67 Billion Reasons

Wired magazine has an outstanding feature on why Google spent $1.65 billion to buy YouTube, explaining that with a broken TV advertising model (shrinking audiences of people who skip the commercials with their TiVos) but still nets $67 billion a year in revenue, the YouTube price for a place where millions of people gather to watch “Monkeyvision” doesn’t seem such a huge price. The trick will be figuring out a way to incorporate advertising without killing what people love about YouTube.

The videos highlighted by Bob Garfield on the first page of the story (especially the Ball State University sportscaster and the Evolution of Dance) are worth the price of admission all by themselves. Actually, that’s part of the problem for on-line video so far. There isn’t any price of admission. The only price is the time it takes to watch. And as my former boss used to say, there is unlimited demand for free stuff.

The main point of Garfield’s story is that TV isn’t just threatened; the decline is inevitable. The only question is what will replace it and how its owners will find a way to make it profitable.

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Author: Lee Aase

Husband of one, father of six, grandfather of 15. Chancellor Emeritus, SMUG. Emeritus staff of Mayo Clinic. Founder of HELPcare and Administrator for HELPcare Clinic.

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