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YouTube, take 2

Hollywood needs a new script or a plan to create a better video-sharing site is likely to be a flop.

December 16, 2006

HOLLYWOOD IS THE land of remakes. So why not come out with another version of YouTube? That's what a number of entertainment conglomerates are contemplating. The idea is to provide an advertiser-supported site for people to post video clips -- with the revenue flowing to copyright holders instead of YouTube.

If the companies launch such a venture, history won't be on their side. The Web is littered with struggling or failed initiatives by entertainment companies trying to eliminate the middleman and take their products directly to consumers. It's worth examining why.

Some, such as Disney's Go.com, suffered from a severe case of me-tooism. Others, such as Pressplay and MusicNet, which were controlled by the major record companies, offered consumers less music at a higher price than the unauthorized sites. No entertainment conglomerate has developed the following of such third-party ventures as Apple's iTunes Store, let alone the runaway popularity of illegal file-sharing.

The effort to develop a YouTube alternative, which includes Viacom, News Corp. and NBC Universal, has at least one important difference. Its aim doesn't appear to be to stop or control the posting of copyrighted works online. Instead, the goal is merely to attract and collect advertising revenue. That thinking acknowledges not just the reality of the Internet -- it's next to impossible to stop people from posting things online -- but also the ratings boost that online exposure can bring.

But media companies shouldn't be misled by the seeming ease with which YouTube attracted millions of users. Ask one of the many also-ran sites for online video: It's tough to reach a critical mass of content when you're relying on users to supply it. There are legal and business challenges too. If the companies allow their own copyrighted clips to appear on their site, antitrust law may force them to offer the material to competing sites. They also may find it hard to agree on the site's operational details. Such squabbling, combined with a collective lack of nerve, has held back Movielink, a movie download site owned by five studios.

That may be the strongest argument against media companies trying to beat YouTube at its own game. The entertainment industry has a long history of working through middlemen, including radio broadcasters, cable TV networks and record stores. The current generation of middlemen (such as YouTube) may seem threatening because they cede more power to consumers. Yet they also increase the public's consumption of media. Instead of merely trying to copy the site, maybe the studios could try to improve it -- perhaps by letting viewers do even more than YouTube does. A sequel, in other words, not a remake.

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