Cuban: Bow to Google, Little Guys

Doug Mohney — Mon, 02 Jun 2008 18:32:40 -0400

Chronic blogger and Dallas Mavericks owner Mark Cuban, trying to keep his mind away from professional basketball until next season, takes a deep dive into the future of online video content -- and it ain't pretty for the little guys.

After patting himself on the back for founding HDNet, Cuban says that the biggest problem for independent creators of online video is that their financial future is basically controlled by Google through YouTube! Distribution of clips through YouTube hides the fundamental costs of delivering video through the Internet in a unicast/on-demand model. The more people who watch online video, the more expensive it is to scale larger; the exact opposite of broadcast, where the first user is very expensive, but more users brings down the cost per user (An economics lesson this reporter learned during his days at SkyCache/Cidera).

Mark predicts doom when Google and MySpace and the other players stop subsidizing the hidden cost of video distribution and notes comments out of The Google that the company hasn't figure out how to monetize (i.e. make money) from independent video.

Independent video producers may end up being forced to license their video to portal sites such as YouTube in exchange for free video distribution. Since "99pct" of content producers don't understand how the economics of online video distribution works, it ends up to be a losing game for most budding Internet video moguls. Portal/aggregators gets the SEO benefits of having all that available content at their master site, but content creators aren't going to enough of a return on their work to make it worth while to keep going.

Cuban says there's also some serious technology whooping coming into the pipeline for the glory of (what else?) HDTV and digital cable that won't be nice to online video.

For more:
- Cuban's bitter prophesy for the little guys of online video.

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Cuban: Bow to Google, Little Guys