I referenced Google because they faced the same hurdles. Yet they were able to go in and get the municipalities to bid to get Google Fiber to come to the city.
So there are cities willing to overturn legacy rules.
You:For the record, we're talking about this 2009 blog post (not exactly ancient history), in which you declare: "The Great Internet Video Lie is that the internet opens distribution to compete with the evil gate keepers, cable and satellite...If you have dreams of competing with traditional TV network viewing numbers using the internet, dream on. Netflix launched streaming in 2007, two years before your post. They now have 50 million subscribers. The cable industry lost another net 150,000 customers last quarter, and DirecTV saw their first third quarter loss in the company's history during Q3. You were wrong. Sure, there were teething issues for live simultaneous streams in 2009, but that's increasingly becoming less of an issue (LTE multicast, MLB On Roku, DirecTV's Sunday Ticket broadband delivery, etc.). A history of network engineering should have made that clear that these kinds of obstacles were temporary, even WAY BACK in 2009. I'd have to ask: what do you think about Internet video's potential to compete today on the eve of live streaming service launches from Dish, Verizon, Sony, HBO, and Showtime?
Me: Again, my blog was in reference to individuals, their ability to make money and scale .
The part you left out " Internet Video. Its the salvation for content creators everywhere. Its the end to dependence on the big bad meanies, the cable and satellite companies. Right ? Hell no. The concept that “over the top” video creates a valid business alternative for content creators is as misguided an internet business myth as there is.
what content was netflix creating in 2007 ? And 8mm people watched a single streamed event and that was deemed an engineering marvel. But tell me how any individual can afford to stream to 2mm or 3mm ?
You: Comcast throttling all upstream P2P traffic indiscriminately (which you agreed with and encouraged), Verizon Wireless blocking handset GPS so people had to use their own GPS software, Verizon Wireless blocking Blutooth so people had to use Verizon's software, Verizon and AT&T blocking Google Wallet so people would use their payment platform, AT&T blocking Facetime so people had to pay more for data, ISPs using DNS direction to embed unwanted advertisements, ISPs using DNS direction to redirect users who mistype URLs to their own advertising pages, ISPs using usage caps on uncongested networks to hinder Internet video, Verizon sticking the Nexus 7 tablet in development purgatory while they pushed their own tablet, Madison River blocking VoIP in 2005, AT&T getting Apple to block Skype from 2007-2009, Verizon's decision to cripple tethering functionality on handsets so users had to pay a premium fee, AT&T's Sponsored Data and T-Mobile's Music Unlimited, which discriminate against smaller companies, MetroPCS blocking all streaming video in 2011...
Me: comcast got slapped down by the FCC. Im not a bit torrent fan. But that doesnt matter it will die on its own
Most of the examples of throttling go back years when bandwidth, in particular mobile broadband was more constrained . Exception being tethering, which hwile i would love to see tethering uncapped, its obvious why its not. Mobile broadband is a shared medium.
Discrimination against smaller companies is a fact. Everyone discriminates against companies with whom they dont see a big enough business benefit. Tmobile has 27 streaming services, but there certainly are more.
I have lots of little companies , little apps that cant get featured on apple/google app stores while big apps have no issue. Tough shit to me.
The 2 biggest on ramps to mobile internet and I got no juice. I just have to find ways to innovate like the millions of other apps that have no juice.
Same applies to dealing with streaming. We stream magnolia pictures. Little company. no juice. Tough shit to me. I have to innovate.
Mavs i have some more juice. If i can pre pay for streaming it so it doesnt hit bandwidth caps. Done and Done. If i cant. Tough shit to me.
I certainly dont have a dogmatic fear of big government. There are policies i support
i do have a current fear of how the FCC deals with issues and how the politicians in place and soon to be in place deal with issues. Particularly technology issues
My point is that there has been competition on the network that has not feared NN. They continue to grow in an non Title 2 environment
And my experiences with ATT in my neighborhood have been vastly different. And i have apartments, some old bachelor pads in not great places that have seen huge improvements as well.
but lets go to "what is being proposed"
Wheeler doesnt know what will be proposed yet. Just that it will be tied up in lawsuits.
Congress is formulating proposals to try to beat the FCC to the punch. But we dont know what they are
You've been repeatedly wrong on Internet video. Not to be insulting but it's really not up for debate. Your blog is like a foggy, digital graveyard of inaccurate predictions -
-You prove again your reading challenges.
and false, sometimes downright bizarre claims about Netflix, Hulu and YouTube. These are YOUR words (there's plenty more where this came from): "The concept that “over the top” video creates a valid business alternative for content creators is as misguided an internet business myth as there is. That kind of speaks for itself, no?
-Let me slow it down and explain it to you.
content creators = individuals who create content. In Jan 2009 ? The percentage of individual content creators who made money.. approaching zero. Do you dispute this ?
Those who were dependent on Youtube and had to share branding ? Close to 100pct
Number of content creators in 2009 that could aggregate 10k simultaneous viewers ? Not many.
The ability for individual content creators to grow content to get it seen by millions of people - none. The ability to even broadcast OTT so that millions could watch it at once ? Unaffordable.
Now you could make the argument that the content creation business for some youtube stars isnt bad. The number of youtube stars as a percentage of those attempting to join that crowd ... approaching zero.
Youtube couldnt even create an environment where they could develop content profitably . It gave up.
Feel free to ask questions if you need more clarification. I know you have only had 6 years to digest the information
"As far as entrepreneurs, few people knew my views on NN until the last couple weeks. Ive looked at thousands of deals over the last 10 years. Not a peep about NN."
Any Google search shows you've been vocally opposed to net neutrality for years, with a particularly vocal flare up in 2009. Anybody worth their salt investigating you for a business pitch would know this. Also, I still don't think that "net neutrality isn't real because the people a billionaire talks to don't mention it much" is really a very cogent point, no matter how many times it's repeated.
Right, because everyone thinks about net neutrality before they start an online business and when they approach investors they google EVERY INVESTOR they would like to approach to get their opinion rather than looking to see what kind of investments they have made.
Look at my list of investments. Google those. Go on Angellist. More than a few that you might think would be impacted by NN.
Maybe in your world that is how you work. But then again , I wouldnt invest in a business that after how many years of existence is dependent on Flattr.
"And why do you and others keep on trotting out the ridiculous premise that in 1995 i benefited from NN type rules. Nothing could be further from the truth. I had to pay for priority , i had to pay a premium to get access to dialup (which was under title 2), and to get access to the broadband homes and businesses.
One, nobody said you benefited from "NN type rules," the point was that if you were launching your startup today you'd be forced to be more in touch with these issues. There weren't specific "net neutrality" type rules in 1995, and because you paid for multicast tunnels, peering points and a premium for dial up while getting Broadcast.com off the group doesn't mean, or prove, anything.
Fair enough.
Let me ask you. What types of sites/businesses should be concerned ? You pick. Then lets ask them how much consideration they have given to NN. Is the company that came to me to stream high school sports discussing NN ? What about teaching entrepreneurship via streaming ? What about all the competitors to Hangouts that im seeing or multiperson video conferencing ?
What about all the social messaging apps that have aor are adding video ? Should my new deal Ocho be concerned ?
We all must be missing something because no one brings it up and you would think if they were afraid they would at least ask me since i have given some of them money
"Your premise that only big companies can win is so outdated and ridiculous that you would think its 1968 and you just got fired from IBM." There's quite a few off topic straw men in your comment, like this one. I don't think I said "only big companies can win." I did say that as somebody who has covered AT&T, Comcast and Verizon specifically for fifteen years, I've seen these companies repeatedly and aggressively use their gatekeeper and lobbying power to crush smaller companies, competitors and entrepreneurs across numerous market segments. As they've grown and consolidated in the absence of competition, that's only getting worse. That's something you've ignored historically, and it's again something you ignore again here.
Im happy to be corrected. Can you provide a list ?
"Do i like that the big ISPs get to put all kinds of bs fees on us and in our bills. No. But i dont think regulation solves any of that." Regulation exists. Sometimes it's good, sometimes it's bad. You, in contrast, seem to think that somehow, magically, by doing nothing (because government can never, ever work, right?) that everything's somehow going to be ok. Again, as somebody who covers these companies for a living, I can tell you without a doubt that without some smart rules of the road here, things are absolutely NOT going to be ok -- especially for the smaller entrepreneurs of tomorrow.
My experience dealing with them and competing with them has not been the same. Again, provide examples and im happy to change my mind
"And we have 5g on the horizon. Do you think it will get here faster with more regulation ?" 5G isn't even remotely out of the standards over yet, but yeah, I think a complicated global wireless standard impacting hundreds of countries will probably get here just fine whether or not the FCC reclassifies ISPs under Title II.
we disagree here. but we wont know till its too late
As an aside, did you know portions of wireless infrastructure -- and parts of Verizon's FiOS network are regulated under Title II, and nobody has died? Not a single sky has fallen.
Yep. They used it to get paid more . And those regulations havent changed in years. Just as it should be
Let me say , that im right there with a lot of people that Verizon was stupid to sue the FCC.
IMHO, the threat and uncertainty of rulemaking detrimental to ISPs is what will make the ISPs you are concerned about most competitive. The minute any regulations are passed , regardless of from the FCC or Congress, the lawsuits pass. And they will take years and that will force startups into the unknown and will negatively impact in a big way. At that point you cant ignore what might happen in the courts. its complete uncertainty, which is never good
"thats where you are on NN. You got it wrong. You made the mistake of getting religious . THe foundation of the NN argument is what you believe will happen. You provide a few anecdotes from more than 10 years of history as a foundation that your premise must be true.
For me it's really not religion or prediction, it's experience from years of writing about these issues for ten hours a day. I provided your own incorrect statements from the last decade.
which were correct
I also provided countless examples of ISPs using duopoly gatekeeper power to hinder smaller companies (I can provide many, many more).
I did ask for more above. Your countless was easily counted.
I've provided numerous examples of how Title II really isn't going to be that big of a deal and is the only sensible path forward in the absence of competition.
I missed your ability to predict the future. Can you explain that part of it again ? Or at least add the standard disclaimer "past performance is no indications of future returns, etc"
You, in contrast, seem to be arguing that net neutrality isn't real and rules aren't needed -- because Ayn Rand your tummy tells you so.
thats funny. The one certainty about me is that no one tells me what to think and I dont follow anyone's doctrine. I should show you my email replies to all those sites/foundations that follow her. .
Come on guys. I get that you are for NN and Im not, but if you are going to link to 5 years old and older blog posts, at least read them first.
I didnt say that Internet video wouldnt work in that blog post, I said it wouldn't scale. Compared to TV, it still cant handle large audiences for most. In fact, you contradict yourself if you say it can.
do you think a small streaming startup can broadcast a live event to millions of people ? If you do, explain to me how that is going to work in an affordable way ?
As far as Youtube, i stand by what I said. Aereo thought they could change the law and couldn't. Youtube couldn't change the laws or economics, but Google could. So I ended up being wrong about them. But the logic was sound.
As far as entrepreneurs, few people knew my views on NN until the last couple weeks. Ive looked at thousands of deals over the last 10 years. Not a peep about NN> So there goes that premise.
And why do you and others keep on trotting out the ridiculous premise that in 1995 i benefited from NN type rules. Nothing could be further from the truth. I had to pay for priority , i had to pay a premium to get access to dialup (which was under title 2), and to get access to the broadband homes and businesses. I competed with much bigger companies than mine and beat them every time because we out innovated.
You also put a lot of credence in "proposed rules". Which proposed rules and from who ? And where has machine vision been discussed ? You certainly havent discussed it because i wasn't referring to machine to machine communications and network management wont suffice for applications that cant have lost packets.
Your premise that only big companies can win is so outdated and ridiculous that you would think its 1968 and you just got fired from IBM.
No question you can find stupidity from every company, large and small including mine and yours, but over the past 12 years can you deny the amount of innovation that has taken place despite any and all efforts by ISPs to slow them down ?
You using your Facetime over cellular ok ? Has your network wireless performance improved over the last couple years ? Can you hear me now ? Has your wired broadband throughput improved despite NFLX going from nothing to 1/3 of primetime bandwidth ?
If you want ot look at trends, they are going away from big providers, not towards them. Texting fees ? Gone. Caps, going up. Not fast enough for anyone, but they certainly wont accelerate with more regulation.
Do i like that the big ISPs get to put all kinds of bs fees on us and in our bills. No. But i dont think regulation solves any of that
And we have 5g on the horizon. Do you think it will get here faster with more regulation ? Particularly given that all those FCC commissioners you see today. They probably wont be on the FCC when 5g hits the market. THink they will give a shit how the rules they make today impacts future tech ? That is if they can get them done before the senate or congress jumps in and makes this a political play they can take advantage of. Think that will get you the "Proposed rules" you want ?
And lets not forget that the ultimate fast lane app is also the most popular in this country. Its called digital tv. For many if not most it runs on the same cable into your home as your internet and provides a walled fast lane for content . What happens to digital tv if the proposed rules go a little bit too far because some people think OTT is the future and want to free up that bandwidth ?
thats where you are on NN. You got it wrong. You made the mistake of getting religious . THe foundation of the NN argument is what you believe will happen. You provide a few anecdotes from more than 10 years of history as a foundation that your premise must be true.
I try to work on what i know Im working on, what i know is happening. What i know Im investing in.
That is completely different from the internet model. Video on the internet is not broadcast, its unicast. Each user costs money. Each live user costs a lot of money. I think that is where your example is wrong.
No doubt. The distribution economics are somewhat different, but the difference is not nearly as big as you or Dan seem to be implying -- especially with Google and its own fiber ownership.
From MC>That is where I agree with Dan and disagree with you. Fiber is not a panacea. Its expensive. Just because you buy cheap fiber to peering points doesnt pre empt you from having to get in the rat race of always upgrading and investing in capital costs. Its just as variable a cost as renting bandwidth from someone else.
Plus, it doesnt solve the last mile. Google realizes this which is why they want to experiment with running their own last mile fiber. Which of course is right now just talk. It will be interesting to see how they report numbers on this.
You can peer all you want, but you cant control quality of service.You cant multicast across peers without huge hassle and expense. You cant even assure delivery to the last mile. Which is why Youtube used 3rd party CDNs to deliver live content. Fiber is nice. Everyone should have some, but its not free and its not cheap, and it requires constant capital upgrades to maintain. Just look at Ciscos new "save the internet" router. Its just one more upgrade in a long series of upgrades. And i will repeat, it still doesnt solve last mile issues.
And it doesnt solve unequal peering issues either. At some point with peers if you are only getting terabytes of data and not taking it back, you are helping your peer, you are hurting it. So the economics could easily change there as well
Also, while it is true that each user costs some money (I'd argue the "a lot of" claim), that need not necessarily be the case. It may be the case today for many providers (potentially not Google, again, given the fiber), but there are ways around this, such as by distributing the bandwidth load (via something like BitTorrent) or through multicast type technology.
From MC> The cost is in the details. The last peered multicast to consumer network was Broadcast.com's in 2000. Its hugely expensive to upgrade all the routers and the tunnels it takes for a stream are huge resource hogs. So ISPs are going to charge a huge premium to go through the process. I looked at creating a business just around providing multicast. It aint cheap and it aint going to happen. Plus, flash has just released their first mcast client and its for corporate (mcast is used internally at companies)
P2P is a red herring. It always sounds good, but is the least efficient protocol out there. Plus, again, bandwidth isnt free. Its just stolen, i mean borrowed from other users who usually dont even know they are doing it. Plus it requires a client, which for youtube to push on everyone would create more privacy and malware articles that could possibly cost them more than any amount of bw they could save. It just would be far more hassle than it could be worth. So i dont see P2P.
If you want the valued content that you mention , it takes an investment of millions of dollars per eps in most cases to work on network tv. (excluding reality shows). And the audience has to come quickly or they cut bait and run because the show cant be paid for.
Yes, that's the TV model, but need not be the model for the internet. In fact, it's quite similar to the discussions we've had about music. In the past, you *needed* a big record label deal to make it work. And they needed to put forth a huge upfront capital outlay. But the internet has changed those economics. The cost of creation has gone down -- and while it might not be *quite* as good as a big expensive studio, bands can be pretty damn good for much less money. Same is true with video.
From MC> No its not the same. Apples and oranges. You can still create music by yourself , anywhere and have it comparable to top quality professional music. Thats not the case with video. Plus musicians can still get paid for playing the same music that created on their mac at gigs. It doesnt work that way for TV shows or movies.
it costs more to create and your primary, if not only source is what you can sell the content for. Completely different model. Only thing comparable between music and video is that people steal it. Everything else is different
Unlike the old model (spend big, pull the plug quickly if it sucks) the new model can be more efficient (spend small, build an audience... keep growing the audience, and as you grow that audience you can increase your spend). That's actually better for everyone. And we're seeing that this works well in music, and it can (and does) work well in video as well.
Except that only works if the spend is pennies at a time. Which isnt going to get you professional content where the proucers/actors/camera people/directors/writers/gaffers/lighting people, etc get paid.
if its you and your buddies playing a song in front of your Mac and a microphone. That works. it doesnt work for people who are trying to make a living at it.
thats why you only really see talking head stuff like Fred work financially. its just fred and his pc.
Switching to youtube, there is one ENORMOUS difference between youtube content and network TV (and even cable tv content). Youtube NEVER pays for content up front. THey sell everything on consignment.
Indeed. Welcome to the new more efficient world. :)
Efficient for who ?????
Because Youtube never guarantees any revenue to producers, they are not going to get the vast majority of the content you suggest could be valued highly. Why ? bEcause content producers take on quite a bit of financial and time risk as it is. In the Youtube model they take on 100pct of the risk. IN the tv model, whether network or cable, the content producers typically dont create content on spec. They may do a pilot, but even that is rare for network TV. The Network usually funds pilots.
Sure. But now we're arguing something different -- and I disagree that high quality content doesn't go on YouTube. Many people do put it there for one very good reason: it's where the audience is. Sure, the majority of content on YouTube isn't high quality, but that's meaningless to this discussion.
From MC> The big lie of Youtube... thats where the audience is. The audience for who ? for what ? For youtube ? sure. For the people who pay youtube money to be promoted, sure.
For a couple videos a week out of the hundreds of thousands uploaded, sure. But again, 99.99999pct of the videos arent seen by anyone who wasnt related or paid by the person who uploaded it. I think you may miss that unless you get lucky and go viral, its EXPENSIVE to get an audience on Youtube. It just doesnt happen without a lot of luck.
And when it does happen and you get lucky and get views, most of those people look to get out of the youtube grind and graduate to TV or other mediums. Why ? So they can get paid for their work.
That also impacts how you look at the youtube financial model. Maybe they might break even, but they dont have any investment in content. They pay a commission for content. Which IMHO opinion means they are never going to get great content.
Again, they have a huge benefit: the eyeballs. It's hard to discount that.
From MC> Again, its expensive to get those eyeballs. Youtube knows it and charges content providers for access. Which turns your perspective upside down. To get those eyeballs for your content, you probably have to pay for the privilege
You know what has made Netflix so successful at getting content (even if they had to support windows) ? Its that they guarantee money to the content owners. You can get a guarantee of a minimum check which distributors of content LOVE LOVE LOVE>
Sure, but you're basing this on what the content owners love, not what the consumers love. Now, you can argue (and I'm assuming you are, implicitly) that if the content owners don't love a deal, then they won't fund/make the content. But that's showing a missing element of the dynamic market. The content providers that are going to succeed are the ones who better cater to consumer needs. It's what we're seeing in the music business. Trying to hold back from what the consumer wants is only an opportunity for someone to do it better.
From MC> COnsumers dont know what they like until its in front of them. Which means someone has to take the risk. Which means, when they do, unless it costs them nothing, or they have nowhere else to go, they arent going to youtube. they are going anywhere else they can. Youtube is cheap to get on, expensive to get eyeballs on
And I'm familiar with a few different production houses that are actively creating inexpensive high quality content for YouTube.
For demo purposes or to make money on YT ? Would love to see their work
You know why redbox got content at the beginning (before they got so big the big guys had to deal with them differently) ? Because they guaranteed money to movie distributors. Hell its why people protect their relationships with walmart, best buy abnd blockbuster. Say what you want about the future of those businesses, but they actually buy products and send you a check. You dont have to wait to see if someone buys your movie or show or someone watches it and Google sells some ads.
Yes, of course. And companies will work hard to protect those sorts of relationships. The only problem? The consumer doesn't care at all about how you make your money.
From MC> No question they dont care. But they do care about access and not all consumers want to spend their entire day searching through youtube. Not all consumers want content that was produced in a basement for free. Some want content that was professionally produced and would rather pay than spend all day searching. Which is why blockbuster makes more money renting DVDs than Youtube makes selling advertising around videos.
SO youtube as a businessmodel may be profitable and then some today , but its primarily because they take on ZERO product risk. They put it all on all those little guys that want to make any amount of money from the content they put their heart and soul into.
Yes. But Dan's argument was that YouTube couldn't be profitable and that no video producers could be profitable giving away content for free. Both of those are wrong, which is the point we were making.
From MC> I said may be profitable. I dont think they are either. I think even in the models they use for wall street they dont apply the overhead a standalone company would need to apply. But i wanted to be nice:)
and no content owner can make money giving it away for free. They may have some anecdotal success, but at some point the mortgage comes due and those who pay the mortgage producing content will have to get a job.. Dan is right on that front
What you're really arguing (I think) is that many people who try to create content on YouTube won't make money. And we agree. It's the whole "long tail" theory at work. Most of the folks in the long tail don't make money. Agreed. But that doesn't mean that free doesn't work. There have always been content creators who didn't make money. That's got nothing to do with free.
The point we're making is that you can still use free content to make money if you put in place a smart business model with it.
From MC> Lets define "make money" Can you generate 10k to 25k a year cranking out cheap videos for YT ? Probably. it will take a lot of work, but you can do it.
Can you make 100k consistently after your costs ? Maybe, but probably less than 50 of the millions who try will do it.
So it 50 people are proof enough, then you are right. I see everyone else that fails and that 50 or even 1k people able to make 100k a year is not proof that it works, but rather proof that it doesnt work
You say free to consumer has worked in the past, and it can work again. Correct ?
IMHO, your disconnect is in aggregate audience for an aggregator (ie youtube), vs simultaneous audience for network tv. Free to consumer on network tv was enabled because its BROADCAST. Each program on Network TV can reach 100mm people. No reg scheduled shows do, but the ad supported (yr 3rd party) comes because the scale on any given show is big enough to pay for most of the cost of the license fee (most network shows deficit fund).
That is completely different from the internet model. Video on the internet is not broadcast, its unicast. Each user costs money. Each live user costs a lot of money. I think that is where your example is wrong.
If you want the valued content that you mention , it takes an investment of millions of dollars per eps in most cases to work on network tv. (excluding reality shows). And the audience has to come quickly or they cut bait and run because the show cant be paid for.
Switching to youtube, there is one ENORMOUS difference between youtube content and network TV (and even cable tv content). Youtube NEVER pays for content up front. THey sell everything on consignment. THey take a percent of the ads they sell and they give you a pct of the ads. That may work with the people who are making content thay costs very little (and i disagree with you, even those who want to make money on their content, 99,9999999pct dont make money still.( But a significant number make some of their money back and thats better than nothing. Youtube has been great for those folks).
Because Youtube never guarantees any revenue to producers, they are not going to get the vast majority of the content you suggest could be valued highly. Why ? bEcause content producers take on quite a bit of financial and time risk as it is. In the Youtube model they take on 100pct of the risk. IN the tv model, whether network or cable, the content producers typically dont create content on spec. They may do a pilot, but even that is rare for network TV. The Network usually funds pilots.
So, where this all comes out is that Youtube ALWAYS plays with other people's money. They get theproducers to absorb 100pct of the production costs. IMHO, they arent going to get any good content until that content has been monetized or tried to be monetized EVERYWHERE else.
That also impacts how you look at the youtube financial model. Maybe they might break even, but they dont have any investment in content. They pay a commission for content. Which IMHO opinion means they are never going to get great content.
You know what has made Netflix so successful at getting content (even if they had to support windows) ? Its that they guarantee money to the content owners. You can get a guarantee of a minimum check which distributors of content LOVE LOVE LOVE>
You know why redbox got content at the beginning (before they got so big the big guys had to deal with them differently) ? Because they guaranteed money to movie distributors. Hell its why people protect their relationships with walmart, best buy abnd blockbuster. Say what you want about the future of those businesses, but they actually buy products and send you a check. You dont have to wait to see if someone buys your movie or show or someone watches it and Google sells some ads.
SO youtube as a businessmodel may be profitable and then some today , but its primarily because they take on ZERO product risk. They put it all on all those little guys that want to make any amount of money from the content they put their heart and soul into.
So while bandwidth costs going down is a great thing for youtube now. If we ever get to the point of a very cheap marginal delivery cost for billions of streams (download, thats notgoing to happen with live), then other companies will be in the position to put up some cash and lock out Youtube from content or force them to pay for content upf ront. Which they may be happy to do, but I wouldnt bet on it.
This is exactly how HBO changed the movie business. They committed to pay money up front to movie producers and tv producers for that matter.
So content isnt free unless no one else has valued it enough to pay for it up front. Even then, what is good is relative, so there may be some nuggets that come through the system. But the reality is, youtube assigns 100pct of the risk on the content producer, which means the quality of content you get is always going to be worse than the distributors (usually tv ), that pay for the content up front.
I love techdirt, but sometimes you need to look a little deeper at the numbers.
Pick any network tv show in primetime. Do you think any are there for zero license fee ? You think Dick Wolf produces Law & Order for NBC Universal for free ?
You think the producers of American Idol dont get paid ?
Dan is right, there is no money to be made on the net on content for 99.9999999999 of content, and people at some point stop working for free.
But his point still applies to broadcast. While viewers may only pay with their attention, and they may not even realize that they are the product being sold to advertisers (how is that for turn around. The networks pimp you out to advertisers and you give them your time for free...), the reality is that content is expensive to produce and it gets paid for before its on the air.
Content is not free. Its just a question of who pays for it
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google drive, dropbox, box, they provide easier alternatives to share and host public files
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Raising money isnt as difficult as it sounds if you have a great opportunity.
so back to the question.
where ?
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So there are cities willing to overturn legacy rules.
So with that in mind. What would your answer be ?
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"The Great Internet Video Lie is that the internet opens distribution to compete with the evil gate keepers, cable and satellite...If you have dreams of competing with traditional TV network viewing numbers using the internet, dream on.
Netflix launched streaming in 2007, two years before your post. They now have 50 million subscribers. The cable industry lost another net 150,000 customers last quarter, and DirecTV saw their first third quarter loss in the company's history during Q3. You were wrong. Sure, there were teething issues for live simultaneous streams in 2009, but that's increasingly becoming less of an issue (LTE multicast, MLB On Roku, DirecTV's Sunday Ticket broadband delivery, etc.). A history of network engineering should have made that clear that these kinds of obstacles were temporary, even WAY BACK in 2009. I'd have to ask: what do you think about Internet video's potential to compete today on the eve of live streaming service launches from Dish, Verizon, Sony, HBO, and Showtime?
Me: Again, my blog was in reference to individuals, their ability to make money and scale .
The part you left out "
Internet Video. Its the salvation for content creators everywhere. Its the end to dependence on the big bad meanies, the cable and satellite companies. Right ? Hell no. The concept that “over the top” video creates a valid business alternative for content creators is as misguided an internet business myth as there is.
what content was netflix creating in 2007 ?
And 8mm people watched a single streamed event and that was deemed an engineering marvel. But tell me how any individual can afford to stream to 2mm or 3mm ?
You:
Comcast throttling all upstream P2P traffic indiscriminately (which you agreed with and encouraged), Verizon Wireless blocking handset GPS so people had to use their own GPS software, Verizon Wireless blocking Blutooth so people had to use Verizon's software, Verizon and AT&T blocking Google Wallet so people would use their payment platform, AT&T blocking Facetime so people had to pay more for data, ISPs using DNS direction to embed unwanted advertisements, ISPs using DNS direction to redirect users who mistype URLs to their own advertising pages, ISPs using usage caps on uncongested networks to hinder Internet video, Verizon sticking the Nexus 7 tablet in development purgatory while they pushed their own tablet, Madison River blocking VoIP in 2005, AT&T getting Apple to block Skype from 2007-2009, Verizon's decision to cripple tethering functionality on handsets so users had to pay a premium fee, AT&T's Sponsored Data and T-Mobile's Music Unlimited, which discriminate against smaller companies, MetroPCS blocking all streaming video in 2011...
Me: comcast got slapped down by the FCC. Im not a bit torrent fan. But that doesnt matter it will die on its own
Most of the examples of throttling go back years when bandwidth, in particular mobile broadband was more constrained . Exception being tethering, which hwile i would love to see tethering uncapped, its obvious why its not. Mobile broadband is a shared medium.
Discrimination against smaller companies is a fact. Everyone discriminates against companies with whom they dont see a big enough business benefit. Tmobile has 27 streaming services, but there certainly are more.
I have lots of little companies , little apps that cant get featured on apple/google app stores while big apps have no issue. Tough shit to me.
The 2 biggest on ramps to mobile internet and I got no juice. I just have to find ways to innovate like the millions of other apps that have no juice.
Same applies to dealing with streaming. We stream magnolia pictures. Little company. no juice. Tough shit to me. I have to innovate.
Mavs i have some more juice. If i can pre pay for streaming it so it doesnt hit bandwidth caps. Done and Done. If i cant. Tough shit to me.
You:Forbearance.
Me: Forbearance sounds much better than it sounds. When everyone asks for forbearance, it wont be as simple as you suggest. As a poster mentioned above theory never matches reality. Read http://thehill.com/blogs/pundits-blog/technology/221342-section-10-forbearance-offers-no-easy-path-t o-title-ii-lite
(untitled comment)
To replicate what Google Fiber has done. Which city would you think offers the most upside and how much do you think it would cost ?
What would stop us from doing it ?
Re: Re:
I was behind i guess, i used compuserve, 70004,216 i think was my id.
Back in the day we were at one point the largest IBM token ring dealer in the country.
But I think you got me by a few years. So congrats
where do you live ? And what was the deal given by your locals for the rights to provide you service ?
curious
Re: Re: Re: Yea
i do have a current fear of how the FCC deals with issues and how the politicians in place and soon to be in place deal with issues. Particularly technology issues
Re: Re: Re: Re:
I got mad. Doesnt mean i should have nailed you guys like that.
m
Re: Re: Re: Re:
this article provides some insights
http://thehill.com/blogs/pundits-blog/technology/221342-section-10-forbearance-offers-no-eas y-path-to-title-ii-lite
Re: Re:
And my experiences with ATT in my neighborhood have been vastly different. And i have apartments, some old bachelor pads in not great places that have seen huge improvements as well.
but lets go to "what is being proposed"
Wheeler doesnt know what will be proposed yet. Just that it will be tied up in lawsuits.
Congress is formulating proposals to try to beat the FCC to the punch. But we dont know what they are
what do you think is being proposed ?
Re: Re:
-You prove again your reading challenges.
and false, sometimes downright bizarre claims about Netflix, Hulu and YouTube. These are YOUR words (there's plenty more where this came from):
"The concept that “over the top” video creates a valid business alternative for content creators is as misguided an internet business myth as there is.
That kind of speaks for itself, no?
-Let me slow it down and explain it to you.
content creators = individuals who create content. In Jan 2009 ? The percentage of individual content creators who made money.. approaching zero. Do you dispute this ?
Those who were dependent on Youtube and had to share branding ? Close to 100pct
Number of content creators in 2009 that could aggregate 10k simultaneous viewers ? Not many.
The ability for individual content creators to grow content to get it seen by millions of people - none.
The ability to even broadcast OTT so that millions could watch it at once ? Unaffordable.
Now you could make the argument that the content creation business for some youtube stars isnt bad. The number of youtube stars as a percentage of those attempting to join that crowd ... approaching zero.
Youtube couldnt even create an environment where they could develop content profitably . It gave up.
Feel free to ask questions if you need more clarification. I know you have only had 6 years to digest the information
"As far as entrepreneurs, few people knew my views on NN until the last couple weeks. Ive looked at thousands of deals over the last 10 years. Not a peep about NN."
Any Google search shows you've been vocally opposed to net neutrality for years, with a particularly vocal flare up in 2009. Anybody worth their salt investigating you for a business pitch would know this. Also, I still don't think that "net neutrality isn't real because the people a billionaire talks to don't mention it much" is really a very cogent point, no matter how many times it's repeated.
Right, because everyone thinks about net neutrality before they start an online business and when they approach investors they google EVERY INVESTOR they would like to approach to get their opinion rather than looking to see what kind of investments they have made.
Look at my list of investments. Google those. Go on Angellist. More than a few that you might think would be impacted by NN.
Maybe in your world that is how you work. But then again , I wouldnt invest in a business that after how many years of existence is dependent on Flattr.
"And why do you and others keep on trotting out the ridiculous premise that in 1995 i benefited from NN type rules. Nothing could be further from the truth. I had to pay for priority , i had to pay a premium to get access to dialup (which was under title 2), and to get access to the broadband homes and businesses.
One, nobody said you benefited from "NN type rules," the point was that if you were launching your startup today you'd be forced to be more in touch with these issues. There weren't specific "net neutrality" type rules in 1995, and because you paid for multicast tunnels, peering points and a premium for dial up while getting Broadcast.com off the group doesn't mean, or prove, anything.
Fair enough.
Let me ask you. What types of sites/businesses should be concerned ? You pick. Then lets ask them how much consideration they have given to NN. Is the company that came to me to stream high school sports discussing NN ? What about teaching entrepreneurship via streaming ? What about all the competitors to Hangouts that im seeing or multiperson video conferencing ?
What about all the social messaging apps that have aor are adding video ? Should my new deal Ocho be concerned ?
We all must be missing something because no one brings it up and you would think if they were afraid they would at least ask me since i have given some of them money
"Your premise that only big companies can win is so outdated and ridiculous that you would think its 1968 and you just got fired from IBM."
There's quite a few off topic straw men in your comment, like this one. I don't think I said "only big companies can win." I did say that as somebody who has covered AT&T, Comcast and Verizon specifically for fifteen years, I've seen these companies repeatedly and aggressively use their gatekeeper and lobbying power to crush smaller companies, competitors and entrepreneurs across numerous market segments. As they've grown and consolidated in the absence of competition, that's only getting worse. That's something you've ignored historically, and it's again something you ignore again here.
Im happy to be corrected. Can you provide a list ?
"Do i like that the big ISPs get to put all kinds of bs fees on us and in our bills. No. But i dont think regulation solves any of that."
Regulation exists. Sometimes it's good, sometimes it's bad. You, in contrast, seem to think that somehow, magically, by doing nothing (because government can never, ever work, right?) that everything's somehow going to be ok. Again, as somebody who covers these companies for a living, I can tell you without a doubt that without some smart rules of the road here, things are absolutely NOT going to be ok -- especially for the smaller entrepreneurs of tomorrow.
My experience dealing with them and competing with them has not been the same. Again, provide examples and im happy to change my mind
"And we have 5g on the horizon. Do you think it will get here faster with more regulation ?"
5G isn't even remotely out of the standards over yet, but yeah, I think a complicated global wireless standard impacting hundreds of countries will probably get here just fine whether or not the FCC reclassifies ISPs under Title II.
we disagree here. but we wont know till its too late
As an aside, did you know portions of wireless infrastructure -- and parts of Verizon's FiOS network are regulated under Title II, and nobody has died? Not a single sky has fallen.
Yep. They used it to get paid more . And those regulations havent changed in years. Just as it should be
Let me say , that im right there with a lot of people that Verizon was stupid to sue the FCC.
IMHO, the threat and uncertainty of rulemaking detrimental to ISPs is what will make the ISPs you are concerned about most competitive. The minute any regulations are passed , regardless of from the FCC or Congress, the lawsuits pass. And they will take years and that will force startups into the unknown and will negatively impact in a big way. At that point you cant ignore what might happen in the courts. its complete uncertainty, which is never good
"thats where you are on NN. You got it wrong. You made the mistake of getting religious . THe foundation of the NN argument is what you believe will happen. You provide a few anecdotes from more than 10 years of history as a foundation that your premise must be true.
For me it's really not religion or prediction, it's experience from years of writing about these issues for ten hours a day. I provided your own incorrect statements from the last decade.
which were correct
I also provided countless examples of ISPs using duopoly gatekeeper power to hinder smaller companies (I can provide many, many more).
I did ask for more above. Your countless was easily counted.
I've provided numerous examples of how Title II really isn't going to be that big of a deal and is the only sensible path forward in the absence of competition.
I missed your ability to predict the future. Can you explain that part of it again ? Or at least add the standard disclaimer "past performance is no indications of future returns, etc"
You, in contrast, seem to be arguing that net neutrality isn't real and rules aren't needed -- because Ayn Rand your tummy tells you so.
thats funny. The one certainty about me is that no one tells me what to think and I dont follow anyone's doctrine. I should show you my email replies to all those sites/foundations that follow her. .
Flattr
(untitled comment)
I didnt say that Internet video wouldnt work in that blog post, I said it wouldn't scale. Compared to TV, it still cant handle large audiences for most. In fact, you contradict yourself if you say it can.
do you think a small streaming startup can broadcast a live event to millions of people ? If you do, explain to me how that is going to work in an affordable way ?
As far as Youtube, i stand by what I said. Aereo thought they could change the law and couldn't. Youtube couldn't change the laws or economics, but Google could. So I ended up being wrong about them. But the logic was sound.
As far as entrepreneurs, few people knew my views on NN until the last couple weeks. Ive looked at thousands of deals over the last 10 years. Not a peep about NN>
So there goes that premise.
And why do you and others keep on trotting out the ridiculous premise that in 1995 i benefited from NN type rules. Nothing could be further from the truth. I had to pay for priority , i had to pay a premium to get access to dialup (which was under title 2), and to get access to the broadband homes and businesses. I competed with much bigger companies than mine and beat them every time because we out innovated.
You also put a lot of credence in "proposed rules". Which proposed rules and from who ? And where has machine vision been discussed ? You certainly havent discussed it because i wasn't referring to machine to machine communications and network management wont suffice for applications that cant have lost packets.
Your premise that only big companies can win is so outdated and ridiculous that you would think its 1968 and you just got fired from IBM.
No question you can find stupidity from every company, large and small including mine and yours, but over the past 12 years can you deny the amount of innovation that has taken place despite any and all efforts by ISPs to slow them down ?
You using your Facetime over cellular ok ? Has your network wireless performance improved over the last couple years ? Can you hear me now ? Has your wired broadband throughput improved despite NFLX going from nothing to 1/3 of primetime bandwidth ?
If you want ot look at trends, they are going away from big providers, not towards them. Texting fees ? Gone. Caps, going up. Not fast enough for anyone, but they certainly wont accelerate with more regulation.
Do i like that the big ISPs get to put all kinds of bs fees on us and in our bills. No. But i dont think regulation solves any of that
And we have 5g on the horizon. Do you think it will get here faster with more regulation ? Particularly given that all those FCC commissioners you see today. They probably wont be on the FCC when 5g hits the market. THink they will give a shit how the rules they make today impacts future tech ? That is if they can get them done before the senate or congress jumps in and makes this a political play they can take advantage of. Think that will get you the "Proposed rules" you want ?
And lets not forget that the ultimate fast lane app is also the most popular in this country. Its called digital tv. For many if not most it runs on the same cable into your home as your internet and provides a walled fast lane for content . What happens to digital tv if the proposed rules go a little bit too far because some people think OTT is the future and want to free up that bandwidth ?
thats where you are on NN. You got it wrong. You made the mistake of getting religious . THe foundation of the NN argument is what you believe will happen. You provide a few anecdotes from more than 10 years of history as a foundation that your premise must be true.
I try to work on what i know Im working on, what i know is happening. What i know Im investing in.
on most other things we agree :)
ok
No doubt. The distribution economics are somewhat different, but the difference is not nearly as big as you or Dan seem to be implying -- especially with Google and its own fiber ownership.
From MC>That is where I agree with Dan and disagree with you. Fiber is not a panacea. Its expensive. Just because you buy cheap fiber to peering points doesnt pre empt you from having to get in the rat race of always upgrading and investing in capital costs. Its just as variable a cost as renting bandwidth from someone else.
Plus, it doesnt solve the last mile. Google realizes this which is why they want to experiment with running their own last mile fiber. Which of course is right now just talk. It will be interesting to see how they report numbers on this.
You can peer all you want, but you cant control quality of service.You cant multicast across peers without huge hassle and expense. You cant even assure delivery to the last mile. Which is why Youtube used 3rd party CDNs to deliver live content. Fiber is nice. Everyone should have some, but its not free and its not cheap, and it requires constant capital upgrades to maintain. Just look at Ciscos new "save the internet" router. Its just one more upgrade in a long series of upgrades. And i will repeat, it still doesnt solve last mile issues.
And it doesnt solve unequal peering issues either. At some point with peers if you are only getting terabytes of data and not taking it back, you are helping your peer, you are hurting it. So the economics could easily change there as well
Also, while it is true that each user costs some money (I'd argue the "a lot of" claim), that need not necessarily be the case. It may be the case today for many providers (potentially not Google, again, given the fiber), but there are ways around this, such as by distributing the bandwidth load (via something like BitTorrent) or through multicast type technology.
From MC> The cost is in the details. The last peered multicast to consumer network was Broadcast.com's in 2000. Its hugely expensive to upgrade all the routers and the tunnels it takes for a stream are huge resource hogs. So ISPs are going to charge a huge premium to go through the process. I looked at creating a business just around providing multicast. It aint cheap and it aint going to happen. Plus, flash has just released their first mcast client and its for corporate (mcast is used internally at companies)
P2P is a red herring. It always sounds good, but is the least efficient protocol out there. Plus, again, bandwidth isnt free. Its just stolen, i mean borrowed from other users who usually dont even know they are doing it. Plus it requires a client, which for youtube to push on everyone would create more privacy and malware articles that could possibly cost them more than any amount of bw they could save. It just would be far more hassle than it could be worth. So i dont see P2P.
If you want the valued content that you mention , it takes an investment of millions of dollars per eps in most cases to work on network tv. (excluding reality shows). And the audience has to come quickly or they cut bait and run because the show cant be paid for.
Yes, that's the TV model, but need not be the model for the internet. In fact, it's quite similar to the discussions we've had about music. In the past, you *needed* a big record label deal to make it work. And they needed to put forth a huge upfront capital outlay. But the internet has changed those economics. The cost of creation has gone down -- and while it might not be *quite* as good as a big expensive studio, bands can be pretty damn good for much less money. Same is true with video.
From MC> No its not the same. Apples and oranges. You can still create music by yourself , anywhere and have it comparable to top quality professional music. Thats not the case with video. Plus musicians can still get paid for playing the same music that created on their mac at gigs. It doesnt work that way for TV shows or movies.
it costs more to create and your primary, if not only source is what you can sell the content for. Completely different model. Only thing comparable between music and video is that people steal it. Everything else is different
Unlike the old model (spend big, pull the plug quickly if it sucks) the new model can be more efficient (spend small, build an audience... keep growing the audience, and as you grow that audience you can increase your spend). That's actually better for everyone. And we're seeing that this works well in music, and it can (and does) work well in video as well.
Except that only works if the spend is pennies at a time. Which isnt going to get you professional content where the proucers/actors/camera people/directors/writers/gaffers/lighting people, etc get paid.
if its you and your buddies playing a song in front of your Mac and a microphone. That works. it doesnt work for people who are trying to make a living at it.
thats why you only really see talking head stuff like Fred work financially. its just fred and his pc.
Switching to youtube, there is one ENORMOUS difference between youtube content and network TV (and even cable tv content). Youtube NEVER pays for content up front. THey sell everything on consignment.
Indeed. Welcome to the new more efficient world. :)
Efficient for who ?????
Because Youtube never guarantees any revenue to producers, they are not going to get the vast majority of the content you suggest could be valued highly. Why ? bEcause content producers take on quite a bit of financial and time risk as it is. In the Youtube model they take on 100pct of the risk. IN the tv model, whether network or cable, the content producers typically dont create content on spec. They may do a pilot, but even that is rare for network TV. The Network usually funds pilots.
Sure. But now we're arguing something different -- and I disagree that high quality content doesn't go on YouTube. Many people do put it there for one very good reason: it's where the audience is. Sure, the majority of content on YouTube isn't high quality, but that's meaningless to this discussion.
From MC> The big lie of Youtube... thats where the audience is. The audience for who ? for what ? For youtube ? sure. For the people who pay youtube money to be promoted, sure.
For a couple videos a week out of the hundreds of thousands uploaded, sure. But again, 99.99999pct of the videos arent seen by anyone who wasnt related or paid by the person who uploaded it. I think you may miss that unless you get lucky and go viral, its EXPENSIVE to get an audience on Youtube. It just doesnt happen without a lot of luck.
And when it does happen and you get lucky and get views, most of those people look to get out of the youtube grind and graduate to TV or other mediums. Why ? So they can get paid for their work.
That also impacts how you look at the youtube financial model. Maybe they might break even, but they dont have any investment in content. They pay a commission for content. Which IMHO opinion means they are never going to get great content.
Again, they have a huge benefit: the eyeballs. It's hard to discount that.
From MC> Again, its expensive to get those eyeballs. Youtube knows it and charges content providers for access. Which turns your perspective upside down. To get those eyeballs for your content, you probably have to pay for the privilege
You know what has made Netflix so successful at getting content (even if they had to support windows) ? Its that they guarantee money to the content owners. You can get a guarantee of a minimum check which distributors of content LOVE LOVE LOVE>
Sure, but you're basing this on what the content owners love, not what the consumers love. Now, you can argue (and I'm assuming you are, implicitly) that if the content owners don't love a deal, then they won't fund/make the content. But that's showing a missing element of the dynamic market. The content providers that are going to succeed are the ones who better cater to consumer needs. It's what we're seeing in the music business. Trying to hold back from what the consumer wants is only an opportunity for someone to do it better.
From MC> COnsumers dont know what they like until its in front of them. Which means someone has to take the risk. Which means, when they do, unless it costs them nothing, or they have nowhere else to go, they arent going to youtube. they are going anywhere else they can. Youtube is cheap to get on, expensive to get eyeballs on
And I'm familiar with a few different production houses that are actively creating inexpensive high quality content for YouTube.
For demo purposes or to make money on YT ? Would love to see their work
You know why redbox got content at the beginning (before they got so big the big guys had to deal with them differently) ? Because they guaranteed money to movie distributors. Hell its why people protect their relationships with walmart, best buy abnd blockbuster. Say what you want about the future of those businesses, but they actually buy products and send you a check. You dont have to wait to see if someone buys your movie or show or someone watches it and Google sells some ads.
Yes, of course. And companies will work hard to protect those sorts of relationships. The only problem? The consumer doesn't care at all about how you make your money.
From MC> No question they dont care. But they do care about access and not all consumers want to spend their entire day searching through youtube. Not all consumers want content that was produced in a basement for free. Some want content that was professionally produced and would rather pay than spend all day searching. Which is why blockbuster makes more money renting DVDs than Youtube makes selling advertising around videos.
SO youtube as a businessmodel may be profitable and then some today , but its primarily because they take on ZERO product risk. They put it all on all those little guys that want to make any amount of money from the content they put their heart and soul into.
Yes. But Dan's argument was that YouTube couldn't be profitable and that no video producers could be profitable giving away content for free. Both of those are wrong, which is the point we were making.
From MC> I said may be profitable. I dont think they are either. I think even in the models they use for wall street they dont apply the overhead a standalone company would need to apply. But i wanted to be nice:)
and no content owner can make money giving it away for free. They may have some anecdotal success, but at some point the mortgage comes due and those who pay the mortgage producing content will have to get a job.. Dan is right on that front
What you're really arguing (I think) is that many people who try to create content on YouTube won't make money. And we agree. It's the whole "long tail" theory at work. Most of the folks in the long tail don't make money. Agreed. But that doesn't mean that free doesn't work. There have always been content creators who didn't make money. That's got nothing to do with free.
The point we're making is that you can still use free content to make money if you put in place a smart business model with it.
From MC> Lets define "make money" Can you generate 10k to 25k a year cranking out cheap videos for YT ? Probably. it will take a lot of work, but you can do it.
Can you make 100k consistently after your costs ? Maybe, but probably less than 50 of the millions who try will do it.
So it 50 people are proof enough, then you are right. I see everyone else that fails and that 50 or even 1k people able to make 100k a year is not proof that it works, but rather proof that it doesnt work
Re: Re: A little less religion, a little more thought
You say free to consumer has worked in the past, and it can work again. Correct ?
IMHO, your disconnect is in aggregate audience for an aggregator (ie youtube), vs simultaneous audience for network tv. Free to consumer on network tv was enabled because its BROADCAST. Each program on Network TV can reach 100mm people. No reg scheduled shows do, but the ad supported (yr 3rd party) comes because the scale on any given show is big enough to pay for most of the cost of the license fee (most network shows deficit fund).
That is completely different from the internet model. Video on the internet is not broadcast, its unicast. Each user costs money. Each live user costs a lot of money. I think that is where your example is wrong.
If you want the valued content that you mention , it takes an investment of millions of dollars per eps in most cases to work on network tv. (excluding reality shows). And the audience has to come quickly or they cut bait and run because the show cant be paid for.
Switching to youtube, there is one ENORMOUS difference between youtube content and network TV (and even cable tv content). Youtube NEVER pays for content up front. THey sell everything on consignment. THey take a percent of the ads they sell and they give you a pct of the ads. That may work with the people who are making content thay costs very little (and i disagree with you, even those who want to make money on their content, 99,9999999pct dont make money still.( But a significant number make some of their money back and thats better than nothing. Youtube has been great for those folks).
Because Youtube never guarantees any revenue to producers, they are not going to get the vast majority of the content you suggest could be valued highly. Why ? bEcause content producers take on quite a bit of financial and time risk as it is. In the Youtube model they take on 100pct of the risk. IN the tv model, whether network or cable, the content producers typically dont create content on spec. They may do a pilot, but even that is rare for network TV. The Network usually funds pilots.
So, where this all comes out is that Youtube ALWAYS plays with other people's money. They get theproducers to absorb 100pct of the production costs. IMHO, they arent going to get any good content until that content has been monetized or tried to be monetized EVERYWHERE else.
That also impacts how you look at the youtube financial model. Maybe they might break even, but they dont have any investment in content. They pay a commission for content. Which IMHO opinion means they are never going to get great content.
You know what has made Netflix so successful at getting content (even if they had to support windows) ? Its that they guarantee money to the content owners. You can get a guarantee of a minimum check which distributors of content LOVE LOVE LOVE>
You know why redbox got content at the beginning (before they got so big the big guys had to deal with them differently) ? Because they guaranteed money to movie distributors. Hell its why people protect their relationships with walmart, best buy abnd blockbuster. Say what you want about the future of those businesses, but they actually buy products and send you a check. You dont have to wait to see if someone buys your movie or show or someone watches it and Google sells some ads.
SO youtube as a businessmodel may be profitable and then some today , but its primarily because they take on ZERO product risk. They put it all on all those little guys that want to make any amount of money from the content they put their heart and soul into.
So while bandwidth costs going down is a great thing for youtube now. If we ever get to the point of a very cheap marginal delivery cost for billions of streams (download, thats notgoing to happen with live), then other companies will be in the position to put up some cash and lock out Youtube from content or force them to pay for content upf ront. Which they may be happy to do, but I wouldnt bet on it.
This is exactly how HBO changed the movie business. They committed to pay money up front to movie producers and tv producers for that matter.
So content isnt free unless no one else has valued it enough to pay for it up front. Even then, what is good is relative, so there may be some nuggets that come through the system. But the reality is, youtube assigns 100pct of the risk on the content producer, which means the quality of content you get is always going to be worse than the distributors (usually tv ), that pay for the content up front.
A little less religion, a little more thought
Pick any network tv show in primetime. Do you think any are there for zero license fee ? You think Dick Wolf produces Law & Order for NBC Universal for free ?
You think the producers of American Idol dont get paid ?
Dan is right, there is no money to be made on the net on content for 99.9999999999 of content, and people at some point stop working for free.
But his point still applies to broadcast. While viewers may only pay with their attention, and they may not even realize that they are the product being sold to advertisers (how is that for turn around. The networks pimp you out to advertisers and you give them your time for free...), the reality is that content is expensive to produce and it gets paid for before its on the air.
Content is not free. Its just a question of who pays for it
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