Is in trouble?


This article about YouTube on the Washington Post goes to show that in today’s fast changing competitive marketplace, no Goliath is safe from it’s David.

YouTube is at a critical juncture. Since it launched in December 2005, it has ridden a wave of popularity that led Google to buy it in a $1.65 billion deal last year. But now the site must figure out its relationship with major traditional media companies while also forging its business, which to date has relied on advertising posted alongside videos.

The partnership announced yesterday by NBC, News Corp., AOL, Yahoo and Microsoft creates a first-of-its-kind alternative to some of YouTube’s most popular content: TV and movie clips and music videos that were often posted there without permission. Unlike YouTube, the new competitor — which says it will launch its Web site this summer — has proposed a wide offering of videos, borrowing the iTunes model of offering some files for free and others, in this case movies and TV shows, for a fee.

Industry experts aren’t ready to announce YouTube’s demise but say the company needs to revamp its strategy quickly.

According to Eric Garland, chief executive of BigChampagne, an entertainment market research firm, YouTube is not about watching TV, but about connecting and social networking. Considering how fickly the social network audiences seem to be, how effective of a strategy is that?

YouTube has never been a destination site for watching television on the Internet but instead is more like a social network, he said. “People go to YouTube to be seen and to see other people and to be a part of this community environment,” Garland said.

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