Gold Rush Coming!

If you have any internet grey hair (you have been around technology for at least ten years) and been watching all the to do about the Web 2.0 (YouTube, et.al.) fight with the media rights owners (Viacom, etc.) over content rights violations, you probably have an "I have seen this all before" attitude.

And you have.

And if you have been around for less than 10 years, all you need to do is wander over to your local arcade and play a good old fashioned game of "Wack-a-Mole" (I have not seen a good emulation online, or I would point you there) to get the picture of what is going on.

The big rights players are hording their good content away from the internet because they don't know how to monetize (they have the wrong/same people in place managing their digital ventures). The Web 2.0 guys are creating markets of meaningful size, but have trouble with customer loyalty and getting rights content type CPM from advertisers, so they need a strategy to get that content in. They have investors demanding returns (most took way too many $ and find themselves hoping for valuations that will never come- that's the subject of another blog to come).

But when the two groups speak, it is like a 1980s style Reagan/Breshnev discussion or worse. Tech guys don't speak media language and vice versa. The Ad guys want it resolved, but they are fearful of the rights relationships that revolve around TV so they stay away, hoping the situation resolves itself.

But it doesn't, and it all heads to Court. In this Jon Stewart style evolving comedy of miscues and errors (I thought you might like the comparison since the Viacom-YouTube debate is mostly about Daily Show content), this is the funniest part. Once in Court, the idiots are in control of a situation that goes from a Wack-a Mole game to something more like trying to hold that whippet gas in back in college (if you never tried, I am not advising you do...perhaps a different metaphor- herding cats!). By the time all the non-tech lawyers and judges get around to considering the issues, the ecosystem has moved on, the issues are no longer relevant, some people are out of business and the Mole has appeared from a new hole!

Think I'm overstating again? Look at Netscape v. Microsoft (those of you under 10 in internet age may not remember Netscape, but it is on Wiki, so go there)...the issues that went to trial were a joke. Microsoft knew that would be the case and they laughed and danced their way around for a decade, while their cash horde grew to $50B!

So, if the Moles are going to keep getting wacked, why keep trying? Because the $ coming from Ads is growing at an amazing pace (search $ paid out by Adsense are up 70% year over year on a per click basis and keyword prices are up 3-4x) and the expense of maintaining a legit internet publishing business is moving toward $0 at a pace faster than Moore's Law!

Assuming the YouTube syndication strategy fails (seems likely at this point), where does the mole pop up next?

There is a land grab coming of unprecedented proportions with web publishers churning out thousands of sites with new brands, Web2.0 integration and editorial solutions that will not be so easily swatted away. The internet will support 100s of ESPN type businesses of all sizes and all profitable, focused on any vertical you can think of, including camping out in the backyards of the major rights holders with winning legal strategies.

So, hitch up your wagon and join the gold rush. There has never been an easier, bigger opportunity. But where and how to stake the claim?

I'm already in in many places, so soon I'll tell you about that play, but the critical component of this wave will be staying power- not venture capital. Venture Capital leverages staying in the wrong claim with the wrong team. This land grab requires flexibility... so VC capital is silly to take.

Staying in the game because you love it and know how to operate to a profit is where the wins are. Do it once, then do it 500 times. Then you have a meaningful business. And you own it ALL!

Drop me a note if you want to know more.

New Media Calls for New Sports and New Coverage

Have you noticed the slow pace at which the existing sports leaders have adopted any meaningful attempts to bring their products to the new media? In fact, if you look at all the majors (MLB, NBA, NFL, Premier League Soccer, etc.) there has been no progress at bringing products online in TEN years!

While online growth in general has been astronomical and new solutions and products make clear the unparalleled growth of online as a marketplace, advertising channel and distribution network, the major sports have held back. If you have read this blog before, you know that I have attributed this reluctance to lack of foresight, old-minded execs who don't use new media and other trite, non-original analyses. In fact, one old media exec told me he thought I was sounding a bit pedantic.

So, I have been doing somewhat of a deeper assessment on this issue recently and have come up with another explanation, one that I believe points toward new, disruptive markets and that is based on very real growth opportunities.

The core of this new analysis is that rather than try to fit old sports into new media using existing events developed with old media in mind, it is time to develop new sports with new media in mind. ("New Sports" can include permutations of old sports). We need to assess what new media does well and tailor the sports opportunities so that they take maximum advantage of the best of new media. So, big arena events like football games that are so great for old TV based media may not be right for the new media. NBA games might work perfectly well on HDTV, but interactive one on one tournaments in front of smaller crowds at suitable locations might be better suited for new media.

I saw the light last Friday night up in Reno, NV, that known center of all things Sport! I was attending the Pole Vault Summit (as Dad of someone who wants to fly over 20') and accidentally stumbled into the Summit's Friday nite extravaganza where I saw the light.

What I saw was all at once shocking, extraordinary and inspiring. More than 2,500 people were crammed into the Grand Sierra Resort's Grand Ballroom to watch the USA's best/elite pole vaulters compete in a 'pole vault only' event on the stage of a Casino!

Men's and Women's competitions were held simultaneously with criss crossing runways and ten vaulters of each sex vaulting about 30 seconds apart to ear blasting tunes of every generation since Wodstock and an ongoing, interactive commentary that urged the vaulters to interact with the audience. Neither vaulters or audience disappointed.

Since the audience was comprised of every serious pole vaulter (and their coaches and parents/family) in the USA, the place rocked! They vaulters became entertainers, inciting the crowds with great personalities, spectacular athletic skills and perfect, beautiful bodies. The audience interacted, participated, appreciated and had a rousing good time!

And it struck me that the organizers of the Pole Vault Summit have struck gold!

Rather than restrict this amazing event to the sinking anchor of US track & field, they have declared the event's independence and reconstituted its presentation so that it is inspiring to a new generation of US vaulters and integrated with and suitable to the media that the vaulters use!

How did this happen and where is mainstream media on this opportunity? (I'm guessing you saw nothing about this on the 6 o'clock news).

This happened through the vision of one unselfish man and one institution that was willing to allow him to go do something wonderful! That man is Bob Fraley, world renowned track coach at the institution, Fresno State. Over the past 20+ years, Bob pulled together this activity to the point where it has its own momentum and is a Sport unto itself! Check it out.

The point of all this is that any sport can be reconstituted to inspire the core of its audience in ways that suit and interact with that audience. New media can be at the heart of this, with enabling technologies, distribution and $.

What new media does is make that audience relevant and interesting to sponsors and marketers and as a marketplace, by bringing people together. When knowledgable, dedicated people like Fraley are in charge, they bring out the best in sport and present opportunities that those of us in the marketplace that is new media have been dreaming about!

Now, who is going to bring this type of sports enterprise to the masses? We need a Roone Arledge of new media.

Any takers?

2006- the Year of UGC- What does it Mean for the Industry?

UGC- User Generated Content and I promise not to use too many other acronyms!

As you probably know, Time Magazine awarded its "Person of the Year" award to "You" in honor of what You are doing in generating the new Internet Content with User Generated Content. They even put a mirror on the cover so that You can see Yourself!

It is time that this blog address some of the issues raised by UGC and its implications for our digital media industry.

To be the cynic, UGC has been around since Day One of the Internet. I had my first blog when my Windows 95 system made FTP easy and Netscape Navigator Gold put out the first WYSIWYG editor. Not much has changed (technically) since then. The publishing step is easier and you don't need FTP, but you still need an idea and the focus to post it as often as possible and that is the hardest part.

MySpace and You Tube are not the first UGC enablers to hit it rich, either. YHOO bought GeoCities in 1996 for a ton of cash!

The difference is the proliferation of easy publishing tools, services and digital devices to produce content beyond the written word. Yes, cheap digital cameras have made everyone a producer!

While it is easy to understand why so many are producing, it is harder to grasp the reason that people are spending so much time looking at other UGC. The social element of this inserts a business model that formerly did not exist. The big ($60B?) question is whether this is hurting old, produced media (the rights protected versions) and what the Big Boys should do (if anything) as the result of its emergence.

There is a long advocated theory in digital media that there is never an emerging network or channel that is bad for the existing media, that media will consistently expand to fill new opportunities and that old channels will survive. While that sounds like some bullshit coming from the mouths of old media execs trying to save their skins, there is definitely some validity. Television as we know it is not going away. Radio continues to be strong as does in Theater movie entertainment. New Channels mean new outlets and new ways to cross-market as the channels develop. That does not mean that the content businesses that inhabit the old channels will survive. They need to recognize the new opportunities and address them, service their customers wherever they reside and use new media as both new $ opportunities and feeders for old $ plays.

So, UGC is definitely HURTING Old Media because new customers are looking at content Old Media has nothing to do with. It is as though the old media boys are missing out on an entire generation of customers.

Why are they missing out? It is simple....it is because they are fighting the new channel and its fundamentals. In short, people want to see lots of content, see it where they want it, how they want it without paying for it. Rather than riding this roaring current, old media is fighting the rip and while they are not drowning due to the continued vitality of the old channels, they are not participants in the new media play. Worse, they are allowing the biggest disruptive strategy in business history to take a stranglehold around their throats.

If you have read this blog before, you know that I believe that success in the media business is all about disruptive strategies. The old media boys have set themselves up for disruption and if there is a danger that UGC brings it is this. The next play for UGC is the living room and the television set. Interactive TV will mean UGC and free content on the TV and the rights boys are likely to be found with their pants down again.

What should they do? Forget the fight. It is lost. UGC is here. So, instead of fighting a losing fight, ride the big wave....put every bit of image and clip content you possibly can into the UGC world for syndication to any site that wants it (hire 50+ UGC editors to do nothing but put your content into this world). Use YouTube and MySpace as marketing vehicles for going to movies and games, watching shows and games on television and getting consumers to buy rights to better content online. And One last thing....wake up to the fact that users have huge systems that can embrace significant applications. Capture the ardent fan and his or her system with a proprietary client that DELIVERS your amazing content to the desktop along with your ads and upsells! And, help the fan create their own UGC relevant to your content and post it to your environment so that they STAY HOME with you.

Yep, use UGC to create the means by which you acquire and strengthen customers, make $ and siphon the UGC enthusiasm into your world. In short, develop and execute a strategy to disrupt and bypass the biggest disruptor in history- Google!

More to come....

Why do the major rights holders miss every dotcom opportunity?

NBA Commissioner David Stern Testifies before Congress about steroids (Getty Images)

You see it over and over- a new tech service comes to market with a great idea on distributing content to consumers (Yahoo!, Real, Napster, Google, Tivo, Bit Torrent, YouTube...). The content rights holders hold back from the service attempting to impose their traditional market metrics (big cash up front) on the new service. Consumers hijack the content anyway and put it into the new service. The rights holders scream and hire lawyers. If the service acquiesces and does business the way the rights guys want (RealOne, Napster, Bit Torrent(tbd)...) the service dies, the rights guys win the near term battle.

With the smarter players, the rights issues are somewhat subtle and often involve the creation of a "piggyback" service unique to digital media (Yahoo!, Google, AOL, iTunes, Tivo). On unfamiliar turf, the rights holders shake their heads and put their hands out, begging for a morsel! The tech services laugh, having created a service that people love, with or without the rights holder content! They send over a few bucks, but, their lifeline in no way dependent on the rights holders, they forge ahead with public market strategies that realize real value that could easily have belonged in part to the rights guys. What they fail to do is analyze the situation and act in their own best long term interst- the success of new channels and the realization of shared value!

Think I'm crazy? Consider this- who made out the best in the Google IPO (other than the VCs and founders)? If you are thinking Yahoo! you are right- they got more than $1B in value by asserting their "rights" in a way that did not threaten the life of Google, just made clear that where YHOO IP created value, they should get to share in that value! This is a concept that is lost on the NY/LA media guys, all of whom think their universe wll be king, failing to understand the need to PARTICIPATE in the Webocracy to win big. Yahoo! got it because they have smart guys on their Board!

Want to see a disaster in failed web strategies? Look at the web sites of any of the major rights guys (NFL.com, NBA.com, all the TV shows and movies, the record guys (though they are more advanced now out of necessity), MLB.com and so on). Every one of them has the same strategy they launched with ten years ago. In every case, they have failed to realize the potential upside that their content naturally brings because they think the computer is a TV and they want to be the portal for their own customers! The essence of the failure is that they lock down their content on their sites, force consumers to go there to get the content and ignore consumers who don't get there! In short, they are all trying to be Portals, but failing because they ARE NOT INTEGRATED WITH THE WEB!

What should they be doing? It is very simple- just go look at the success stories on the web and EMULATE! Every rights web site should be a syndication portal first and foremost. Give consumers and webmasters all the content they can possibly want- especially stats, images and short clips- to post anywhere they want any how they want. The goal of the syndication is eyeballs first, ad revenue second, right fees much later on, after the channels have been created (pull out the old playbook and follow the ESPN play!). After syndication is firmly in place, with broad distribution and availability of content, then you can return the focus to building nice proprietary web sites, the singular purpose strategy employed all these years!

When you have a treasure trove of content, you can analyze how to use it to meet all of your goals. The issue is understanding what those goals should be and being able to act in your own interest, something that the old guys in new media fail at every time because they are so locked into their application of TV strategies to the internet.