Category: Video

It’s tough to bank on Google

~ michael_msft ~ Leave a comment

It’s Google I/O time and it’s another conference, like WWDC, that I wish I was attending. Despite that I am not going, I still need to pay attention since Google will inevitably announce something that I will have to consider building on or for. Android is still the biggest thing to come from Google, and startups, like Spuul, have to build on android. There is still some schools of thought that say stick with iOS or start with iOS and deal with android later. However, if you are doing anything at all in Asia or the emerging markets you have to be on android. Period. But I insist that the money for paid services is still in iOS. Android users just don’t pay the way iOS users do – not even close.

Like with WWDC, Google will spend the week announcing a ton of things – I won’t even bother trying to play soothsayer since I don’t think it makes sense to. But I am more sensitive than I have been in the past at taking Google products seriously.

I think the biggest problem with whatever Google will announce is deciding which products or platforms to bank on. I see android TV is already getting some pre announcement love and folks are blessing it as the new thing for Google and it’s love affair with TV. Let me be first the first to say I hope it works cause god knows the current TV ecosystem is fucked. My money is still on Apple TV cause it works, it’s dead simple to build on and we know Apple values ecosystem lock in which means Apple TV is here to stay.

Android TV? Who the hells knows. Google TV was also heralded as the savior for the TV ecosystem and the next best thing to sliced bread for developers working around the TV. What happened to it? It was promising but in typical Google fashion it was essentially a beta that never made it out of beta. I understand why Google does this but it makes it hard to know which beta projects to depend on or bet your company’s development dollars on. Once bitten, twice shy.

I am sure some big companies can jump on every new Google dream in hopes of being the front runner and to ensure that big companies stay big but as a startup I don’t have that luxury. We actually semi invested in Google TV cause it was easy to stick to HTML 5 and HLS for a host of Smart (which we all know means hella dumb) TV platforms. Google TV was almost a reference platform of sorts and mostly just worked – wish I could say the same for the supposed Dumb TV platforms which are some of the worst shipping ecosystems of the modern day web.

But Google TV was a dud and once it looks like a dud the normal Google response is to not really kill it, that’s far too easy for them, but to let it just limp along pretending to be alive but we all know it’s actually the walking dead. Then Google got Apple envy and decided to make chromecast which on paper, plus based on sales, seems to be rocking. But some studies are showing that it’s not being used much. This doesn’t surprise me cause unlike an Apple TV, chromecast is not super user friendly. Yes it works, but it is a pain to setup and is buggy as hell. I am actually hoping that Google will re affirm their commitment to it during I/O, fix all the bugs and double down on it since I think it has legs.

As a techie though it is shocking how much Google forgot to ship with chromecast. Security for streams was not something they focused on but has improved some with updates. At Spuul we still find that HD content with encryption creates brain freezes faster than swallowing a Magnum in one go. The real shocker with chromecast though is there is no easy way to serve video ads with it. Yes – a video product from Google that doesn’t even have a premium content focus has no hooks to any of the standard video ad platforms – not even Google’s own video ad platform. I find this quite comical since if they aren’t going to focus on premium content, something folks pay for, one would think they would make it easy to stream free content with ads.

I hear Google is going to announce something new on the TV front, which I guess means Google TV is dead, but this action will call in to question what the plan is with chromecast. My guess is Android TV has different goals than chromecast so one would hope both platforms are a go and will see proper investment by Google. However, it wouldn’t surprise me to see Android TV getting all the attention while chromecast starts to whither on the vine.

I will be watching the announcements and doing my best to read the tea leaves as to what Google makes that actually will still be going strong in a few years.

Time to update my Google minus account via my Vizio Google TV chrome browser.

Another tech article written without the tech…

~ michael_msft ~ Leave a comment

I always find that when someone makes some sort of sweeping statement they should at least be able to support their statement with enough technical reasons to make a convincing argument. Usually TNW gets it right but on this one the writer failed pretty miserably.

http://thenextweb.com/dd/2014/04/19/rip-flash-html5-will-take-video-web-year/

First off let’s admit that flash is doing its job with video pretty well which is why it hasn’t died on the desktop as quick as everyone claimed it would. For reliable, secure and performant desktop streaming video – flash is still alive and well and won’t die in 2014. It will die only when there is a satisfactory replacement for it. At the moment there is not.

With OSMF framework players and all the plugin work going on – flash is still powering most of the world’s steaming video and is doing a fine job of it. Flash is not perfect and many would love to replace it, including me, but there is not a suitable production replacement at this time.

Is 2014 the year for flash to die. Not likely.

All this aside it usually helps to understand the tech more and to correctly understand what is keeping flash from dying and what might take its place? Also it is important not to lump mobile and desktop into the same bucket and pretend it’s all the same thing – cause it is not.

For starters mobile was never going to use flash but at the same time mobile is not using HTML 5 as a replacement for it either. Most premium mobile video apps are using native code and players – not HTML 5 anyway. I still feel native offers the better user experience and better streaming but people can always argue otherwise.

However lets cut to the chase as to why desktop is still dominated by flash and why mobile is dominated by native video players – it’s for one simple reason and one the author of the article didn’t even talk about which is security. I will delve into this further but for the moment I will use the term security versus DRM cause in my opinion they are not the same thing. Currently HTML 5 has no cross browser standard for implementing secure streams so that whatever is streamed is not easily stolen. Until this is fixed flash won’t die and native code will trump HTML 5.

I think the most promising work is around MPEG-DASH + CENC common encryption scheme. Dash is a new way of doing streaming media – kind of a better form of apple’s HLS and the CENC work is to come up with a cross browser of way of encrypting it. If you talk to folks in the biz – this and the new h265 stuff are getting the most attention but none of them would promise you a 2014 delivery date. Given that, it is ludicrous to purport that flash will die in 2014 since the replacement for it is not ready.

Now that we have covered that flash is not dead yet it is worth spending some time on the whole DRM debate cause I think it is misunderstood at times. DRM to me is usually associated with the notion of buying some content like a cd or a DVD and being prevented by tech from copying it or watching it wherever you want. I think if you have bought something you should be able to copy or watch where you want but you shouldn’t be able to sell it again, stream it for profit or make copies for others who might sell it. So in my opinion if you buy it and you want to put it online for others to pirate it then it is wrong and if tech can help prevent that it should. Problem is that same tech can sometimes prevent the person who bought it from using it the way they want. That is the bad part about DRM but that aside this is different from security.

Security in my opinion is the tech to prevent someone from stealing it who didn’t pay for it. It’s that simple. Meaning if you pay for a streaming service then you should be able to watch it on all the devices that service offers cause you paid to do so. However let’s say you want to make a copy of the movie to store it for later or to give to a friend. If the service does not offer that then in my mind the user doesn’t get that but if the service never purported to offer it then the user has to live with those parameters. Some would say the user should be able to then take the movie to do with it how they please but to me that is the stealing part. Streaming services are not selling movies but selling the ability to watch where the service is offered. Normally this is why subscription services are cheaper per month than buying movies.

Others would argue that anything on a screen can be stolen so why bother trying to protect it but that is an easy one to answer. If you are an independent film maker and you debut something on a streaming service you are hoping that, although it is never 100 percent, that the service is not an easy source for people to steal the content. Otherwise the movie is better off in the theaters versus streaming. Any company who is in the business of streaming doesn’t want to lose this relationship with the content owners so they try to ensure they can offer a safe platform that does not contribute to the overall piracy problem.

So companies in the business of streaming have to take security seriously and in most cases security is not the same as DRM because the goal is to not make it hard on people who pay but to prevent those who don’t want to pay from petty theft. I personally think stealing streams is theft and is no different from stealing a book or a meal. Taking something you don’t want to pay for doesn’t look any different to me for a physical item or a digital item. It’s theft. Pay for it. If you don’t want to pay for it then you can’t have it.

So for the moment flash offers streaming companies a safer place to stream movies than HTML 5 does. Yes it will change but not this year.

The Black Box from the developer perspective

~ michael_msft ~ 1 Comment

This is a great post :: http://stratechery.com/2014/black-box-strategy/

WHY TV IS SO ATTRACTIVE
As I’ve written multiple times, the scarcest resource for consumer tech companies, especially ad-supported ones, is user attention. There are only so many minutes in the day, and their consumption is zero-sum: a moment spent doing activity A is not spent doing activity B, and then that moment is gone.

Meanwhile, TV continues to monopolize a significant amount of that user attention. Although digital products have overtaken the amount of time spent on TV, primarily due to the accretive time spent on smartphones, the absolute time spent on TV has remained stubbornly persistent at about four-and-a-half hours per day per U.S. adult (source).

That four-and-a-half hours really is the gold at the end of the rainbow for tech companies: just over the next hill/technical hurdle, yet never actually attainable.

TV really is a cool spot to work in – or video to be more blunt. However what really annoys me is that every article from a tech angle is normally very US centric or US content centric. Of course there is a reason for that – America is where the best content is coming from, where the most ad dollars are and where most of the tech companies playing in the space reside. No argument there but the world is not just America and some of us are playing in the video space from other parts of the world with the hopes of attacking the global stage.

I won’t do a Spuul sales job here but just state that we are global and we are doing it from Singapore. Not easy but fun.

So the article breaks down the TV battle by naming the dominant players who are hacking on the problem. What is telling to me is what or who is not listed – Smart TV’s. I think in theory if you are skating to where the puck is going then possibly you can leave them out but if you are dealing with the video space today you can’t. They exist and users want to see your app there on whatever Smart TV they have but boy, oh boy what a mess. I don’t want to bash here but we know why most of them are not listed as players for the future – they are not going to make it in the future. Their ecosystems are just brutal – they want a cut of payments but they don’t have payment engines. They want a cut of ad revenue but they don’t have ad ecosystems. They have brutally ancient build and deploy systems that look like the early web development days. Frankly – they build shitty software and they are at risk of just going away or being dumb glass. They could fix it but it doesn’t seem like they want to.

Moving down the list we get into Apple TV:

I agree in that this is the one to watch – I don’t say this due to apple fanboyism but mostly cause it works well, they distribute internationally and for developers this stuff really is mostly magic. It just works. The work we go through to get chromecast to work is night and day when it comes to Apple TV which is dead simple. Apple has room for improvement though. They need to get into carrier billing, they need to open up their stuff for the rental market, and they need to open up Apple TV to apps. I don’t see all this happening but it would be awesome.

Amazon:

I don’t have a fire to play with so I can’t say much. Usually with Amazon though their international focus is lacking but when it comes to being open and such they do a good job. Since Amazon has video I find working with them tough because they favor their stuff and then America – but for them to win I think they need more content players on the box. I think if Amazon could make the fire really awesome for developers it would help but that remains to be seen.

Google:

What can I say but keeping up with Google and TV stuff is challenging. There was google tv the web based stack, then the Android 3.2 made for tv stuff, then chromecast and now supposedly a new Android TV. Very hard unless you have insider status to get good info here. They favor America for content and partners and their international stuff is opaque. But the hardest part with Google is they compete with all of us using Youtube, they reward piracy and they make it hard to want to go deep with them but you must go deep with them. There is no choice. On the plus side they have a better ecosystem for developing, they have some carrier payments, they are being open about other payments in android apps and they tend to try and break down the incumbents. We see this with adx, chromecast and the like – so Google is evil but you must work with them on some levels. Android is huge – bottom line. I hope Android TV is killer, truly open and Google courts international developers at some point.

Roku:

Roku is always the one I find interesting in this matrix – first off they are only in America and UK. Of course big markets but it can’t stack up to the other global players in any regard. Worse though is since being invested in by DISH the entire international content library is controlled by DISH. So if someone like Spuul wants to get on Roku we have to go via DISH who usually says no cause they have their own international content packages that they foist onto Roku. So when it comes to Roku being a player – I say not until the DISH deal is done. Roku is one of those funny things that purports to want to give the best experience to users but is really no different than a cable company deciding what you get and what you don’t. Roku claims now to be gaining ground by getting into all the TV’s but I don’t buy it. They should have opened up when they had the chance and gone big – now I think google and amazon will have their way with them.

Microsoft:

Oh what could have been. To me they should have created something akin to the media center PC by creating a cheaper version of the XBOX just for the TV but they wanted TV and Games – both suffered. Now they appear to be tilting back to the gamers which means the TV will suffer. XBOX is cool but MSFT has to step up their game or build a home entertainment to rival the others. I will say this about them though – working with them is getting easier and they are trying hard to build stuff for media companies. If they open up playready DRM more and really cloudify the DRM plumbing then they could become a platform for streaming companies. Time will tell.

All in all the streaming world is booming but to me it is very US centric and I am waiting to see who will change it or maybe it can’t be changed but if so then I will be watching what the international players do more than the US centric ones since the playbook seems pretty well known at this point.

One app store to rule them all?

~ michael_msft ~ 5 Comments

Not talking about mobile phones but about TV’s. I won’t hide my disdain for the TV ecosystem and the supposed smart TV mess. Nothing smart about it really. I was recently at a telco in Singapore on their pipe, meaning a very fast line, using a new TV and when I clicked the app store button I looked at a spinner for about 3 mins. Imagine doing that on a normal internet line.

This TV stuff is a mess. Apple TV, Roku and Google are trying to cut through it but all have their flaws. Apple is Apple only, Roku is not an open platform and Google didnt make chromecast as easy as implementing AirPlay is for iOS. Yes I know chromecast is android and iOS and that it has some sense of apps but they didn’t make it dead simple to build on. Bummer. They also did not take into account DRM and encryption as much as they should have.

So the TV’s and their app stores will still exist and they suck but they are not going away just yet. So I am liking a little of what I am hearing from Opera – yes Opera. http://www.operasoftware.com/products/tv-store

Opera wants to try to build one TV app store and then get various TV manufacturers and OEM’s to embed it. Then you go to one app store, QA it and launch it – hopefully getting all the platforms that Opera is running on. Still a pain but not as bad as going to each TV vendor for each QA and legal process. Yes – legal. Unlike iOS and android app stores you have to sign contracts that lawyers make. It is a silly, silly process.

Can Opera do it? I am not sure. I am cheering them on though.

You add that Roku is doing the same thing with their stuff by getting it into TV’s. True but the Roku platform is a proprietary non HTML stack and they don’t take all apps due to there cozy DISH relationship. So Roku might have a similar plan as Opera but it won’t work is my guess due to the way they have tackled it.

We shall see.

I still want the TV is dumb glass scenario and I just project on it. One can hope.

Thinking about TV’s

~ michael_msft ~ 1 Comment

The TV ecosystem really is a mess. What I am talking about is the way consumers can easily consume OTT content on their TV set.

I myself use Apple TV and I mostly love it. I can throw anything from my iOS device onto it, I can buy things from iTunes, and I can use some of the apps on it to watch things but I must say I don’t use it that way much. I have played with Google Chromecast and it works well. If only Google would open it up like Apple TV to developers to cast to it. It is funny to me that in this regard Apple is currently more OPEN than Google.

I was reading Benedict’s latest Mobile newsletter for this nugget:

YouTube ‘Pair’ – turn the YouTube app on your smart TV into a mirror to whatever you do on your smartphone. This approach seems to me to make the most sense – use the sophisticated touch screen in your hand to control what appears on the TV and make the TV itself ‘dumb glass’ – whether it’s via Airplay, Chromecast, YouTube or something else, either embedded or via a cheap HDMI widget.

What I love is the dumb glass comment. This is really what we all want. The ability to easily throw on to the glass whatever we are doing on our mobile phone, computer, tablet, or device connected to the TV. What we don’t want is to click a button, with this shitty remote, to bring up a plethora of things we don’t want, and an app store that is hard to search saddled with the performance of a 1990’s computer. Looking at you all the Smart TV platforms in the world.

Sure – maybe someone wants this but I think it is mostly just the TV manufacturers wishing for an app store economy like what Apple and Google have but they can keep dreaming because they will never have it. And FYI – the economics they demand from the developers are worse usually than what Apple and Google offer. So the pitch is not very good. For example – asking for a cut of payments when they don’t even offer the payment engine.

So where do we go from here? I expect the TV guys to keep pushing since they seem to claiming successes like this: http://www.broadbandtvnews.com/2014/01/06/samsung-declares-a-million-smart-uk-users/#more-96531

However I am guessing we will see more of Apple TV and Google chromecast, Roku and everything else trying to cut out the TV for something easier to use. Of course Roku is trying to land inside the TV but the end result is the same. Problem with all this stuff is there is no real cross platform standard to adhere to. Google does it one way, Apple another, Samsung another and of course Roku uses their own stack through and through. I won’t even get into what each TV stack has – every set is like a totally different platform. HTML 5 is the tool but requires a lot of cross platform troubleshooting.

Users want to walk up to their screen and just watch shit. Purpose built boxes help make this easier and Google with Android TV is making this a very possible reality. Apple needs to open up Apple TV to apps and speed up their position in the home cause Google is moving faster than Apple right now when it comes to the home. Looks no further than the Nest acquisition as an example of that. My guts says the Apple users will have an Apple home and the Google users will have a Google home. Of course Microsoft could disrupt this with X Box but it is not really open enough in my opinion.

Users want to stream on their TV – right now this is a mess.

Let’s see what happens next.

Crazy week in my World!

~ michael_msft ~ Leave a comment

First up we have Rakuten buying Viki. http://blog.viki.com/2013/09/letter-from-vikis-ceo.html . This was probably be the biggest tech news for me personally. One I almost went to work there so I follow Viki very closely. I guess you can also say I am in the same space as them but much farther behind in our maturity but what happened to Viki is great for a startup like Spuul in Singapore. It shows the video space is hot, you can build something global from Singapore, exits can happen and that the dream is alive.

I am very curious to see what happens next to the company, who stays around and what Rakuten does with all these disparate pieces that are supposedly tied back into e-commerce. People say it is like Amazon or Netflix – not sure I see that yet. I can imagine the Amazon comparison but where is the cloud stuff? Either way Rakuten is a force and now Viki has some serious backing and is supposedly somewhat independent. All debating aside – congratulations to the Viki team for an amazing exit.

Next we have MSFT buying Nokia. This one can and will be debated till the cows come home. It essentially always needed to happen – why now? Is it about Ballmer stepping down and Elop coming home. I don’t know but I think MSFT has a huge uphill battle to make Windows Phone competitive but apart from them – it is all android and iOS, so I do hope MSFT can shake it up a bit cause it will be good for the ecosystem.

Stoked to be mentoring over at http://jfdi.asia this year. Should be fun and great learning experience for me.

On the Spuul front – we just launched our biggest TV deal yet :: http://blog.spuul.com/2013/09/star-plus-serials-now-available-on-spuul/ . Lots more coming as well.

All in all an exciting week locally and globally – now over to Apple for next week!

Android is a bigger ecosystem but takes more work

~ michael_msft ~ 10 Comments

Yes – I read Daring Fireball and tend to agree with Gruber most of the time – because we share the same ideology on many things.  When Gruber talks about the whole Android vs Apple war I tend to carry a different opinion in that helping to build a startup that has huge aspirations, is very big on mobile and is working on hard markets –  we have no choice but to support Android. The idea that we would or could only develop for iOS would be suicide given how but the Android market is.

We did go iOS first cause it was easier, is better for video and we had a rockstar iOS dev in our midst. I don’t think our experiences are the same as every developer in the ecosystem choice because we are working in video and I do think we have issues that are harder than what most app developers have. Our experiences map pretty closely to what the BBC is experiencing so when Gruber linked to this BBC post – all I could do was nod my head in total agreement.

I can’t get into a lot of the details since as a startup we have to keep some things secret. We are the leader in our space and we have learned everything through trial and error – the school of hard knocks.

The bottom line is the Android ecosystem did not ship with any across the board way to do secure, streaming video. Apple did. End of story. I am guessing Google sat back and decided since everything is open, the Android world didn’t need secure, streaming video. Problem is we do. So this created a burgeoning side industry where the CDN’s, Microsoft, DRM companies and video toolkit companies could develop various ways for Android to securely stream video. With Apple we don’t need these extras. So someone like Spuul had to spend a lot of time finding a cost effective way to match what we do on iOS. Not easy. This is the part the video guys have to deal with in the Android world that developers not dealing with video will NEVER see. This alone is why the BBC needs a larger team and why people like Spuul need to spend more time on Android than iOS.

Apart from the video stuff we notice right away that customers with Android pay less, complain more about having to pay and are more cutthroat in leaving comments in the Play Store blaming the developer for everything that is wrong in the world. Fortunately we are able to respond to the comments and we try to for each and every one. I find that it helps to respond to the good and the bad – since we have started doing this our rating has gone up and we see less comment trolls. I tend to look at it like the school bully – if you stand up to the bully he becomes less of a bully. It is a shame Apple has yet to allow developers to respond to comments. This is one area where Google Play is so much better than the App Store.

I think when it comes to the payment issues in some sense Google is far ahead of Apple since they allow companies like Spuul to offer our customers the ability to pay for subscriptions and movies on demand. Apple, wanting to protect iTunes, does not allow us to offer customers the ability to pay for rentals or movies on demand with in app purchase. This is silly – Apple needs to open up more. Google also integrates lots of carrier billing around the world which is awesome – Apple is also behind on this trend. So Google has some openness around payments – Apples does not.

We do see that Apple customers tend to pay more – not by a slight margin either but by a HUGE margin. I have many theories around this but the one that I think makes the most sense for us in the video world is piracy takes a huge toll. People can download pirated videos and load them on their phone. They can watch pirated videos on YouTube or they can download one of many different apps that scrapes YouTube to find the pirated videos to make it painless for the user to watch or download the pirated content. Given that the Android users are familiar with this creates an attitude that within the Android ecosystem that everything should be free. This to me is what creates the largest headwind for a company like Spuul – that although we offer a level of quality and convenience far and above piracy – the users tend to assume that everything is or should be free. Apple does a better job, although not perfect, of policing pirated apps in general. Google tend to turn a blind eye to it cause since many of the apps or content that is pirated exists on Google in such a way that Google profits from it. Given this Google is slow to deal with it.

On top of all these issues  one still has to deal with the fragmentation issue. The easiest way to explain this is to take 2 brand new phones from 2 top tier vendors. Samsung and LG for example. Using the latest OS that they ship with. We have instances where the app will work on one and not the other – usually the majority of the time it is video related. So you can imagine if we the developer experiences issues like that then so do our customers. Add up all the vendors, the phone models and the various OS versions to get a sense of how big this issue can become. It is impossible to deal with it apart from getting the phone that has the issues and figuring it out. Usually it is something small and can be coded around but other times we just can’t make it work and give up. Sure we have issues from time to time on various versions of iOS or on specific devices but not often and usually under simulation we can sort it out. With the Android errors the only way to sort it at times is with the actual device which means some issues we will never solve. This is the fragmentation issue and it is very real.

For Spuul we have no choice but to support both iOS and Android. We also see that Android is growing like mad and in some emergent markets is bigger than iOS and continues to grow faster than iOS. I don’t see this changing unless Apple comes out with a cheaper phone and I really hope they do since users with an option to purchase something from Apple probably will if the price makes it more affordable. Either way we will keep working on both and we know that with Android it will take more time, more money and more bodies to equal what we do with iOS. It is just that simple.

What else besides these two ecosystems? For my money I would only bet on Windows Mobile for now. BB is dead. What else is there that I would take a chance on spending money on? Nothing for the moment to be honest.

I ain’t gonna work on YouTube’s farm no more – Ouch!

~ michael_msft ~ Leave a comment

I love this gem of an article about the Youtube ecosystem, how evil is all is and how one content person is telling folks how it is.

http://blog.launch.co/blog/i-aint-gonna-work-on-youtubes-farm-no-more.html

Finally someone who knows what they are talking about is calling it as they see it. Using Youtube as your content distribution strategy will only lead to your content being worth less than it is if you created your own distribution for it or worked with partners that help you to properly monetize it. Some super good nuggets in here.

This is the best one:

In summary, if you are a content company trying to build a ‘YouTube business,’ you are investing in your own demise. 

Section C is awesome!

c) Why content owners investing solely in YouTube are investing in their own demise
================
YouTube has made a big deal about celebrating their awesome stars, and they should. It’s amazing that personalities like Jenna Marbles, iJustine and countless others have gotten to hundreds of thousands–even millions–of subscribers.

People have become YouTube famous and gotten onto TV even. They’re making a living and a great one at that at the top of the pyramid.

However, what folks must realize is that their subscribers are NOT their subscribers. They’re YouTube’s users. Content creators don’t have the email addresses of their individuals, just the ability — for now — to get on their YouTube home page.

That control has lead YouTube celebs to start investing heavily in things like Instagram, Twitter and destination sites, in an attempt to win back control of their fans. More on this later.

Of course, YouTube additionally keeps changing their design, and not necessarily to help publishers. YouTube executives speak often of their main motivator: ‘to increase the session length at YouTube.’

YouTube controls the user base AND the advertising relationship.

What I tell young publishers is they need to focus on — and own — three things:

1. The relationship with consumers
2. The relationship with content creators
3. The relationship with advertisers

YouTube controls consumers and advertisers already, and they are using special events like ‘YouTube Comedy Week’ to control #2.

If you’re building a publishing company on YouTube, you now have no control over advertising and consumers, and you’re going to lose your talent next.

Think about it. If you’re Maker Studios — which lost their #1 star Ray William Johnson back in October — you now have YouTube inviting your talent to their upfronts and featuring them in massive special event promotions (like the ‘Comedy Week’ thing).

Do you not see what they’re doing?

YouTube is absolutely going to disintermediate the MCN (multichannel networks) in the next year or two. You can see it starting already. I mean, why would YouTube let other publishers control the top talent ultimately?

YouTube needs to fight against the large voting blocks like Machinima and Maker Studios, because if 10 of those folks got together and built a competitor it would be a major blow to YouTube. They could start sending 2% of their users off of YouTube a week — and weeks go by quickly I’ve learned.

In summary, if you are a content company trying to build a ‘YouTube business,’ you are investing in your own demise. You must stop and think, ‘How can I reduce my YouTube footprint to 1/3rd of my mix of revenue and views?’

Every time you invest $1 in YouTube, you’re building their power base and leverage over you. How can you invest that $0.66 of that dollar in an asset you control? At least then you might have a fighting chance over Goliath.

In a way, YouTube is the Sebastian Shaw of the ecosystem, absorbing all your power and talent and using it for their prime directive: maintain the 45% tax through control of talent, advertisers and user behavior.

OK, I’ve got two more sections to go, and this email is already at 1,500 words!

I’m going to finish these two in the next 48 hours (with your help!):