YouTube, SNL, Bruce Springsteen, and Jason Calacanis

Jason Calacanis wrote earlier today that Youtube is not a real business.

He says, and I quote:

Let me break it down: YouTube
and other video hosting sites have made it easy to pirate stuff on the web (which is where piracy started), but they
shouldn’t be positioned as some revolutionary business. It’s a silly, little business that anyone could setup in a
week. The fact that folks are talking about them being bought for some large amount of money by Newscorp is commical.
They are a glorified FTP site with TAGS people! I could set this up in a weekend with two kids in high-school and a
couple of cases of Red Bull. In fact, the first two programmers to email me with a decent resume I’ll back you guys to
build a YouTube compeititor–provided you can build it in under five days.

Let me break it down for you Jason. Youtube is as much a business as MySpace or Digg which you cite as real businesses in your post.  We are talking user generated content here and YouTube has captured the hearts and minds of the people as the place they go to post videos and find videos.

 I am spending the president’s day weekend skiing in Utah with my family and three other families. We spent a ton of time in the airport with delayed flights on Friday night.  What did we do?  We spent a couple hours on YouTube in the airport lounge watching great footage of Springsteen shows from the 1970s, old Stevie Wonder videos, Arctic Monkeys videos, and of course the requisite SNL videos.

My kids and their friends go to YouTube to see the videos of their favorite bands and upload videos they have shot of themselves and their friends so they can post them to Myspace.

It is true that there are somewhere like thirty or forty YouTube like services and the first of them, Vimeo, came out over a year ago, well before YouTube launched.  So Jason is right that its not hard to build the basic functionality of YouTube.

But YouTube has built an audience.  It’s a destination.  And it delivers because like all user generated content services, it’s audience contributes the content as well as consumes it.

Now of course there are challenges to this model.  Like all user generated content models it’s hard to control what the audience does.  The New York Times had a short piece today on the request by NBC Universal to take down all the SNL videos that have been posted by users on YouTube. This is likely to be an ongoing request because the SNL videos are going to go back up as soon as the people who put them there in the first place realize they’ve been taken down.

As Jason says in his post:

SNL obviously got more from the viral nature of this promotion than anything they could ever buy. They should put
every single one of the skits on the Internet *for free* and put an advertisement in front of them. They would be
making at least 1M a month from this within six months. SNL should also put skits that didn’t make it on the show on
the Internet, as well as bloggers and other colaterial material. In fact, in short period of time SNL will have more
value online than offline.

That is the point I have made repeatedly on this blog in the past several months.  Content owners should pay attention to what consumers want to do with their content and find ways to satisfy these desires that can fit into a business model.  Putting SNL videos on iTunes is OK, but if they put them there, they should allow people to put them anywhere they want.  I put the Steve Jobs SNL video on my blog because I thought it was funny and it made a point that I wanted to make.  I would have been happy to run a pre-roll and a post-roll ad that NBC served if that was available to me.

My point with this post is that YouTube is a real business, and can and should be a very good business. It’s certainly as good a business as MySpace or Digg is and possibly better if they can work with the content owners to allow them to claim their content and monetize it with advertising.

I am rooting for them because I love the service as a consumer.

#VC & Technology