YouTube Has Found Its Groove, Says Google
-- Google believes YouTube has reached a tipping point. "I think we can declare we found our model," said Nikesh Arora, Google's senior vice president and chief business officer, during Thursday's earnings call.
Arora rattled off a few examples of that model: the Human Rights Channel, its popularity as a major platform for news and live-streaming of the upcoming Olympic Games in London. "We believe YouTube is now a proven winner for the whole video ecosystem. Thousands of partners are making six figures and we're proud to work with major record labels in Hollywood studios on this platform."
YouTube has quantity. Google video sites - led by YouTube - streamed 18.3 billion videos to 154.5 million unique U.S. visitors in June, according to comScore. The company claims YouTube is used by over 800 million unique visitors around the world.
The company is going after quality, too. Its YouTube Original Channels program, announced in November, brings channels from established brands in music (Warner Music Group, Vice, Pitchfork), news (Reuters, the Wall Street Journal), sports (Bleacher Report, SB Nation), comedy (My Damn Channel, the Onion) and other categories. Google will spend $200 million to promote these and other channel partners.
Google's introductory remarks covered the progress made by its acquisitions and investments, although Motorola was not discussed. It's clear that DoubleClick, AdMob, Teracent and Invite Media - and even YouTube, which depends on advertising - fit well into Google's core search business.
Yet Google has not done much outside of search and advertising. Advertising revenue accounted for 96% of the company's total revenue in both the second quarter and first half of 2012. Google may be making a big push into music downloads, movie streaming and e-book sales, but the "other revenues" category is barely noticeable on the company's financial statement. (However, here's some perspective: "other revenues" amounted to $859 million in the first half of the year. That's a pittance for Google but an amount worthy of envy from most other companies.)
Can Google be more than a search engine? The question was debated in a lively discussion between Google chairman Eric Schmidt and investor and entrepreneur Peter Thiel (and co-founder of PayPal) at the Fortune Brainstorm Tech in Aspen, Colorado. Thiel argued Google doesn't know how to properly invest its massive pile of cash ($53.9 million as of June 30) and instead takes "zero percent from [Federal Reserve chairman Ben] Bernanke."
It's not that simple, replied Schmidt. There are limits in things such as recruiting, real estate and government regulation that prevent the company from reinvesting in itself.
"But," Thiel shot back, "then the intellectually honest thing to do would be to say that Google is no longer a technology company, that it's basically Ã¢Â€Â'Ã¢Â€Â' it's a search engine. The search technology was developed a decade ago. It's a bet that there will be no one else who will come up with a better search technology. So, you invest in Google, because you're betting against technological innovation in search. And it's like a bank that generates enormous cash flows every year, but you can't issue a dividend, because the day you take that $30 billion and send it back to people you're admitting that you're no longer a technology company."
Not that this conversation has a direct relation to the music and entertainment businesses. But Thiel's arguments do carry some important implications. (Truth be told, however, Google is far more than search. As Schmidt pointed out, Chrome is the world's most popular web browser, and Android is an incredibly popular mobile platform.) If Google is a search company and will have little competition, content owners will be dealing mostly with Google in piracy matters for many years to come. And if Google is mostly a search company, how will that advantage play out when introducing other products - Google Play, the Android operating system - to the market? ( Google earnings call transcript at Seeking Alpha)
Musicmetric Predicts Big Wins for One Direction at Teen Choice Awards
-- Analytics service provider Musicmetric has crunched its data and arrived at the winners of the Teen Choice Awards days before they were to be televised on Sunday the 22nd. A proprietary mix of "social media metrics, P2P activity in the USA and demographic data" amounts to an observation of how music fans are voting with their time and activities on the Internet, according to the company's press release.
Musicmetric's picks include Carly Rae Jepsen for "Breakout Artists," One Direction for "Breakout Group" and One Direction's "What Makes You Beautiful" in the "Love Song" category.
So what? Well, advance knowledge of award winners could help physical retailers stock up on the correct titles and online retailers prepare display space for the expected winners. Journalists could better prepare their stories. Promoters could better anticipate upcoming concert attendance. It pays to be prepared.
How much the Teen Choice Awards move the needle in these areas is open to question, but other awards shows - certainly the Grammys - have a major impact on music and ticket sales. Of course, picking Grammy winners involves more than consumer data since members of the Recording Academy have their own, unique voting tendencies. ( Musicmetric press release)
-- The Constitutional Council of France has declared the country's private copying remuneration law to be constitutional. The law, passed in December 2010, assures copyright owners receive payments for the purchase of blank media. An exception exists for blank media purchased for professional purposes. ( The 1709 Blog)