King Kontent

By Ivan Gevirtz

created: Monday, February 13, 2006
updated: Friday, August 10, 2007

In my two articles on mobility, Mobile Video and Drivers for Video, I discuss the value of using cell phones to generate copious amounts of relatively low quality video.  These articles rest on the assumption that content is king, and that there is a market for this type of media.

But is there really a latent market for video content, and if so, how can we capitalize on it?  Clique is not prepared to become a media house.  Indeed, with the AOL - Time Warner merger failure, it became clear that the core competencies required to make software are vastly different that those required to make money off of media.  Making software requires engineering prowess.  Selling media requires marketing prowess.  The record companies are aware of this, knowing that much of the value they make on their recordings comes from things like the perception of scarcity value.

On the other hand, some media companies are "online" and digital.  Getty Images has a highly profitable business.  However, they have something like half of the worlds stock images, and have an extensive network of relationships and people who add new material every day.

Google, on the other hand, is trying to sell videos.  Not Google videos, mind you, but videos submitted by their users.  Google still makes money advertising to the users who submit and watch videos.  They have a video site where they allow users to post video and charge people to view them.  Google has the users, and is trying to provide them a marketplace for the users media.  Google makes money on targeting advertising to the people who post and view videos.  They do not try to create value for the videos.  They are just a broker.  Revver has taken the notion of paying for videos by advertising a step further.  They append an advertisement to the end of the video, and then encourage users to pass the video around, such as by emailing it.  However, neither Revver nor Google market the videos.  The value of the video is determined by some process independent of these software houses.

What lesson does this hold for Clique?  I don't believe Clique can or should get in the marketing business.  To date, we have had no wins with this approach.  On the other hand, we have had a lot of technical wins, and build interesting software.  Since Clique's core competency is in building media-related products, it seems natural to think that collecting and monetizing a media collection may be the way to go.  Should we monetize via advertising or selling the media?  I'm not sure, however, that this conclusion can be so glibly drawn.  I'm not sure what the business model of Vlogcrazy is, but somehow it seems like it requires people to go to the site.  And this means we need to generate demand for the site by building a market and a brand.  Again, something we have not proven our ability thus far to do.

On the other hand, we are great at enabling all sorts of video applications.  We can enable video blogging.  We can enable Video Emails.  We can enable Video IM.  Video Phone, Video Postcards, Video Greetings, Mobile Video.  We've done all of this already!  But the questions remain, whose video, and what content should we enable?  Surprisingly I'm not sure that we need to answer that question.  That's the problem for a partner company.  A company who knows how to monetize video.  We need to provide them with the video capability, and allow them to turn this into valuable revenue.  In Mobile Video, I discussed how this might look for cell phone video to a news agency.  If we want to make money with our technology, I think this is the right approach.  I think we need to find outlets who know how to make money from media, and enable those outlets to get more and higher quality content, and to enable them distribute it to more targeted and more numerous users of theirs.

While I do believe this is merely one potential avenue to success, for us, given our current strengths there are some major downsides.  If we require another company to build the market demand for our technology, we may fail when they fail to do this, and not have any control or ability to turn things around.  If that company is NOT a media company, my belief that they can succeed is low.  This is why I don't believe in going after telco and cable operators.  They don't know how to generate demand for content.  They just transport the content.  TV networks, news agencies, successful web sites, record companies, movie producers, these people know how to generate demand for content.  We're still requiring them to do our work for us.  But at least we're using them to do what they do best.