Where are things headed now?

I’ve afound that in order to see wherethe Internet is headed, it’s a good idea to be informed about where they’ve been.

Take video on the Internet. Now that the YouTube/Google sale has put Internet video on the map, what’s next?

First there was Netscape and Netscape made it easy to use the web.  Netscape was also, not coincidentally, the first Internet industry success story.

Then there was Yahoo and Yahoo made it easy to find things on the web. And Yahoo was the second big success Internet industry story.

With these two companies as a foundation, the web took off in a million different directions and fortunes were made in a countless number of ways – NOT by building a better browser and NOT by creating an alternative to Yahoo (unless your names happen to be Larry Page and Sergey Brin of Google), but by serving market niches.

YouTube is remarkable not only for the speed with which it became a billion dollar plus company, but also for the fact that they compressed the “brower” function and the “search” function into a single product.

Think about it.

Netscape made publishing to the web and using the web dead simple.

YouTube succeeded because it was the first company that made publishing video to the web and viewing video on the web easy. (If you haven’t uploaded video to YouTube and compared it with the process of uploading to other services, I recommend you’ll do so and you’ll instantly see why YouTube grew so big so fast and won the game.)

Yahoo helped make the Internet more valuable by offering an enormous and searchable collection of  an of web sites and pages.

YouTube did the same thing. If I’m looking for a particular piece of video, the first place I go is to YouTube.

Why?

Because YouTube is so easy to work with (upload to), they attracted the lion’s share of the content and I know from experience now that the odds of finding what I’m looking for on YouTube are exponentially higher than finding it on any other service.

All this may seem blazingly obvious, but unless I’ve missed it, I haven’t seen anyone come out and say that YouTube won because they were the easiest service to upload video to. Being easy to upload to led to tons of content which led to tons of viewers which led to more content which led to more viewers etc.  And you can see the results in their growth chart.

How important was the “community” and “social-networking” aspect in YouTube’s success?

Some  describe YouTube as a social-networking site  and there certainly was an element of that, but while I’m sure that social-networking played a role in YouTube’s success – especially in its early days when it was trying to get some traction – I’m equally convinced that ease-of-use was by far the most important ingredient in their success.

I seriously doubt that a poll of YouTube users would show that the majority of today’s users go there for “community.” I’m going to go out on a limb and guess it would be 5% or less. People go to YouTube to find and watch (and upload) videos.  That’s the draw.

Two things that are I think are being way over-sold right now are:

1. Social-networking
2. Internet widgets (sites that slice and dice Internet content in interesting, quirky ways)

Why?

It all boils down to TIME.

There are 24 houyrs in a day. Eight spent sleeping. Ten or more spent dealing with the practicalities of earning a living and taking care of the infrastructure of daily life.  Unless  my math is faulty that leaves a maximum of six hours a day for “other.”

“Other “includes movies, watching television, computer games, e-mailing friends, surfing the web, talking on the telephone – and those are just some of the media options.

Then there’s sports, exercise, actually talking with real people in real time (imagine that!), hanging out with friends, hanging out with family, religious practice, hobbies, “doing nothing”

Yes, I’m sure that there is a class of person who gets obsessed with their computer and  obsessed with a social-network web site or two, but even those people are extremely limited in the number of services they have time to use!

From this I conclude that there will be some clear cut winners in “big category” areas and we already know who most of them are:

For video: It’s YouTube
For photos: It’s Flickr
For personal blogs: It’s MySpace

Look, Rupert Murdoch, Yahoo and Google didn’t make their money by being dumb. They know where the eyeballs are and they grabbed them.   There may be some surprises down the pike, but for the most part the big properties are sewn up.

So does that mean all the opportunities are gone?

Far from it. In fact, for small player, the game is just beginning.

Not only that, but I’d much rather be a small niche player than face the task of trying to monetize the marketplace of “undifferentiated people who upload photos” or “undifferentiated people who look at video online” or “undifferentiated people who like to blog and chat with their friends online.”

Fifteen years ago, there was an industry (minus the video) that tried – and failed – to monetize these folks. It was called the BBS (computer bulletin board service.)

BBSs were like primitive MySpaces. People “hung out” on them and some even built their social lives around them.

How do you target advertising in an environment like that? It ain’t clear and to a large extent Yahoo and Google and Murdoch got in the game not because they see how to make money from it, but because they have to be.  They are in the high stakes, high profile business of collecting huge numbers of eye balls and they can’t afford to let their competitors get a significant jump on them in that department.

Anyway, back to us… folks without millions of dollars in venture capital or big staffs oof technical eager beavers or the need to be reported on postively on a regular basis on the evening news.

How do we profit from Internet video?

We have an infinitely easier job. Because our businesses are niched, we know who are customer are, what they want, and most importantly what they buy.

For us, video is a method to get people to come to our sites more often, stay longer, and interact more with our offerings. Sometimes we’ll offer 100% content, sometimes we’ll pitch products, sometimes we’ll mix it up.  The key is more people spending more time listening to more of our messages.

If you’ve picked your niche carefully you already know how to make money from the audience. Video becomes a tool to further cement your connection with your customers so you can make more money. Simple, isn’t it?

P.S. Do you want to be notified when new articles like this one are posted to the blog?

Ken McCarthy was one of the pioneers of the movement to commercialize the Internet and was involved in early tests of what have become Internet promotion mainstays like e-mail marketing, banner ads, and pay-per-click advertising.  If you go to Google Video and search the term “marketing,”  a short film about his work is often in the top ten, if not the number #1.

It’s easy. Just go to this page and we’ll add your name to our bulletin list:

http://www.internetvideomarketingletter.com/

– Ken McCarthy

P.S. For over 25 years I’ve been sharing the simple but powerful things that matter in business with my clients.

If you’d like direction for your business that will work today, tomorrow and twenty years from now, visit us at the System Club.

Copyright: Ken McCarthy, 2006

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