MGM is taking a leap of faith and offering some of its full length movies on YouTube. The venerable studio has nothing to lose, and YouTube remains king of online video distribution with over 5B streams per month, so this is not a bad idea… for promotional purposes. I am not sure if commercially this will make a dent in MGM’s income statement. As a content provider to YouTube, I see many ways that MGM can indeed make money out of this, but it won’t be obvious, because not all content is created equally - especially by the venerable folks that make up Web video watchers.
MGM has some:
- positives (with regards to its content library, which is huge, even though for the record, it is starting small, you cannot blame them for not diving in with their entire library) and
- negatives: its options.
In fact, this sums up media’s outlook on the Web pretty well:
Discovery CEO David Zaslav expanded a bit on what he said last month about the value of full shows online for the cable net, in an interview with B&C: “I’ve spent a lot of time looking at the economics. If you take out a pen and you add it up, there’s not a lot of economics there [of putting full shows online]. The business model is not that strong…we get substantial value by distributing our content on dual-revenue-stream platforms, domestically and around the world. We’ve been able to take the best of our content and use pieces of it through HowStuffWorks.com or on our other sites..there’s no reason for us to take a fire hose and take a fantastically valuable library and make it available on the Web for free.”
The bottom line is that online media’s revenues are peanuts to traditional media. TV and Film revenues come in at over $250B, online video is less than $1B.
As I’ve long argued: online video can be a salvation to print media, at least they should care about online video. The problem is that print media lacks the DNA - be it in terms of asset or people - whereas TV-centric media firms have the DNA but lack the financial incentive.
Either way for traditional media, it does not look good. Those who can, won’t; those who want, can’t.
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