Why The Economist is Wrong About YouTube

Back in 1998, I arranged a $10m start-up financing for a startup created by a bunch of ex-Economist editors, journalists and sales guys.

Aside from the fact that my money is still in the company (so much for betting on economists-turned-entrepreneurs), I have nothing but good things to say about The Economist. It's usually a great read.

However, the recent article on Economist.com about YouTube displays some of the thinking that used to drive me crazy back at those late-nineties board meetings (example: "we should charge exactly what the newspapers in the same location are charging for classifieds").

If I learned one thing from those sessions, it is that you can't necessarily judge the potential long-term success of a new paradigm by the market-entry, or influence, of old-paradigm power-players.

Take the article's opening paragraph, for example:

"It has been a terrible month for Google, the biggest search engine and the internet’s reigning superpower, and for its subsidiary, YouTube, the pioneer and precocious leader of online video. Users may love them, but the old-media companies, feeling increasingly exploited, loathe them, sue them, and gang up on them. And that matters, because neither Google nor YouTube, as quintessential “new-media” companies, own any of the content that they organise so well."

So new media Google/YouTube doesn't "own" the content. Big deal. Obviously the author of this article somehow missed the mirrored cover of Time's "Person of the Year" edition. While Google/YouTube doesn't "own" the content on its site, neither does Old Media.

Last time I looked, which was today, via the YouTube player built into Authentium's new ESP Elements framework, the YouTube home page had on display a collection of two-minute clips from would-be independent filmmakers, college pranksters, high school geeks, Russian/Latvian dancers, Chinese lonely hearts, and pet owners: in other words, content from the "MeTube" Generation. Except for one contribution based around the BigBrother show, there wasn't a single old media contribution in sight.

If you subscribe to the fairly well-proven (by SEO experts) theory that 80% of navigation stems from the entry point to a web site (usually the home page), 80% of the YouTube videos watched and rated yesterday by YouTube visitors did not belong to either YouTube, or Old Media, but instead were owned by other YouTube visitors.

Which means YouTube is playing in a different sandbox - QED: Old Media can make all the announcements it likes, but YouTube will continue to do just fine, until some other company comes along with more interesting user-generated content or a better fulfillment system.