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Billionaire investor and dot-com veteran Mark Cuban had harsh words Thursday for YouTube, the online site that lets people share video clips, saying only a "moron" would purchase the wildly popular start-up.
Cuban, co-founder of HDNet and owner of the NBA's Dallas Mavericks, also said YouTube would eventually be "sued into oblivion" because of copyright violations.
"They are just breaking the law," Cuban told a group of advertisers in New York. "The only reason it hasn't been sued yet is because there is nobody with big money to sue."
Mark Cuban: Only a 'moron' would buy YouTube [news.zdnet.com]
Although there's truth in his statement, I wonder if it would be the same type of morons that bought Broadcast.com for $6 billion at the height of the internet bubble.
Morons are good for Cuban's over-rated entrepreneurship, but bad for other entrepeneurs.
Amen to that. I was shocked when Yahoo bought Broadcast.com then and I'm still shocked now.
YouTube, which has nearly one-third of the U.S. Web video audience, three times that of Google, or twice that of News Corp.'s MySpace
That's not what they're saying here [marketwatch.com] , well with regards to MySpace anyway.
Cuban cautioned advertisers against investing heavily in so-called viral campaigns that are spread by users beyond their initial point of distribution on YouTube or other video-sharing sites. But he touted opportunities to run commercials on high-definition television such as his HDNet network.
The real reason for his pessimism?
Youtube has a great viral quality. If someone takes a little time to figure out how to monetize, they'll be big winners. Anyone that has spent time on youtube will recognize that there is a lot more going on there than just teenagers lip syncing.
Plus - Youtube will easily be able to prevent copyright lawsuits the same way Google and Ebay prevents them. By claiming to be a venue - or a medium - and by shutting down copyrighted media when it is reported. - The DMCA provides plenty of leeway for this.
+ Huge number of people repeatedly visiting it to see new content
+ providing that content for free
+ sorting/ranking that content
+ marketing it to all their friends for free
+ enjoy using the site / like the brand
+ low outlay/staff costs
+ more content than competitors
- how to make profit from it?
- high bandwidth costs (launch its own filesharing technology?)
- dealing with copyright issues
- can business inovate and adapt?
- competitors with money/ideas
Possible ways to generate income could be:
Advertising - adverts at start of clips? at side of clips? whole page given over to an advertisers theme? Sign a deal with PPC company or go it alone?
Content - Sell tv shows and movies for use on mobile phones, pcs, media devices (do they have a mobile-suitable website version?). Continue giving free content (paid part is a different tab), get users, convert some into buying customers. Allow users to sell there own stuff (e.g. self made teaching/comedy vids)?
Subscription Model - for accessing tv shows? or to see better quality/higher resolution vids? So ads are removed?
Add a different business model? E.g. Auctions, VoIP etc.
For example it could move into the increasingly popular live feeds market. Allow anyone (any content owner that is) to set up a live feed to it, and allow others to pay to see that content (E.g. users would see the first few minutes of a Celtic/Rangers match, then would have to pay to see the rest, or it could be a user created video diary/video blog/show/etc - live or otherwise).
This could be done for sports events, concerts, user-created tv "channels" (or whatever users choose to create and sell live or otherwise).
Perhaps when tv stations start broadcasting over the net it could be a place everyone goes to choose which channels to ask. It could even have arrangements to show things a few minutes after the official tv showing. Or it show people making their own tv stations/shows.
Perhaps it could also become a market place for website/tv station owners to buy the right to show clips, shows, movies to their own users (a b2b compent)?
Perhaps it could do something with webcams? Become a webcam skype/myspace - allowing you to view your friends (or could you access any live cam?). Allow people to "upgrade" to a paid service for higher quality video transmission, ability to capture and store webcam (or phones camera) content etc (similiar to hotmail model).
Or it could expand into a portal (hopefully not) offering lots of other services like VoIP, shopping categories, search etc.
Whatever they do it should be interesting.
Maybe he sold his paortion, but isn't HDNet somewhat of a youtube competitor as far as providing videos goes? I wonder if that has anything to do with his dislike for them
Also his comment "The only reason it hasn't been sued yet is because there is nobody with big money to sue." is quite inaccruate as many very large movie and tv producers have requested and got lots of copywritten material remved from youtube. There was a big thing about Family Guy clips being available there, many have been removed since at the copyright holders request.
I am sure if they wanted they have a stable of lawyers that they could sick on youtube.
The whole MySpace trumping youtube for videos thing is not really accurate as it is withen networks that these MySpace videos are avaialble. You can't just go to MySpace and find videos, it is just that many people have videos on their pages. That doesn't mean Joe Public can access the videos or even search MySpace for them as you have to be a friend of someone to see thier page in most cases. Yes there may be more videos streamed from MySpace but as far as the general Internet population goes YouTube is where people go to find and view videos.
[edited by: Demaestro at 4:19 pm (utc) on Sep. 29, 2006]
“Billionaire entrepreneur Mark Cuban led a $1.7 million investment in Red Swoosh in August”
from the red swoosh site:
Red Swoosh is dedicated to providing zero-cost file and video delivery. Red Swoosh accomplishes this by incorporating best of breed P2P technology where users download and stream files from each other, rather than from webservers.
This is a guy with some serious competing interests to YouTube. It doesn't take much digging...
Most of the sites have one asset - their user base - and it should be obvious by now that social site users are a fickle bunch.
Most of these 'cool' sites will have been displaced within a year as 'cooler' sites pop up. And there's not much uncooler than the dead hand of a corporation to accelerate that process.
Even if some of these overpriced marvels survive the vicissitudes (dread word) of fashion, they cannot survive the growing up of their members - so any buyer should price a maximum 4 years life.
The silly money, now as last time, is powered by a fear of someone else getting it, as much as a genuine desire.
Sadly, the 'losing confidence' corporations, like M$N and Yahoo! tend to overpay, just as the confident ones, like Murdoch (like him or hate him; he knows no fear), dive in first and pick the cherries.
Finally, the lame ducks like Looksmart buy the dregs just before they go belly up.
The owners of YouTube are pretty dumb to not be doing this IMO.
As far as Broadcast.com: god bless him for convincing Yahoo to overpay by a factor of 10. Who wouldn't do that?
His remarks also offended managers at Dairy Queeen. To help smooth things over he worked one day in a Dallas Dairy Queen, much to the joy of all the Maverick's fans who waited in line to get served by Cuban.
Not only did Cuban pay the $500,000 fine he also matched it by donating another $500,000 to charity.
YouTube is the GeoCities of Web 2.0.
Its a neat fad to watch this stuff now, but in a couple of years watching mashed videos will be just like Geocities personal pages.
Video on the web WILL evolve, and YouTube will NOT be the place it happens at.
In the meantime, the YouTube founders will get rich, just like Mark Cuban did.
I think the thing I hate most about youtube is the asinine, immature comments that are left under each video. But they got me thinking. If they ever get bought by some big guys, they're going to have to disable the comments and probably make it less of a social networking site by doing so. Just like they'll have to prescreen some material or find other ways to prevent the copyright violations.
I think it's kind of interesting because it's worth money to you if you're not a huge company looking for an investment, but if you're are, then you'll have to nerf it down so much that it won't be worth anything.
I don't know how much advertising could be worth on places like youtube or myspace. I mean, the quality of that traffic has to suck. I don't see how that model can last in the long run when it's possible to target specific high quality traffic that is deeply interested in your product. I see alot of dating service ads on myspace now. I just keep thinking "uhhh hello? Myspace IS a dating service".