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My Investments in the Video Online Space and My Take on the Whole Sector

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This week I ran into Chad Hurley of Youtube at Google Zeitgeist Europe and I mentioned to him my view that while incredibly successful and simple to use, YouTube needs certain improvements to keep growing at its frantic pace. These are going multilingual, going live and greatly improving its editing tools. But talking to Chad I realized that his vision, (and who can prove him wrong as he has built the fourth most popular web site on earth?), is to keep things simple and massive. So long as Chad is going for the Microsoft approach to video my take is that there's room for a few Apples to grow. I have been investing in some of them as I see them very complementary to Fon, the company that I founded and manage and in which Google and Skype are my investors.

Currently if you produce video content of any kind and are purely looking for audiences YouTube is the place to be. But if you are like my friend Loic Le Meur, France's top blogger, or myself with a personal blog with over 200K viewers, platforms such as Vpod are better because you can control them more. And in any case, in a world of free video posting you are not forced to choose. In my case I post videos in Sevenload, YouTube and Vpod (I am an investor in Sevenload and Vpod). I choose YouTube for the audiences. Vpod for the superb quality of the platform and Sevenload for the ease of use and the ability to upload both, pictures and videos. I am also an investor in Joost. Joost is about competing with YouTube not on user generated content but on studio generated content. Joost has recently managed to sign up Viacom, which left YouTube, and has become a better alternative for those who focus on quality.

The other platform that I invested in is Azureus. Azureus is an open source project that is now trying to make it as a content delivery platform in the form of Vuze. Azureus is the most popular Bit Torrent client on the internet and most people use it in combination with Torrent search engines like The Pirate Bay another European site that has gone as far as inspiring a political party that fights what they see are oppressive intellectual rights and so far have been able to win. In general, European views on intellectual properties are more liberal than those in America.

Mobuzztv is another interesting model. Mobuzz is not a platform. You cannot send your videos to Mobuzz nor can you download other people´s videos. But what Mobuzz does (4.5 million downloads last month) is to create original content for the internet. Mobuzz competes more with Techcrunch or GigaOm than with YouTube. With so many platforms relying on user generated content I now see a great opportunity for those who are doing more original work. Another site in this space are Rocket Boom

Another European venture is Dailymotion, by now only second to YouTube in audiences. What distinguishes Dailymotion from YouTube is what differentiates Europe from USA: morality. This is well explained by Bill Maher. YouTube has to follow American puritan standards which confuse nudity with pornography and whose concept of intellectual rights is stricter than that in Europe. YouTube also censors videos on Tienanmen Square for example in order to continue its growth in China. Daily Motion does not censure in general.

Then there's the platforms in which you video blog yourself live and create live content. There's Comvu, whose web site is unoriginal but its technology is pretty good and allows you to "vlog" live using a Nokia N80. BlogTV, Ustream, Kyte.tv and Operator11 allow you to do live shows off Macs and PCs. Personally I think that if YouTube launched YouTube Live it would take the wind away from all these sites sails but so far YouTube is not doing it. Live brings three huge markets, pornography which most want to leave out but few find it extremely profitable, reality shows and the long tail of sports (soccer mom films live soccer match other parents watch from home/office).

Revver is worthwhile mentioning cause it shows that there's a lot of content to be uploaded out there that is worth seeing and not made by major studios.

Another remarkable success are the two incredibly popular sites for uploading and downloading videos and movies called Megaupload and Rapidshare, the 14th and 19th most popular web sites in the world. Still I have had a hard time understanding the massive popularity of these sites as they are much harder to use than Azureus. If anything they show that while people are not willing to pay for video content in iTunes or in cash, they seem to have not problem in paying for it in sweat.

And then there's an enormous proliferation of streaming on the internet now that makes downloading unnecessary. Sites like Alluc index video content that is then hosted in many web sites around the world and just show content without paying royalties.

Another strategy are sites that do pay royalties to show live TV from around the world, like JumpTV who Morgan Stanley took public last year. Unfortunately for JumpTV shareholders sites there's tons of competition, some pay royalties, some don't. All these sites compete as well with the sites of all the major TV networks around the world which hesitate between showing their content for free or not and in their sites or on YouTube. Joost also competes in the market of live TV.

Lastly, all of those sites compete in some way with the DVD industry which is also divided into the players who pay royalties and those who don't and now new formats like Blu-Ray that compete through quality cause let's face it, the internet has a real hard time passing true quality. Great quality requires 1GB streamed every 15 minutes, not easy to do over the internet. Even my 12-year-old son who hates to pay for content loves to have a few of those Blu-Ray discs cause after all the streamed stuff Blu Ray feels like going to the movies.