

agreed. YouTube is easy.

free market research report

October 19, 2007 4:51 AM

I think Digg, MySpace, Facebook and Google manage to somehow create convenience for the end user by aggregating stuff at the one place but the irony is that may come on some body's behalf. not an ideal world - isn't?

EriamJH

October 19, 2007 6:28 AM

Viacom appears to be totally out of touch with what the ideal online experience for users is. Nobody really wants to visit half a dozen sites to get content, just like they don't want to visit half a dozen grocers to get food every week. If Viacom fails to recognize this, they very well might be able to get their content down to a minimum on YouTube - but Viacom needs to recognize that these video-sharing sites are starting to proliferate, and they could very well be diverting users to sites outside of the United States that scoff at the DMCA and will not heed takedown notices. Viacom can either participate in Google's proposed revenue-sharing model, or they can make even less money when their clips are posted on overseas sites that are starting to gain momentum.

Sabrina

October 19, 2007 9:13 AM

Yeah, agreed. Too much fragmentation doesn't seem smart. I think part of the issue is that everyone wants to do the "Long Tail" theory, but forgets that it's the aggregation of the points-of-sale where the money is made.

I loved the user's post on the "grocery store" analogy. I would add to that that 30 convenient stores is not better than one quality Whole Foods (or similar) grocery store where value is really bumped up and the quality of life is improved for the user. Hey, I LOVE Jon Stewart and Comedy Central, but does it improve the quality of my life? Sometimes. If maybe I'd had a bad week and need a laugh to cheer up. Does Comedy Central (or BET, or Nickoledeon) put money in my pocket or help me do a better job at work more than watching CNBC...? Definitely not.

These companies really need to return to the basics and ask themselves "what value am I really creating for people's lives?" -- the media execs really need to start from there.

Morely Dotes

October 19, 2007 10:13 AM

Viacom continues to demonstrate that what *they* want is more important to them than what the *customer* wants.

I stopped going to theatres because they want to show me 20 minutes of commercials before I get to see the movie I paid to see (and 10 minutes of that is threatening me with prison time, if I should happen to video 20 seconds of a movie). I stopped watching broadcast TV because, frankly, there's nothing worth my time on TV, and the pack of lies called "commercials" simply infuriates me.

Apparently, Viacom would like me to stop watching their content. I have no problem with that. I don't need them - they need *me* (and millions like me).

When they figure that out, maybe they'll try to give the customer what he's asking for - if they still have a customer by that time.

Jason

October 19, 2007 12:11 PM

Good point. With software out there like Tube Toolbox (http://www.TubeToolbox.com), people can download YouTube videos directly to their personal computers and watch them whenever they want.

I don't believe that YouTube will give up the fight and they will prevail.

David

October 19, 2007 1:25 PM

It used to be content provides (studios) could not own the distribution channels…but Viacom using political pressure helped change these anti-trust laws. As soon as the laws changed Viacom aggressively killed off mom and pop video stores via Blockbuster. Then they worked hard to kill mom and pop bookstores via Simon and Schuster.
Then they went after independent movie theaters with Mann theaters. They at one point became a monopoly.

Then they screwed up and missed the internet. They had chances to build an internet force but being a lazy monopoly they had no reason to innovate ...so they became a big dinosaur who did not understand the power of new technology. They missed the boat.

So this lawsuit is nothing but Viacom desperately trying to become a monopoly again. If you can’t beat them sue them. Monopolies are bad for the world. Viacom would love to own the entire internet and charge everyone late fees for not paying internet rental fees on time.

These are my opinions and allegations.

Don McCallum

October 19, 2007 4:21 PM

Viacom? Viacomm who? They don't own NetFlix do they? If not they aren't getting any of my money.

Steve Smith

October 19, 2007 4:41 PM

YouTube is a video search engine... there will be tons of niche video sites for all categories.

James

October 20, 2007 12:57 AM

They're just a portal of analog media. They buy it all up from production co.'s, then distribute it in packages on tv,dvd,radio etc.

Seems to me the internet already has plenty of hugely diverse portals for multi media.

mike

October 20, 2007 10:25 PM

Viacom is a lost cause they have MTV and converted it into dreadful reality TV channel it has lost its appeal with most ppl.

Youtube is what MTV used to be when they first started in the early 80s.

just because MTV cant compete with utube and provide what consumers want they now want to use law suits to kill the competition! what viacom needs to do is to provide better progammin on thier many channels and stop blaming others for thier problems

Richard Tallent

October 21, 2007 11:46 AM

I'm no fan of Viacom.

But I also disagree with the mentality that the best model for the web looks like MySpace, YouTube, and Facebook.

Social networking does not require centralized, ad-sponsored, heavily-censored web sites.

What we do need, however, are better decentralized, open technologies for identity, media distribution, social links, personal media indexing, and commentary.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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