According to an AP article citing data from comScore Inc., people are still in love with the internet. In fact, they love to watch videos on the internet. Furthermore, views of videos online experienced an ecstatic rate of growth in February -- they shot up 66% compared to the year-ago period. Incredible, right? And if you're a media company, you love the data, right?
Well, if you're Google (NASDAQ: GOOG), you love it. If you're a Disney (NYSE: DIS) or a General Electric (NYSE: GE), you would be of two minds about it. For you see, while people are watching videos, oftentimes they are doing it on a platform like Google's YouTube -- they aren't necessarily watching them at ABC.com. The data show that YouTube increased its video views by 15% in February 2008 versus February 2007, and that it captured one-third of the 10 billion video views that occurred in February of this year. Amazing. But sites like ABC.com captured much, much less of those views -- that site, in fact, had a measly 1% share of the pie.
Major content players want surfing eyeballs to come to their sites so they can monetize their online libraries via methods of their own making. Media companies, simply put, still haven't figured out how to adapt to this new electronic entertainment economy, and they still haven't come to terms with YouTube. In an era of social networking and clip sharing, users love to copy content and upload it to sites like YouTube that are very easy and friendly to engage, thus bypassing the owners of such content. How does one fight this?
There's no easy answer, but the upside is that media entities like News Corp. (NYSE: NWS) and Viacom (NYSE: VIA) -- which I wrote about the other day -- in addition to the ones mentioned here, have a lot of growth ahead of them on the web. Intense marketing, plus investments in video platforms that have interfaces that are as user-friendly as YouTube's (Hulu.com is one such experiment), are obvious solutions, but one thing media companies need to keep in mind is that the 'net is constantly changing, and that things might eventually swing their way at some point. All they can do for now is focus on producing quality content and hope they can get it out there before it gets YouTubed away from them.
Disclosure: I own shares of Disney and General Electric; positions can change at any time.
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