“More YouTube’s” My Foot

First of all, name if you can the serious competitors of any of the following: Facebook, YouTube, Amazon, eBay, Twitter, Google.

Go back ten years, name the biggest sites on the web, and you might notice that some of those names are either gone or really quite small compared to the dominant sites today. It isn’t even necessarily sinister, but it is a fact that the Web doesn’t tend to foster competition so much as it fosters monopolies — some short-term, others long-term.  In the potentially short-term monopoly category, we might look at Facebook’s current dominance and recognize that the company could make a misstep that turns us all off (or we could just get bored), and the site would evaporate into MySpace obscurity.  In the long-term category of web-based monopolies, we look at an Amazon and understand that its elaborate and capital-intensive fulfillment system would be very hard to replicate or beat rapidly enough to realistically grab much of its market-share.  And then, we look at a YouTube, which is somewhere between a Facebook and an Amazon inasmuch as there are other video hosting options but none that are owned by the company that also owns (i.e. controls) more than 90% of search worldwide. So, if you want to use video to promote yourself, your business, your ideas, your work, or even your shaking booty, YouTube is really your only option. And Google likes it that way.  What company wouldn’t?

Still, mere market dominance and unlimited wealth isn’t enough for some people; they want your soul, and they’ll tell you any lie in order to get it.  For instance, I offer this brief article about a panel discussion called Expand NY on which some of the usual suspects sat agreeing with one another about the future of copyright, all predicated on the assumption that copyright is just one legal framework that remains an out-of-date barrier to future economic growth in the digital age.  But even if you don’t give a damn about copyright, pay attention, because like I say, these people want your soul, by which I mean to argue that companies like Google ultimately want a world where people no longer believe they have a right to privacy or a right to control how their words or images are used.  The war against copyright should be viewed by the general public as the precedent-setting, legal groundwork for a world in which certain civil rights simply cease to exist.  And when your kids’ birthday video can be used to sell McDonalds without your permission, you might find the expression “steal your soul” is no exaggeration.

But what does that have to do with the panel discussion in New York? If a premise is false, the conclusion is also false. And the reason I draw attention to this discussion is not to argue about its conclusions — that copyright may or may not need updating — but that people with false, even dangerous, premises have no business in the debate. The premise being put forth is that a framework like copyright is stifling economic potential in the digital age, but the reason we can know this is a false premise — other than the 20 years of history — is that Julie Samuels of the Electronic Frontier Foundation says it’s a false premise when she overreaches with a really big and tactically dumb lie.  At the bottom of the article, Samuels is quoted as saying, “We want a thousand more YouTubes,” and this is meant to be an example of that as-yet untapped potential growth supposedly being stymied by pesky copyrights.  But who is it that wants a thousand more YouTubes?  Google certainly does not, and anyone who believes otherwise is a sucker.

So, if by “we,” Samuels presumes to mean “we the people,” then we the people can do the math and see that there will never be so many as three more YouTubes in a world where there remains only one Google encoding the fate of all Internet search. At a certain point, the cost of entry for a presumptive competitor is too high for the same reason you’d be hard-pressed to replicate what Amazon does. And that financial threshold was crossed a long time ago. As Google now earns an estimated $52 billion in annual revenue, I double-dog dare anyone to approach a VC with a business plan to be the “next YouTube.” Copyright may indeed be due for review and even revision to reflect new technological realities, and I certainly agree with one point made by panelist Mike Masnick, that copyright review could be “good or bad depending on who’s involved.” So, if he and his colleagues would stop promoting utter bullshit, maybe responsible review can proceed.

© 2013, David Newhoff. All rights reserved.

This entry was posted in Copyright, Economics and tagged , , , . Bookmark the permalink.

5 Responses to “More YouTube’s” My Foot

  1. Faza (TCM) says:

    This reminds me of IRFA. That kind of “give us more competition” vibe is often heard from people who don’t want to look like they’re shilling for a specific business.

    I find it wrong on three levels at least: the first is that there are actually quite a few “YouTubes” (meaning sites that host and stream video) – some legal, some decidedly not, most somewhere in the middle (as is YouTube) – so do we really want more of them? The second is what you talk about here, David: with YouTube having the benefit of both Google’s insane amount of subsidy cash from advertising and its dominance in search, it doesn’t seem very likely that anyone’s going to have a chance at the big time any time soon. The third – and fundamental – one is that you only really need one of everything on the net (I wrote as much at the time of IRFA). To recap: if you already have an established business that can sell (or deliver) anything, anywhere, at any moment, there isn’t really a trick another business can come up with to steal market share. If I can already watch anything I want on YouTube, wherever I am and whenever I like (for free, no less!), why in the world would I go anywhere else?

    Funnily enough, the answer to “how we can get more competition in the online space?” is: stronger copyrights. These make it possible for would-be YouTube competitors to strike exclusive deals for popular videos which would draw users to their site. Moreover, not even Google could afford to pay for exclusives on everything (not to mention the fact that some folks may refuse to license them on principle), so it’s highly unlikely that this would produce a more consolidated market than we’re seeing now.

    Of course, that’s an answer we’re never going to hear from the folks “who know about the net”.

    • M says:

      This type of argument for the vague “stronger copyright” is so typical of copyright proponents. Of course, it’s really easy to say “stronger copyrights” in some kind abstract sense without defining what that actually means in a practical sense. This is the copyright proponent equivalent of “I want a pony, I don’t know what’s involved, but just give me a pony! Pony please!”.

      The problem any time you actually make the abstract idea of “stronger copyrights” into a concrete idea for actual implementation, they end up being awful and possibly completely ridiculous. Faza, for instance your whole let’s require credit authorization for for all things ‘posted on the Internet’ is substantially less enforceable then copyright itself is on the Internet.

    • David Newhoff says:

      I meant to reply to this, Faza. It is a point I make often, but one left out of this post, that it is not only the capital-intensive web businesses that become dominant. Once a site like Faceook reaches critical mass, there’s little room to replace or augment it because almost nobody wants another site that offers what it offers. This same phenomenon will likely manifest if streaming music a la Spotify continues to be a thing. iTunes may be about to own that space, but maybe not. Regardless, whoever settles in and gains enough global market share will enjoy the same monopolistic advantages of a YouTube.

  2. Pingback: Shorten copyright terms? Okay, then what? » The Illusion of MoreThe Illusion of More

  3. Pingback: Stay Down Provision Will Not “Entrench” YouTube Dominance - The Illusion of MoreThe Illusion of More

Join the discussion.