Video consortium spells déjà vu
It is the year 2000 and the market has crashed. Survivors of the Internet mushroom cloud are few, most eking out a living by earning their real estate license. Despite the dismal picture, travel sites Priceline, Expedia and Travelocity are giving the major airlines a run for their money -- and consumer loyalty. That is, until five airlines came together to launch Orbitz in an attempt to rebuff online discounters. This was no garage-born startup; the airlines coughed up seed money to the tune of $50 million. One could almost hear the bigwigs chucking, "We'll teach those young Internet whippersnappers how to run a travel business."
Indeed, Orbitz was one of the most lauded e-commerce launches of the then short Internet history, earning almost 2 million visitors during its premier month. Yet, today, it is hard to believe Orbitz was ever an edgy, controversial launch at the center of an anti-trust investigation. By 2004, Orbitz was acquired by the travel unit of Cendant, which, in turn, was acquired by private equity firm Blackstone Group last week. Today, new-generation travel sites such as Kayak have turned competition into cooperation by aggregating fares from all sites, including the aggregators.
Which suddenly reminds me that today we are facing a similar scenario, although the product is video, and the players are NBC Universal and News Corp.
The new venture is structured so that firms will distribute their original content episodes via an embedded player on AOL, Yahoo, MSN and MySpace. The goal, of course, is to regain control of content, eyeballs and yes, advertising dollars.
This is very much in contrast with previous coping mechanisms by the major networks and cable channels. At times, the content providers seem almost schizophrenic as they confront YouTube on copyright law and then work a distribution deal with the same entity, work the iTunes route and also dump dollars into their own Web sites to offer full episodes from a branded interface.
Clearly, there is no single strategy, and it is the customer who must face the odd choice of realizing that he can pay to download an episode of "24" on iTunes, watch it for free on NBC.com or perhaps go old school and turn on the tube.
It's no wonder that we turn to YouTube, just as we turned to Orbitz in 2000 and Kayak in 2007. (Which begs the question, how long until the new NBC/News Corp. effort is outmoded?)
If anything, perhaps this signals that the major content providers have finally realized that it is the consumer who decides where and when to consume original television content. And if the consumer wants to consume original content online, then let it be.
Just don't let it be on YouTube.