Tag: business

10 Questions to Ask Yourself before Doing a Startup

I know a lot of people who have dreams of striking it rich on the web. Unfortunately, a shocking majority have frighteningly similar “business” ideas. All things being equal, here are some questions you should ask yourself before starting a business:

  1. Did you share your idea with others? Your idea isn’t going to make you rich; the execution of it will. Thus, spreading your idea around to get feedback is very smart. And nobody is going to steal it: they know they are already months behind you – if anything, they will ask to join you. Spread your idea and get feedback from people you might call a casual acquaintance. They are your best source for honest feedback. Make sure it has appeal before you waste time doing something that nobody wants. (See #7 for more on why you shouldn’t be afraid of idea theft)
  2. Name the top five largest companies in your market. Can’t? You lack market research. It is important you recognize the current top players in your market so that you can avoid being trampled by them. If you don’t know the top five, you are substantially more likely to be doing work one of them is already doing. Aiming for #1 is great, but to get there, you have to pass #93,513 all the way up to #2.
  3. How much revenue do you expect one customer/user to generate, on average per month? If you are just guessing based on what sounds reasonable, you are essentially hoping your business plan is viable — And no investor would ever back you. Good gamblers stick to calculated risks; bad gamblers play roulette.
  4. Does a Facebook group cover your “niche?” If your idea is a social networking service, quit now while you’re a head. Sure, there’s some untapped niches out there, but I would wager money that the odds are in favor of starting a restaurant (10%) over a social networking site (less than 1%).
  5. What happens when the #1 player in your industry notices you and copies your idea? Are you screwed? If you have no contingency plan, you need to address if your idea is viable. It also shows how unsafe your business idea is from other businesses that will inevitably copy you. In order to keep others away from your idea, you need a leading expert in your field, a unique client base, a large initial audience, or a significant technological (or patented) edge.
  6. If your goal is to be bought out, ask yourself why they wouldn’t use that money to build an in-house clone. As in, if you want to sell for $5M, maybe you should ask yourself if your technology is so incredible that they couldn’t reproduce it for $4M and 12 months. The larger the company, the faster they can reproduce your work. Think about it. Features are worth nothing when you are measuring a buyout price since it’s trivial to copy them.
  7. Are you the best person to be executing your business plan? You better believe it. If a business owner is inept, his poor decisions and management skills will kill the company. If his employees are dumb, the same follows. If you don’t see yourself as exceptionally talented at hiring other exceptionally talented people (and keeping them) then I don’t think you’re ready to be leading a company. Please note that great programmers don’t necessarily (and often don’t) make great CEOs.
  8. Do your revenue projections assume profitability to be attained within six months? If so, your projections are entirely unrealistic. You should expect zero revenue the first month, for starters. You should have enough money saved up to run entirely at a loss for the first year. If you haven’t even done revenue projections, you are in bad shape.
  9. Do you already have your first user/client lined up? The answer needs to be yes. Without real users, you are assuming what they want. Your users are not you, and what you find acceptable or straight forward will often not be the same to them. Without a real user to act as a tester, you will end up producing something that nobody wants to use, even if it tries to fill a real need.
  10. If you are doing social networking: are you assuming an ad click rate of 0.5%? If so, you are already in trouble. Myspace reported their click rate is 0.10% and Facebook’s is 0.05%. Also, abysmal click rates tend to come with abysmal click prices. Make sure you know the reasonably expected click rate, which fluctuates greatly depending on the industry.

The bottom line is to ask questions. Starting a business involves an exceptional amount of time and money. If you can’t do the due diligence to make sure you are investing your time wisely, you are setting yourself up for failure.

The Smartest Thing Most People Never Do: Buying a Domain Name

Do you have a relatively unique first and last name? Then buy your first and last name .com domain now (no spaces). Is your name relatively common? Buy a variant of your name (that you use), a shortened version, last name first, with dashes, with your middle name, last name first, or if all else fails, buy about[your name].com. Now. I can’t stress this enough.

If you are one of the following, you have no excuse:

  1. You are employed
  2. You are about to enter the work force within the year
  3. You have your resume online somewhere
  4. You have published material (including academic or research)

Not convinced? Allow me to explain why this is one of the most important things you can do for your long term image and career. Here are the five reasons in summary format:

  1. You’ll be the first result for your name
  2. Having a result is better than not
  3. Controlling your image is actually possible
  4. The Internet is still young
  5. Maintenance is easier

Note: Before I get into any of this, I want to make one other point: Whatever you do, make sure the domain name you purchase matches up with whatever name you decide to use in the work place and on your resume. Three things I implicitly suggest in this article are:

  1. The importance of an online image — Keep in mind that society is evolving to accept “online” as a second “real life.” This is evident in the growing number of people who date people they met online. This was nearly unheard of only five or six years ago. I am confident that this convergence will only continue, and thus I place a high priority on taking control of your online “self” sooner rather than later.
  2. People will search for you — While I can’t say I’ve always searched my bosses, I can say I’ve always looked up potential employees. I hope that speaks for itself.
  3. Make sure you link to your website — Otherwise search engines may never find it. Simply use it as your “homepage” on various sites. As always, be careful where you mention your site since that can be used to find stuff about you (by searching for the domain name itself) that wasn’t meant to be associated with you.

Reason #1: You’ll be the first result

The words in the domain are one of the most important aspects in determining if a result appears first in a search. Thus, if you search for Michi Kono, you’ll see my personal web site comes up #1, despite this blog having far more inbound links and content (this blog is #3).

The last thing you need is for an employer to search for your name, and the first result is some jerk that happens to be similar enough that he or she could be mistaken as you. If that guy says dumb stuff in his blog, writes inaccurate information, or otherwise acts immature, your name and reputation are at risk.

Even if such jerks exist, if you own the domain name, your web site will come up before theirs, which will help convince the employers that the first result is likely the one and only valid one.

Reason #2: Having a result is better than not

Having a web foot print is better than not having one at all. This was the topic of an article a few months back; the point is that when an employer looks up your name and finds nothing authoritative about you, you are just another number in the stack. A result helps put a personality, picture, or persona to the application.

This is amplified if you are applying for a technical position. How am I to feel comfortable with someone’s technical abilities when they don’t even have an online presence? Are they afraid of the Internet? Do they know how to run a blog? Do they not know HTML? The point is, it’s pretty much expected that a highly technical person would have some sort of web foot print. Not having that might raise concerns.

You don’t need to put much on your site. A simple copy of your resume (with highly sensitive information removed) is sufficient. Or perhaps a professional blog (as in, no posting about your party adventures, relationships, or other personal stuff). The point is, have something there.

Reason #3: Control your image

Are you already all over the web? Is it relatively simple to find your junior high blog and your Myspace profile when searching your name? Well, most people can look past those if they are also shown a professional side of you. Unfortunately, if that side of you isn’t available, then they have only those embarrassing pictures and immature posts to judge you by.

By carefully choosing what is on your site, you are decreasing the likelihood that someone will continue to click on the next search result, since they’ve already found what they were looking for. By controlling the top few results on your name, you can dramatically change your online “image.” Everybody has a personal life, but it’s important that you convey a strong professional side — something that is sorely lacking from your Myspace and Facebook profiles.

This underscores the importance of having your domain name. By having [your full name as it appears on your resume].com, you are cherry picking web results for your employer to see since the first result will be your domain. This means keep the web site professional, and don’t publish personal writings, photos, videos, or other material that could some day in the distant future be taken out of context against you (see #5).

Reason #4: The Internet is still young

What will the Internet be like in 10 more years? Who knows. Web sites might become the next business card. People might ask for your web site much like people today ask for people’s AIM screen names. It may become the norm to look up someone when determining if they are worthy of a date. You just don’t know.

As it becomes increasingly accepted that everybody has a personal space on the web, you will likely look back and regret not taking that domain name when it was still available. Now, whenever someone meets you and looks you up, they find a result of some random party animal. Or maybe now it’s a porn website. Nice. It certainly doesn’t help your image, doesn’t?

You could have been 100% certain that someone looking for you would have instead seen your professionally designed web site resume and links to your published works.

Are you that certain a future employer won’t look you up? Are you that certain society won’t become focused on web name searching? Are you that certain you plan on staying 100% off of the net?

Reason #5: Easier to keep up to date

As your life changes and your career or family situation evolves, having only one central location to edit will make things easier. Right now, those of you without your own domains have no authoritative image “source.” As in, to find out what kind of person you are, one must search for you and piece it all together. Some of those pieces might be months or years out of date, which can be damaging when that piece also happens to be contrary to your professional self.

By controlling the first and most relevant search result for your name, you are able to keep your online image fully updated all the time. Someone without the edge will never have a fully accurate online image. This could be an issue when you suddenly decide to enter politics, become a manager, or maybe randomly decide you want to be a more private person. The point is, what’s “okay” to you today, might not be tomorrow. At least with this, you can adapt much quicker.

Conclusion

It’s less than $10 a year.

  • If it keeps you from losing even one interview, it paid for itself.
  • If it helps you land even one date with someone who looks you up, it was worth it.
  • If you ever become involved in politics, it may easily save you tens of thousands of dollars worth a lot of trouble.
  • If you ever decide to start a blog, you will be very happy.
  • If you ever become a famous CEO/actor, you will be angry when you don’t have it, but someone who hates you does.
  • The email address alone might be worth it.

Lastly, don’t bother with the other domain extensions unless it’s a last resort. The .com extension is everything since that’s what everybody tries first. Maybe .net if you’re feeling brave.

What are you waiting for? Go buy your domain name right now. If I still haven’t convinced you, I’d love to hear your reasons (post a comment below).

Charts of Digg, Slashdot, and Reddit Traffic

Here are some numbers on the visitors brought in after I published my popular Google theory. Some of the most interesting stats:

  • Reddit and Slashdot generated nearly the same amount of traffic.
  • Only 74.8% of visitors use Windows (geeky crowd, part 1).
  • Firefox dominates with 65.5% (geeky crowd, part 2).
  • At the peak, I was using 3.0 Mbps when I hit the front page of Digg and Slashdot. I had about 2.0 Mbps sustained from each incident while I was at the top of the main pages.
  • The Reddit traffic surge is very gradual. It is difficult to assess exactly when I hit the front page of Reddit. I think this has to do with the fact that their site customizes the front page for each user. My money is on 4:15PM 03/20/2007 (see chart at bottom).

By siteVisitors by site:

  • Digg: 36,582 (of which 22,581 were redirected to Dugg mirror)
  • Slashdot: 14,961
  • Reddit: 9,296
  • Stumbleupon: 1,270

By day Visitor by day:

  • March 19, 2007: 332 (regular day)
  • March 20, 2007: 13,771 (Reddit front page)
  • March 21, 2007: 17,512 (Digg front page)
  • March 22, 2007: 17,321 (Slashdot front page)
  • March 23, 2007: 2,131
  • March 24, 2007: 1,404

Operating systems

Operating system:

  • 74.8% Windows
  • 13.4% Mac
  • 9% Linux

Bandwidth by day:

  • March 19, 2007: 26 MB (regular day)
  • March 20, 2007: 3,800 MB (Reddit front page)
  • March 21, 2007: 6,340 MB (Digg front page)
  • March 22, 2007: 6,460 MB (Slashdot front page)
  • March 23, 2007: 741 MB
  • March 24, 2007: 462 MB

Browsers Browser:

  • 65.5% Firefox
  • 19.7% IE
  • 5.3% Safari
  • 4.2% Opera

Bandwidth usage graphs:

Note, technically, I made front page of Digg at 10PM on 03/20/2007.

Traffic seems to heavily corresponds with work hours. 😉

Take note: this ordeal cost me almost 15 gigs of bandwidth for a text post. For those of you hoping to make a buck off of Digg, make sure you have no overage charges with your host. Also, make sure you can actually handle the traffic. The spike will bring down your entire server if you aren’t prepared.

Just Take the $1.5 Billion and Run, Idiot (History Repeats Itself)

I’d like to pseudo name this post: Ideas with Dumb CEOs.

Mark Zuckerberg is testing history every time he turns down an offer hoping for more.

In high school, Zuckerberg … created Synapse, a plug-in for Winamp media player that automatically creates user playlists based on previous song preferences … many large corporations offered to buy it for as much as $2 million. Zuckerberg … declined those offers at first. By the time they changed their minds after entering college, the offer was no longer available.

Why didn’t he sell out for $2 million? Because he thought he could get more. History repeats itself.

Some of you may recall that Yahoo was prepared to pay up to $1.62 billion for Facebook a few months ago. But Facebook turned this offer down, waiting for the $2 billion offer.

Well, now we have news that Facebook ads perform worse than Myspace ads by a factor of two, which isn’t surprising considering that Myspace has a more diverse (and older) crowd than Facebook.

Myspace, is a better medium for marketers: for a similar set of advertising campaigns, its click rate, a measure of the audience’s engagement, was 0.10%, more than twice Facebook’s … “Facebook was consistently the worst performing site on just about every campaign we ever ran with them.”

For a company asking for $2 billion with a supposed revenue (not profit) of $150 million, this isn’t exactly great news. Revenues are generated when you have people buying your ads, but if your ads are known for being ineffective, then your buyers – and thus your revenues – will fall.

End the greed and sell. Microsoft, who is friendly with Facebook, hasn’t taken the bait, and they’re notorious for taking losses for market share. If Yahoo can’t afford it and Microsoft passed, how many other companies have the synergy and cash to make such a large investment?

Google? Well, the CEO of Google recently said he has no plans for purchases of that nature. So who else? Hm?

Dumb Ideas with a CEO: ChaCha

what's Digg?The dumbest idea I’ve seen so far this year: a human assisted search engine. The idea is simple, when you need to find something on the web, this search engine connects you to a live operator (“guide”) who then will help you find what you need (searches for you). Why is this the dumbest idea ever? Because the company has failed to address a real need, at least without introducing more problems.

What’s the point of search? Finding stuff, right? Let’s take two cases. 

I need to find something straight forward: in such a case, a Google search will very likely suffice. On the other hand…

I need to find something very obscure: this is the case where a human powered search engine would shine, right?

Wrong. If I can’t find it on Google, how are you going to find it? This morning, I was looking up if the PHP SERVER[‘REQUEST_TIME’] variable takes time zones into consideration. This wasn’t noted in the PHP documentation and several searches came up empty (the answer is that it uses the system time). Would ChaCha technicians know?

No.

If I can’t find this information, how in the world will a $5/hr search monkey find it for me who has a limited (if at all) understanding of PHP? The answer: of course this won’t work.

The more straight forward something is, the more likely a search engine can do the work. The less straight forward and obscure something is, the more likely a human can help if the person were a super computer far more powerful than Google’s 1,000,000 servers and knew the context of everything I was asking. Well, the good news is that they identified a problem, but the bad news is that their solution isn’t the answer.

Okay, what about those cases where a longer session of Google will net you an answer. What’s a decent search time? Five minutes? Well, according to a former guide of ChaCha, they have an economic incentive to drag your search out for 20 minutes. 20 minutes! So which would you rather gamble on: 20 minutes of Google or chatting with a stranger on ChaCha hoping that they’ll eventually find it for you (in 20 minutes)? For that effort, I’d rather chat with friends who might be able to help me. For that effort, I’d go post my question on Yahoo Answers and wait for a reply (last time I tried, took about 10 minutes).

Lastly, the management of the “employees” are clearly a bust. ChaCha uses volunteers as their “guides.” And this is where it gets sick. I can become a guide. I can help other people find stuff by using my “expert” Google skills. For $5 an hour. They’re paying people a minimal economic incentive to do work that requires a high degree of computer literacy and language comprehension. Not to mention it requires constant focus and attention, good customer interaction skills, excellent written communication skills, fast thinking, and a person who is “current” since searches tend to mirror pop culture (see picture). These are not traits you can come to expect out of a person being paid minimum wage.

If a customer pisses me off, I can just tell them off. If my buddy IMs me, I can just ignore the customer until they go away. If I think a customer is dumb, I can just call them dumb. If they are searching for stuff I disagree with, I can send them the wrong links. Why? Because the site pays so little that nobody would ever equate being a guide with their livelihood. People simply won’t give a crap if the end-user hates the experience. Either way, you get paid $5. For all you future business owners, remember this: you get what you pay for.

In the end, this company addressed one problem with a solution that introduced a dozen new problems.

Like I said, this is a dumb idea with a CEO. Oh, and it’s poorly executed to boot.

What Does It Take to Beat Google?

VentureBeat, a site that covers venture funding is covering a company called Powerset that is supposedly getting its hands on a new technology that will let it understand contextual meaning in search phrases, something Google has been trying to do for years. A crazy claim is being made that this technology will allow the company to surpass Google someday. Are they nuts? Have they actually sat down and done the numbers?

Even if the technology isn’t PR bullshit, it’s still 10 years too late. How can a yet un-invented technology be too late you ask?

Because searching has become standardized as a keyword game. When the web first started out, people typed in stuff like “where is the airport?” But nowadays, people will type in “airport location”, which works great. People no longer type full sentences into queries, and that’s a good thing. The web is going onto mobile devices at an increasing rate. This means people are even less likely than ever to want to type out an entire sentence or phrase. It’s all about keywords now.

This company and its venture capitalists misunderstands the race. To fight Google, you can’t just have the best results by a small margin; your results have to smash Google’s results into tiny little pieces. And to do that, you first need to index at least 10 billion websites just to catch up to Google, an effort that takes years. To catch Google, you have to also build a sustainable business around supporting the hundreds of thousands of servers required to crawl and store the entire web. You have to convince people that the extra effort of typing more words is worth it even if your index crawls less pages, which increases the likelihood they won’t find what they want.

Had this technology come out in the days of Altavista, this company might be rolling in the green. But to complicate things further, in the era of Google, the race is no longer just about search. Google provides email, chat, calendar, and word processor services. Google has groups, video, and most importantly the largest and best funded online ad and publisher network on the planet.

The biggest reason why this technology is late is because of the time it will take to overcome Google. Even if a company was truly better than Google, it would take it years just to catch up. Microsoft has thrown billions at the search problem and they are actually losing share to Google and Yahoo. Even though nearly every computer in the world have MSN as their default home page, people actually type in “Google.com” and search from there. Google is that entrenched. It’s even in the dictionary now!

And even with the vastly superior search, the new competitor would need to fight Microsoft and Yahoo, both which are companies that own the top two websites in the world. The fact that these two companies have immensely popular portals is one of the big reasons they can still compete with Google.

I’m not saying fighting Google is impossible. But it’s improbable, especially if you are a no-name company. Talking about a yet to be officially announced technology as if it is guaranteeing this unknown company a top spot is just a grab at publicity. Any realistic analysis would show that unseating Google would take billions of dollars in marketing, hundreds of millions of dollars in infrastructure, and a general assumption that Google, Yahoo, or Microsoft will stand still.

I’d love to see them try. But even if my friend told me, “Michi, I try this cool search engine that understands what you say,” I still wouldn’t switch. In a nut shell, I won’t switch search engines for that 0.1% time where I can’t find what I need. Neither would most people.

My Apple Prediction Coming True

Check it out, my prediction doesn’t sound as crazy as it did a few weeks ago. Someone else is now reporting Apple may drop the  big clunky hard drive versions of their iPods.

Given that he sees flash storage capacities up to 32GB as being cost-feasible for the initial introduction of a new flash-based video iPod later this year, Tortora said the question becomes whether or not 32GB contains sufficient capacity to store video content.

Tortora explained that a 30GB of HDD-based iPod is sufficient for around 40 hours of video content, but only has about 3.5 hours of battery life for video playback. He added that replacing the hard drive with flash memory would allow for an increase of about 60 percent in battery life to 5.5 hours of video playback.

Well, according to those calculations, one charge only lets you see 1/8th of your content, making video viewing not quite as attractive as the audio capabilities. And until the flash based iPod goes wide screen, video viewing won’t be a major factor anyway. Right now, iPods are used for music first, video second.

Only 1 percent of the content items played on either an iPod or iTunes by iPod users was video content, with that number only growing to 2.2 percent among video iPod users. It appears that during the other 97.8 percent of the time, video iPod users are still just listening to audio content such as music and audio podcasts.

Of course, this could be because video is not yet ready for prime time in the iPod’s current form. Slap on double the battery life and a bigger screen and maybe we’ll start to see those numbers go up. I mean, really, who wants to view a video on a tiny ass screen anyway? Well, maybe people would if they gave it a try, but right now, the idea is just not yet mainstream.

Steve Jobs: Let’s All Get Rid of DRM

Apple’s CEO wrote an open letter today decrying DRM. I’m happy to see it. In it, he wrote a really interesting factoid about the consequences of DRM:

Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full.  This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats.  Its hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future.  And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.

The point made is that DRM isn’t really locking people in because most of people’s music isn’t from iTunes.

He’s sneaking around the issue. 22 songs works out to $22 “invested” in the iPod. That’s $22 extra “tax” every competitor of the iPod must offset just to let the consumer break even for switching. That doesn’t include the cost of learning new software, the risk of the new player sucking, or the time spent re-buying and setting up the new player. Nevertheless, the point is that the $22 plays a significant role in keeping the iPod competitive.

This may help explain why the cheaper prices haven’t persuaded consumers to switch, for example, to the Zune.

Zune’s success is diminished though when we consider that it took 9% of the hard drive MP3 player market. These numbers also do not include sales from Apple retail stores, which sell only iPod players.

Anyway, Jobs also talks candidly about the idea of DRM-free media:

Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat.

Don’t worry, Jobs. The day will come, and your iPod’s iron grip on digital media will help it happen.

Wal-Mart’s Movie Download Business: Self-Sabotage Likely

So it seems Wal-Mart is entering the digital movie download service. But they’re doomed to fail. I combed the article looking for how Wal-Mart is going to distinguish itself from Apple’s iTunes. You know, that competitor that has nothing but dominated the digital download market? Instead, I found that the only thing they could talk up was:

It will have access to 3,000 productions, including films like “The Devil Wears Prada” and “Little Miss Sunshine” and TV series like “24” and “Veronica Mars.”

So they’re going to have more movies than iTunes? There are three questions anybody is going to ask: Do any of those 3,000 movies play on my iPod? Consumers won’t be happy to hear the answer. And will you be able to burn the download to DVD? No.

Mr. Swint of Wal-Mart said the company would create discounts that encouraged shoppers to purchase both DVDs and digital videos.

Wow, so what part of this will be appealing to the average consumer? The price, perhaps?

Nope. The worst part is the pricing.

To avoid running afoul of studios, who want to protect their DVD business, Wal-Mart said the price of a digital movie would be comparable to that of the DVD at its stores.

How will Wal-Mart become king of the movie download business if they are purposely inflating their prices. If there is a better form of self-sabotage, it would be the equivalent of oil companies building electric cars, but pricing them too high to protect their gasoline market. We all know how that would turn out.

But the shooting-of-feet doesn’t end there as evident by this little tidbit:

It will have to pass the same test all services do at Wal-Mart.com: to lure customers into Wal-Mart’s 4,000 stores, to buy groceries, electronics and clothing… “If you are doing digital distribution, you are doing it because you do not want to be in the store,” said Mr. Goodman of the Yankee Group.

The single greatest incentive to buy a digital download is so you don’t have to get off your lazy butt. Unfortunately, the success of Wal-Mart digital downloads would also means decreasing a customer’s likelihood of entering the store – something they will stop at all costs.

Wal-Mart seems to have too many conflicting interests to want to make this work. This will fail just like their online DVD rental business.

Update: It seems TechCrunch seems to mostly be in agreement, mostly focusing on the price being “too high.”

Content Owners Seem to Hate and Love YouTube (mostly hate)

Today, I read news that Viacom has ordered YouTube to pull down 100,000 videos that allegedly violate their copyrights. I don’t get it.

Clearly, the problem is that nobody truly believes free online exposure is a good thing. And you know what, perhaps it isn’t always. Nobody knows right now because the idea is not tested enough. Here’s what happens.

  • The content producers makes something cool, such as the Colbert Report, sells some TV ad spots, and puts it up on cable. They reap the rewards.
  • Then some no name punk comes in, strips out the commercials, and puts the entire show, for free, on the Internet.
  • This gives viewers a chance to see the show without turning on the TV, thus avoiding the ads.

At least this is how Viacom and other major producers see it. And in response, many of large networks have put up their own crappier sites that host the content infused with ads. But for some reason they can’t fathom, no matter how hard they try, it fails to catch on.

They blame YouTube for this. And subsequently start the lawsuits. But YouTube isn’t without blame here. I can’t speculate on what has been offered, but I can see some very important features that need to be in place before a major content producer signs up:

  • The ability, much like on videos on abc.com, to have limited fast forwarding so you can’t play a particular segment of a video without first viewing the ad for that section. It’s a reasonable restriction that most consumers will not mind.
  • Copyright detection software going live.

A while ago, it was speculated that YouTube had some copyright detecting software coming up. Well, here’s how it should work:

  1. Viacom uploads a video with ads into the special sponsors section of the website
  2. It is encoded with a special filter that watermarks the entire video
  3. If anybody else re-posts the video on YouTube, the content is automatically flagged, taken down, and the user is suspended.

Let’s see some compromise here.

No, Viacom, people are not demanding free content. No, RIAA, people who pirate aren’t doing it because they hate paying for music. The point is, the market is demanding content be online and in an easy to access, less restrictive manner. People will pay for this. It may not be the arm and leg some producers are hoping for, but with the reduced distribution costs and elimination of some middlemen it should be a sound idea to at least attempt the transition.

So what is with all of this all or nothing bullshit? It can’t work. If you give everybody nothing, people will have a greater motivation to circumvent your rules. The crowd has spoken, and a single content producer’s website will never gain real traction with the video viewing demographic because people want to be able to go to one place to quench all of their video watching needs. Viacom can’t fight a tsunami of Internet democracy – something the RIAA/MPAA have proven damn near impossible even if you sue 10,000 people.