Business Models

PardonMyFrench: How To Make Money Embracing YouTube (- or not!)

Eric, I love these debates.  This quote from your post goes to the core of the business model discussion.

However, I keep asking questions on how these companies, bands, etc make money in the long term  ….

One thing is clear that going after the end-user who posts the content is wrong because at the end of the day, they make nothing off of it and after all this is about money right?

Source: PardonMyFrench: How To Make Money Embracing YouTube

Yes its the American way to say its all abut money.  But then from “The Starfish and the Spider” we get:

Skype

P2P music

Craigslist

Just three examples that have devastated business.  Just ask the telcoms, the big five record lables, and the newspapers.  Their old profits are gone forever, and the more they fight it the worse it gets.  Those profits are gone, and they are not going to magically reappear through creative brainstorming.

Rule #6 in the book is

Rule #6 as industries become decentralised, overall profits decrease

Maybe, just maybe the answer is not to fight it by trying to make money the old way, out of the new environment, by, for example, placing ads inside music downloads, or screenscraping Craigslist and placing ads there. 

Just maybe we have to accept that revenue source is gone forever.  Just maybe we have to accept that the new revenue will come from new business models that are still being figured out.

Disintermediation of old businesses is an overused term, but what if its true!  Which way is the safe bet here?

 

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4 thoughts on “PardonMyFrench: How To Make Money Embracing YouTube (- or not!)”

  1. Colin,

    So what you are saying is that instead of the publishers cutting deals with YouTube, MySpace, etc where they can get a share of the advertising revenue, they should post them on Craigslist or place ads in music downloads? How many content owners are going to jump on that bandwagon?

    Eric

  2. Not at all …. the only point is that the revenue from those deals will not, in the long run replace the old revenue. So alternative sources using new models will be required.

  3. Ok. I agree that their old revenue models are changing, but what was wrong with my point that the YouTube/CBS deal is a good example of how to make money going forward by embracing the communities of those sites?

  4. I am not suggesting the point made is wrong. Only that it may not be a sustainable business model going forward.

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