Reading that NBC will restrict coverage of the Olympics to NBC properties, I wonder if this will cause a rift between News Corp. and NBC.
The two companies are 50-50 joint venture partners in Hulu. In all likelihood: Hulu will want access to the coverage (which NBC is only making available after it has been aired on TV, and only making it accessible on NBCOlympics.com), but while NBC and News Corp. became bosom buddies to confront and answer the YouTube threat… over time, let’s face it, media companies have a tendency to stab one another in the back. I’ve always said that YouTube and Hulu are not really competitors and Hulu’s main obstacle from success will be NBC and News Corp.
If you think about it, the News Corp. side of Hulu’s lineage will be pushing NBC to make the Olympic Games available on Hulu asap whereas the brass at NBC will say “not so fast”.
What will happen? I don’t know… but something tells me that Hulu’s head honcho Jason Kilar will be fielding calls from both Jeff Zucker and Peter Chernin all night long as we head into the Summer Games in Beijing.
And sure, I might be getting calls asking me to stop stirring shit up… but until then, it’s worth speculating.
Of course, the most likely outcome is for NBC to simply grant Hulu the content a few days after the coverage has aired on TV and on NBCOlympics.com, but until we get that confirmation… it’s pretty interesting to consider the likely outcome.
Disclaimer: WatchMojo.com provides content to Hulu. Here’s our page. See our previous post tonight: It’s NBC’s Content, No?
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WatchMojo NewsletterI love nothing more than to blast traditional media, the technology bellwethers and the VCs that back them… but sometimes I think the media covering them goes overboard.
Take for example the reaction by some very respected members of the media surrounding NBC’s policies for coverage online for the 2008 Beijing Games. Sure, it is restricted and definitely not as viewer-friendly as viewers would like… but why should everything be given away?
I won’t make too many friends amongst the hippie love crowd… but here’s some wild, crazy, revolutionary thinking for y’all: if NBC is forking over billions to have the rights for the Olympics Games, should it not decide what it can and cannot do with those rights?
So it wants to air content on the Web after it airs on TV… can you blame them? TV is a $75B ad market, the Web is a $20B market as a whole, with video being a $1B market.
Don’t get me wrong: I am all for free, ad-supported content… but I can bet you that had NBC decided to make everything for free, on-demand, in real-time but had the audacity to air pre-rolls, we’d be having a cow over that, too.
No? Don’t lie… This is why the licensing model will give a run to the ad-supported play, not because it’s optimal, but because viewers have been conditioned to avoid video ads, where we’ve yet to even anoint a standard.
I also totally get why they want to restrict video to NBC properties. It’s not what we do at WatchMojo nor is it what many media are doing… but again, there’s an element of scarcity at play here and I think it’s folly to overlook it. Read more on this is “Does the law of diminishing return apply to content is king and ubiquitous distribution?”
Bottom line: no, it’s not what users want… but users want everything for nothing.
What NBC is doing is actually pretty progressive… especially when you consider how restricted things were in 2004 and 2006. What they are allowing in 2008 is net-net a step in the right direction, and this is obviously because the Olympics come every two years (alternating between Summer and Winter) which is an eternity online… just imagine where they might be in 2010 for Vancouver.
But reading some of the reactions online, you would think that NBC is being lambasted for deciding to run the stuff on their websites and on their terms… it’s like “hey man, just put it up on YouTube… and pass the bong”.
Part 2: Will Beijing Come in Between NBC and News Corp. and Cause Rift over Hulu?
I hate to post my third anti-VC rant in two days… but upon learning that some former Facebook staffers are looking at unloading some of their vested shares at a value of $3-4B (when supposedly Facebook locked in a $15B value earlier this year), it sort of reiterates my whole argument for providing liquidity preferences to founders, and in some exceptional cases, executives and employees, too. Read more in Bulls Make Money, Bears Make Money, Hogs Get Slaughtered.
Trust me, if you surround yourself with the right talent, cashing in some of your chips definitely does not make you less hungry for success… it just makes you more patient for it.
But, VCs go through their box of deceitful cliches to lock in talent and vest shares rigidly in the hope of retaining hungry employees and luring them into a bigger payoff when all they do is end up looking like jerkoffs. Oh, look, it rhymes.
But ask yourself how effective it is to invest money in a company and not let anyone take any money off the table, only to realize that some former Facebook staffers (who probably left because Mark Zuckerberg had no desire to sell any time soon) are cashing in their chips for 33 cents on the dollar? Way to go geniuses. No wonder your batting average is in the toilet.
SAI and TechCrunch have more on this seemingly unbelievable story. In the broader landscape, I personally think that Facebook is surely worth something, but $15B? We all know that was MSFT agreeing to that in order to you-know-what block Google from the deal. But the reason why Facebook board member Peter Thiel pushed for such a lofty valuation wasn’t just greed to push up his investment in the social networking site, but because he knew that the Ponzi scheme effect would also push up the value of his investment in Slide… which is basically valued as a function of Facebook.
There’s an expression in investing that says “sell in May, go away”. Well, ever since I got into trading regularly (2003), I wanted to do just that… but every year, May came and went I stayed in the market.
This year, seeing Yahoo!’s crazy handling of the MSFT offer, I decided to sell everything and leave the market: I got tired of seeing douchebag executives trample over shareholders’ rights.
I’m glad I did: U.S. Stocks Tumble, Sending Dow to Worst June Since Depression.
Good timing.
Bob Parker would be proud, I tell ya.
Yahoo! just lost another “key exec”, claims Tech Crunch. This time, some M&A guy named Kent Goldman. If you are an M&A executive at Yahoo! now, you get more deal flow than… The point is: no one in their right mind is looking at selling to Yahoo! Why? Because no one was rushing to get on the Titanic once it hit theat infamous iceberg.
Furthermore, Yahoo! isn’t in the market to buy anyone, because they are too busy with doing a re-org every month… oh, they’re also getting in and out of markets on the turn of a dime.
What makes this really ironic is that a lot of people - namely VCs looking to flip otherwise useless and exitless startups - were against MSFT buying YHOO because it would lead to one less buying party.
This, I thought was nonsense, because when a company that is not strong in an area (MSFT/Web) buys a company that is strong in one area (Web, allegedly) but lacks financial firepower (cash, strong stock) then the buying party uses the selling party as a platform to buy more companies.
In other words, MSFT has the cash but not the slightest clue what to do with some companies… whereas YHOO lacks the cash but has a clue (all right, maybe not anymore) about what to do with web startups.
All things being equal, adding a small web startup to MSFT is not as bright as adding a web startup to YHOO because YHOO is more of a pureplay Web company whereas MSFT is a software firm first and foremost just trying to find its bearings online.
In fact, I could be wrong, but I see CBS using CNET to make more acquisitions for largely similar reasons. CBS is a great media company - albeit a traditional one where its audiences are getting too old for marketers to care about - in shrinking business segments. Sure, it bough Wallstrip, Last.fm and a few other such companies… but it cannot get all that aggressive with your typical Web startup. Having however spent $1.8B on CNET, it can now use its balance sheet and cash flow to leverage CNET’s audience and more Web oriented business nature to make more acquisitions.
Indeed, we’ve seen this before: when News Corp. bought MySpace and IGN, it did not clam up and put away the checkbook, subsequently buying up Photobucket, Flektor, Strategic Data Corp. and a number of other companies.
The CBS example is fitting, by the way, because Goldman is the second Yahoo! executive to leave the company; Mike Marquez left YHOO to join CBS. I am pretty sure that he’s seen more M&A activity at CBS in that timespan than Yahoo! has.
But of course, in the near sighted world some people live in, MSFT buying YHOO was a bad thing. Tell that to YHOO stockholders who are today holding a stock that is 50% lower than where it was a month ago, before Yang et al. totally sank the company…
Some of the themes we cover on this blog are the relative over-important feeling VCs attribute to themselves. No one lesser than VC dean Mike Moritz echoes this sentiment, mind you.
This article sheds more light on that:
In the second quarter of this year not a single company backed by venture capitalists has gone public. It is the first time that has happened since 1978, according to a venture capital industry group.
(…)
That may come as little surprise to the well-heeled individuals and institutions that give their money to venture capitalists seeking big returns. Some of these investors have criticized venture capitalists for failing to provide substantial returns on a broad basis since 2000.
Reading the press releases and the vast majority of VC blogs, you would think that indeed, patience is required, because while VCs put on their pants one leg at a time (like you and me), unlike you and me, they are “changing the world”. Bull-f****n-shit. Here’s why and one VC is candid enough to admit it:
But Paul Kedrosky, an investor and the author of Infectious Greed, a venture capital-centric blog, said that there were deeper, more systemic problems for venture capitalists in addition to the cyclical challenges. He said part of the problem was that the industry was backing companies that lack widespread investor appeal, like YouTube clones and dating and social networking sites.
“There is nothing that the industry is producing that investors want,” Mr. Kedrosky said. “The stuff they’re investing in is idiosyncratic — it’s fun and appealing to them but Wall Street doesn’t care.”
“The Valley is operating in its own little world, and the capital markets don’t care about the things that are getting the Valley excited.”
Well said. You mean Twitter and Slide aren’t going to change the world. Man, I must have missed that tweet. The stats don’t look good, either:
Over all, the market for public offerings has been in a funk. So far this year there have been 36 offerings, down from 130 during the same period last year, according to Renaissance Capital, a research firm based in Greenwich, Conn.
“Deal volume has fallen off a cliff,” said Paul Bard, head of research for Renaissance.
The public offerings this year raised $27 billion, but Visa’s offering accounted for $18 billion of that. Mr. Bard said there was likely to be a sharp drop in the amount raised this year from last year’s $60 billion.
Mr. Kedrosky said the problems were particularly acute for venture capitalists — and that leaves them with some answering to do to their own investors.
“Here’s an industry struggling in a big way to hang onto its investors, let alone find new ones,” Mr. Kedrosky said. “They’ve been hanging on by their fingernails.”
The lack of a good way to cash out just makes things worse, he said. “There is no venture industry if there is no I.P.O. market.”
VCs like to live in the comfortable confines of spreadsheets, I sure hope one of them tried to run the numbers and tell me how he or she deserves their own investors’ money when you consider their track record, and the prospects of the broader IPO market.
I’m sorry… If you ask me, I just don’t see a hockey stick trajectory for your kind of business… Pass.
Can’t wait for this entire industry to be disrupted into oblivion, or at least, evolve to actually provide value beyond a check (as in: Want to invest in our company? sure, here’s a desk, get cracking, Sir… don’t just pontificate from the golf course, pal).
PLAY
