If there’s one thing I’ve learned producing a boatload of content in web video, it’s that technology ain’t cheap.
Storage, hardware, memory, computing power, bandwidth. It adds up. Of course, having built a successful content business from 2000-05, I am more than confident that I have, am and will continue to build a successful company, and not simply an expensive hobby at WatchMojo.com.
Last year, when everyone was drooling over the virtues of user-generated comments and technology platforms to serve video content and advertising, we were creating one of the more eclectic and broad libraries of digital content for broadband platforms.
This year, people value content and no one questions the virtue of building content custom-made for the Web. Last week we were one of the few online-only content providers joining Joost’s deck. We have many more announcements to make. Our core WatchMojo.com destination is growing in traffic as is our syndication business, one partner alone grew views by 23,490% in three months, from December 2006 and March 2007).
Last year, I also said that 2007 will mark the beginning of the euphoric end for technology platforms, and this started when YouTube got bought by Google.
Subsequently:
- Guba’s CEO jumped ship.
- Revver’s investors pushed two of the three founders off the plank when the CEO was on vacation (rather Robert Blake-esque if you ask me)
- Video Egg, a darling of many raised an additional $3M this, suggesting that it’s far from being anywhere near break even. In fact, since most of VideoEgg’s network is user-generated content, I would not be surprised if revenue is not where it should be, but traffic and views are robust, prompting investors to pony up more.
- And today, I learned that Trident Capital-backed Vidavee laid off a few people due to high burn rates. Vidavee has a really cool platform that if I could afford, I would have licensed.
I think Vidavee will prove to be very successful in the end, it’s got a few great clients and laying folks might be the remedy to ensure that it can serve these clients over time and make VCs happy, but the fact that investor sentiment is shifting does, like I have been saying all along, suggest that video content and video technology circles are about to go the same cycle that text content and text-based publishing tools went through in 2001-04:
=> Step 1: new media arises, cost of content creation goes down, a lot of people get into the business of publishing
=> Step 2: way too many tech platforms get funded to serve these content startups
=> Step 3: tech platforms need to recoup investment and experiment with numerous pricing structures
=> Step 4: media companies defer making technology acquisitions, licensing decisions due to falling cost and way too many choices
=> Step 5: technology becomes a commodity due to heightened competition, falling pricing and too little adoption
=> Step 6: fallout ensues with content players getting upper hand
=> Step 7: media companies make more and more revenue
=> Step 8: media companies wring out efficiency, boost margins
=> Step 9: media compaines can afford tech platforms
=> Step 10: value of tech platforms rises and the cycle continunes (see how CDNs get funded again now, and DCLK’s value rose from $1B to $3B).
Problem? In this era of cheap hardware, open source software and what not, will I the media company embrace a solution in step 9 or simply develop something custom-made in-house?
Like I say: to win in technology, you really need to be #1 or #2, in content, you need no such thing. Content, after all, is the new software.
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May 10th, 2007 at 12:02 pm
Thx for the Vidavee mention - this looks like a good platform. Have you dealt with them in the past?
steven