This post was initially going to be a simple one linking to a quote I came across. But like with most of my posts, it took a life of its own. So, here goes. Let me add a disclaimer: I am not passing judgment on any one product, person or company here. I am simply commenting on the state of online video and adding commentary on why investors have so far hit a bunch of Mulligans in the online video space.
Video is for Infotainment
I think video is largely an entertainment and informative tool, and not a communications tool. When it is used as a communications tool, it’s done so by corporations who want to save travel expenses or cannot attend an in-person meeting due to time restrictions. If people are to communicate verbally, then it has to be real-time, needs to be intimate and frankly, these scenarios involve the vast majority of conversations. For example, I might want to chat in such a fashion to friends and family, but everyone else, I need not and try to avoid it like the plague.
Personally, I would never embrace video email or video conferencing even.
Blogs and Vlogs: Vanity Meets Self-Indulgence
While personal blogs have exploded in popularity and businesses have began to use blogging software to publish, most of the world’s normal population would never have the audacity to blog in the way that many of us do. In fact, most bloggers over time realize that they need to create a separate place to blog about personal matters because once they establish an audience, there are just some things that they need to keep private.
YouTube has provided anyone and everyone with a webcam to pontificate on topics A through Z. Because YouTube went on to exit to for $1.65B, then it spawned a series of knock-offs and derivative products, much the same way that MySpace’s success created a series of niche social networking applications.
The difference, frankly, is that niche and small works for social networks (though most MySpace clones have and will die); whereas for those seeking a soapbox, let’s face it, they will always favor a larger audience over a smaller one.
That’s right, even the KKK prefers to broadcast their message to as wide of an audience as possible; if someone with a message is forced into the underbelly of society, it’s not by choice, it’s because their message has been largely unwelcome.
Blogs vs. Publications
In these contexts, it is worth noting that those who seek to get their messages out via video format do so because it is advantageous to do via images and video. That is rarely the case. Text is much easier to read, better indexed by search engines and frankly, the users (readers vs. listeners) prefer it in that format.
Radio works in cars because you cannot read. Notice how people in trains tend to read the paper?
If the client is always right, and all factors being equal, they prefer text over video, then why on earth do some investors think that they know best by backing these dead-end products?
In other words, if it makes more sense to publish via text and yet one chooses to publish via video, then they are doing a disservice to their audience?
The following quote is 100% accurate and about video as a means of communications. I founded it this Center Networks, who in turn linked to a post on Mathew Ingram’s blog, on which a reader added a comment coming from Valleywag’s Owen Thomas:
“Video is one of the most inefficient means of communication, suited only for self-important types who overvalue their own thoughts and undervalue the time of those they speak to.”
I agree 100%. Most importantly, I purposely broke down the few degrees of separation that led me to the quote to clearly demonstrate why video would never be able to match that. I would never have the patience to sit through the amount of information I sear through in a given day in text format if it came in video format. I cannot be bothered. The flip side is that others would never take the time to pinpoint and identify the best content if it was all in video format. It is specifically because such context is in text content that it has legs. That same quote in video would be just as compelling, but it would probably go unnoticed.
The subject of all of this, specifically, is French entrepreneur Loic Le Meur’s startup Seesmic, but the truth is it applies to all of the other wanna-be startups that have created the latest subset of bubble investing in the video segment: Justin.tv, Mogulus, etc.
These companies have taken the baton from video file sharing social networks first and then video ad networks as the sub-bubble of video investing.
I presume the bet being made is that someone will come along and buy these companies. I doubt it. Yes, CNN paid almost $1M for I-Report.com and IReport.com (the URLs, there was no business behind it), so it’s not inconceivable for a “greater fool” to come along and pull the trigger on something like Seesmic, or Mogulus, Crappo, Toilt, etc.
Seeing these companies raise more and more money, I realize that we’re in an insane period in online video, literally.
Insanity is doing the same thing and expecting a different result. That’s what investors are doing: they are investing in the same UGC-oriented projects and wondering why online video advertising is not accelerating and gravitating towards their ventures, forcing forced sales (Revver) and liquidations (KnockaTV).
With Seesmic in particular, I see two problems:
- way too many competitors, and
- a bit too late.
I suspect Loic (who made a bigger name for himself by backing current French President Sarkozy) wanted to time Seesmic with the 2008 American elections… but that train has left the station. YouTube is all over the elections with partnerships with CNN to brag about, to boot.
Anyway, I can’t really comment on Seesmic because I would never use it. Maybe a lot of people would, though I don’t see why one would favor Seesmic over YouTube, especially when, one would assume, want an audience to be live and present, and for that one might as well choose Seesmic.
The Myth of Community
Loren Feldman took this argument to the extreme on his video blog, for what it’s worth, his post was more entertaining and informative than a communication medium. Seesmic’s Le Meur initially seems to have bashed Feldman here, but that post is missing, which says a lot about the myth of community if you ask me. Hmm… why delete that post if you are so bullish on community? I am definitely not taking sides, just commenting, or I guess, communicating.
The point is: when we launched WatchMojo.com - a producer of professionally produced video content - I never wanted to include comments. I read the comments (the good, bad and ugly) users leave behind on our syndication network (YouTube, MySpace TV, and 100 or so other locations) and nestled in between the 20% of valid comments are 80% of spam and immature and crass crap (my favorite was a comment left on a cooking segments simply urging the female host “less talking, more titties”). That added a lot to the conversation, I’m sure.
Frankly, I don’t want it on our site. Don’t get me wrong, one day we’ll launch comments on WatchMojo.com, but I am honest enough to say that apart from boosting average time spent per user on our site, it serves little value. It’s a marketing gimmick, one that entrepreneurs like Le Meur are smart enough to recognize and exploit. More power to them.
I am not saying we don’t welcome feedback, we thrive on it. We get droves of emails suggesting what to cover from users outlining what they like and dislike, but when users see a comments area, they are inclined to think they have to leave a comment, even if more often than not, they have little to add. Remember we’re talking about video. On this blog, and all blogs in our blog network, we encourage comments, because on a text-based blog, there is an element of communications as well as information and entertainment. In other words, I’d never produce a video of me saying all of this, because it makes more sense for it to be in text format, on this blog. That’s how the blog networks fit into the bigger picture vis-a-vis our extensive library of video content.
Speaking of video, video is 50% informational and 50% entertaining and I will say that 99% of video projects are getting it wrong these days. If we want free, ad-supported video, then we need to back projects that are “backable” by advertising. Seesmic is not, neither is their entire peer group. Few have the balls to say it, because it’s not hip to vote against community, but that is all part of the myth of [video] communities. YouTube was a $1.65B exit, yes, but it was not a stand-alone business with revenues and profits. It was a lawsuit waiting to happen (it did, namely, by Viacom). We all love YouTube, but referencing YouTube (or for that matter outliers like MySpace and Facebook) as examples of what all companies should be is lunacy.
In all fairness, all of these very smart and accomplished people seem to disagree with me, Feldman, Ingram, Thomas:
* Atomico - an investment group founded by Niklas Zennström and Janus Friis.
* Michael Arrington - Founder, TechCrunch
* Steve Case - Co-Founder and former CEO and Chairman, AOL
* Jeff Clavier - Managing Partner, SoftTech VC
* Ron Conway - Early investor, Google
* Steve Garfield - Pioneering video blogger
* Dan Gillmor - Director, Knight Center for Digital Media Entrepreneurship
* Reid Hoffman - Founder, LinkedIn
* Michael Parekh - Managing Director, Goldman Sachs
* Mark Pincus - Co-Founder and former Chairman and CEO, SupportSoft
* Ariel Poler - Founder and former CEO, IPRO and Topica
* Jeff Pulver - Chairman and Founder, Pulver.com
* Martin Varsavsky - Founder, FON
But who cares. I am pretty sure half of these people would not be able to identify Seesmic from a list of their peers… and the other half might not be able to explain on the back of a business card what Seesmic actually is. As I said, VCs have an abysmal track record in online video. If you add up all of the investments they have made in online video (to quote Donald Trump, “many billions“) and juxtapose that to the exits (YouTube, Maven, etc.), they have nothing to brag about and given the pace of deadpool activity and trainwreck-watches, they just never might.
But enough pontificating in this post, I’ll be publishing a breakdown of VC investment relative to exist soon, and trust me, it doesn’t look pretty.
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