"A small group of innovators introduce a new technology that has the ability to entertain and engage people on a massive scale. Advertisers willing to risk money on this untested platform are hard to come by. Content owners are reluctant to embrace it for fear of alienating their existing audiences. And experts hail this new platform as signaling the demise of another. As some of you may have guessed, this is not only the story of YouTube. The year is 1941, nearly 70 years ago, and CBS has just launched its new television network amidst cries that it means the death of radio."
The parallel to TV over 50 years could not be stronger.Â However, looking backwards, what did happen?Â Although radio has been losing its audience over the years, it has however not been “killed” by TV as per se.Â People still regard it has a different medium and although I am sure TV took its place in being the biggest advertising medium, the two media can co-exist.Â Further more, there is still enough of a market opportunity for radio to branch into satellite radio. I believe on demand internet video can co-exist with broadcast TV, in some shape or form, as people will aways enjoy having people pick out programming for them as well when they don;t have anything specific in mind. For the business model, for established TV content such as TV shows, the model will still be the same, advertising based on CPM.Â Ad dollars will slowly but surely migrate over, as its a much better value to the user to be able to watch their favorite show anyplace anywhere.Â Therefore, Hulu, is definately the right way for TV networks to go.Â Kudos to TV networks for willing being able to make the investment as its always a tough decision to hurt your cashcow to make bets on something that isn;t proven (wired has a great article about the story of Hulu).Â This might be the bet that saves them from similar fates of corporations that weren’t willing or where too late to place bets (Kodak, EMI/BMG/WARNER). However,Â It will be the monetizing the longtail of one hit wonder (user generated maybe?) videos that will need a more revolutionary business model.Â Amie Street for inspiration maybe?
Sequoia issued a presentation for startups explaining what situation the US was in now and how it affected startups from raising capital, operations and exit.Â Good read on the current situation even for non-startup people.Â Expand this post to see the presentation in slideshow format. (via Joi Ito)