There’s this gem from an interesting CNET report today on how Hollywood is warming to YouTube.

Hulu may have already hurt YouTube and Google in one significant way, according to one media executive. The portal has helped to establish revenue splits between online video distributors and content owners.

“The days of the 50-50 split between content owners and Web sites are over,” said the executive. “Content owners are not going to take less than 70 percent anymore and some are getting 90 percent. In Hulu’s case, 70 percent goes to the content owner. Hulu takes 20 and the Web sites who have distribution deals get 10 percent.”

These aren’t close to what Google was willing to accept in the past, but the search giant now appears more willing to compromise, said two studio executives.

I think this is part of a bigger trend that we’ll see developing in the next 24 months, as the revenue pendulum swings in favor of publishers. ESPN started the ball rolling by declining to take ads from the ad networks anymore, choosing to do its own ad serving. In so doing, it announced to the world that it and it alone would determine the value of its content.

Mark Cuban is his usual out-of-focus self with a post (Hulu is kicking Youtube’s ass) declaring Hulu the winner over YouTube. The problem, of course, is that these two companies are not now and have never been in competition, although Cuban thinks otherwise. To Mark, YouTube has always been about the theft of copyrighted material, so he never really bothers to examine what makes it hum.

It’s all about the money to Mark. A media business can only exist if its revenue model is built around scarce content, so he proclaims Hulu king and makes a prediction:

…by next year, not only will Hulu have more monetizable traffic than Youtube, but it will have more total revenues than Youtube as well. It wouldn’t sup rise (sic) me if they are already at a higher annual run rate than Youtube.

Here’s the thing. Mark’s probably right, but in thinking of YouTube only in sustainable business model terms, he misses the larger picture and continues to prove himself ignorant about the Web. Sometimes there are legitimate reasons to do things contrary to the P&Ls of the past, if they work towards a longer term return (why doesn’t Google sell ads on its home page?). He has always viewed YouTube through biased eyes (those damned thieves), and for a smart guy, he sure comes up short here.

“Youtube hides behind the Digital Millennium Copyright Act,” he writes, as if its reason for being is to steal copyrighted material and profit from it. If it looks like a red herring and smells like a red herring, then it’s probably a red herring.

YouTube is about sharing, people sharing what they see and what they make, things we’ve been doing since before the term “media” referred only to the home of the Medes. In the 15th Century, the Roman Church didn’t want the Bible being shared with the laity, because they felt they “owned” it. I took my 45s with me to friends’ homes back in the 50s, so that they could hear the music too. Back then, the record industry knew that exposing people to the music was the best chance they had to sell another record.

YouTube’s tentacles within the personal media revolution go on for miles, because people don’t use it to view stolen goodies. Its business model hasn’t been written yet, and those who insist on looking for one just don’t have the patience to wait. I use YouTube to post videos that I’ve made on my MySpace page. There are lots of ways I could do that, but the Flip camera and YouTube make other options seem obsolete. How does YouTube gain from that? For one thing, they keep anybody else from charging fees or profiting from interruptive commercials, and in so doing, buy time for an acceptable business model to develop.

But that’s not the point. We’re in another Gutenberg moment here and the “church,” led by priests like Cuban, want absolute control over material the law tells them they own. I don’t think anybody objects to that concept, but the more people like Cuban press the matter, the more unseemly the whole thing seems.

I love Hulu and have expressed that love before. I watch “House” via Hulu, and while I wonder why there’s such an emphasis on clips from shows instead of the shows themselves, it’s a great experience. But I go to Hulu knowing what I’m getting, just as I go to YouTube knowing what I’m getting.

They’re two different things.

So YouTube has announced the hiring of a news manager and the launch of a citizen journalism channel. Don’t be fooled by the raw nature of this, folks, because you may be looking at not only future hires in your community but also future styles in presenting video news. This is an unorganized group with YouTube (Google) playing its typical support and distribution role in sidestepping traditional media companies to present a form of journalism that most professionals deem far beneath them.

The news manager is no novice when it comes to citizen journalism. Olivia Ma recently graduated from Harvard and was a regular contributor to Dan Gillmor’s Center for Citizen Media blog.

Gillmor, author of what is widely considered the original manifesto of the citizen journalism movement, We, the Media, told me via email this morning that the YouTube project is another worthwhile experiment, and “I’m looking forward to seeing how it works.”

“But as they monetize this,” he added, “I hope they’re going to find a way to reward the people who are doing the work. I’m not a fan of business models that say ‘You do all the work and we’ll take all the money, thank you very much.’ I also hope they’ll give people a way to post using Creative Commons licenses, which are all about sharing information, as opposed to the currently restrictive terms of service.”

I agree with Dan on the above, and his message is relevant for all media companies trying to “monetize” user-generated content.

But beyond that, this move by YouTube demands our attention for its assumption that anybody can “do news” and distribute their work for free. The pamphleteers of journalism’s past would’ve loved it.

(Originally posted in AR&D’s Media 2.0 Intel newsletter)

As if it really needed defining, right?

In an ongoing case that continues to baffle common sense, the Electronic Frontier Foundation (EFF) has refiled its suit against Universal Music Group for bullying YouTube into pulling a 29-second clip of little Holden Lenz “dancing” to background music of the Prince tune “Let’s Go Crazy.” The original suit was tossed out by Federal district court judge Jeremy Fogel in San Jose, who said the EFF hadn’t proven their claim that the clip’s fair use of the song was “self-evident.” Any sane human being could recognize that it was, so the EFF’s new case spells it out, and it’s precious:

“The video bears all the hallmarks of a family home movie–it is somewhat blurry, the sound quality is poor, it was filmed with an ordinary digital video camera, and it focuses on documenting Holden’s ‘dance moves’ against a background of normal household activity, commotion and laughter,” the new complaint charges. “The snippet of ‘Let’s Go Crazy’ that plays in the background (not dubbed as a soundtrack) of the Holden Video could not substitute for the original Prince song in any conceivable market.”

Kudos to the EFF! There’s no reply from Universal yet, and they’d be well-advised to just settle the thing, because if this makes it through the courts, it’ll become a fatal setback in their efforts to win the personal media battle through the legal system.

It was, as we say here in Texas, dumber than a bucket of hair to push this case in the first place (the video had only 29 views when Universal lawyers found it - now over 463,000), and anything from here on out just adds to the foolishness of Universal’s actions.

In a pretty significant announcement this morning, Google is broadening the scope of open applications that developers can use to interact with YouTube and its player. The end game, according to TechCrunch’s Erick Schonfeld, is the original concept of Google Video — to host all of the video on the Web.

Once again, instead of making it easier to search videos elsewhere, Google is making it easier to host videos on YouTube. Except that the new APIs allow people to upload, watch, search, and comment on the videos on other Websites. The key here is that the videos themselves are hosted on Youtube’s servers…

…YouTube is not just white-labeling its video-hosting infrastructure for other sites, devices, and desktop applications. It is offering video-hosting for free. This could prove highly disruptive to other video-hosting platforms such as Brightcove, Maven Networks (now part of Yahoo), and Move Networks.

By offering developers the ability to actually alter the user interface of the player, Google is making it very hard to say no. One day, we may see local news sites using the YouTube player instead of their own. If they can customize and monetize it, why not? The hosting and bandwidth costs go away. It certainly raises the bar for creating an appealing local video portal.

Google continues to confound the experts by giving things away. And that, my friends, is why it is so bloody disruptive.

I had barely pushed “publish” on my last entry when Apple decided it wouldn’t wait until the NBCU contract expired in December and announced that NBC’s fall line-up wouldn’t be available via iTunes. According to Marketwatch, Apple will also drop other NBCU programming.

According to a statement from the company, NBC refused to renew its agreement with iTunes after Apple balked at paying fees that it said would more than double the wholesale price for each NBC TV episode.

Apple said NBC’s demands would have raised the price of NBC shows to $4.99 an episode from the current $1.99 price tag.

“We would not agree to their dramatic price increase,” said Eddy Cue, Apple’s vice president of iTunes, in a statement. “We hope they will change their minds.”

A spokesman for NBCU denied that they had asked for double the wholesale price, adding, “Our negotiations were centered on our request for flexibility in wholesale pricing, including the ability to package shows together in ways that could make our content even more attractive for consumers.”

Sorry, I don’t buy that. Nobody from Hollywood does ANYTHING that makes things “more attractive for consumers.” It’s all about money, and Apple — the folks who invented this source of revenue for everybody in the first place — is trying to help you and I by keeping prices low.

I find most interesting in this article from Marketwatch the comments of James McQuivey, an analyst at Forrester Research.

“What they’re going to have to realize,” McQuivey said, “is that out of all the dozens of shows available out there, most people only want the four or five most popular shows. And if those aren’t there, those consumers are just going to walk away.”

This is conventional thinking, but it’s also the kind of stuff that got traditional media in trouble in the first place. Let me repeat what I said in my previous entry. Losing this content hurts NBCU much more than it will hurt Apple. Let’s watch and see what happens.

Here’s one that bears watching. NBC Universal has told Apple that it’s not going to renew its contract with them to provide programs via iTunes. According to the New York Times, NBCU wants to do things with its programs — such as bundling — in order to increase revenue. Apple’s model is one of simple, straightforward pricing, $1.99 per episode, $9.99 per movie. Rafat Ali at PaidContent summarizes:

NBC was in early on iTunes’ video offering, and now accounts for about 40 percent of downloads…The current two-year deal extends through December, so the 1,500 hours of NBCU programs will remain available on iTunes at least until then.

…This also comes as NBCU-Fox video joint venture Hulu is about to get off the ground, where NBC will be putting most of its shows for free streaming and distribution.

This could be just rhetoric in negotiations (after all, the NYT story is based on “a source close to the negotiations,” which is mediaspeak for someone who stands to benefit from releasing the information), but I think there’s an important element to note.

If NBCU’s content accounts for 40% of downloads, they are making the assumption that it is their content that drives those downloads. They no doubt use that number amongst themselves for high-fives and encouragement that content is still scalable via the Web. Why else even think of playing chicken with iTunes? The assumption is that “the people” so love our content that they’ll come where WE want them to come in order to get it. It’s the same logic that drove Viacom’s decision to sue rather than work with YouTube.

Apple, on the other hand, would argue that it is the presence of the content on iTunes that drives the downloads, that people download their products, because, as an aggregator, iTunes makes it easy for people to find them and download them.

So who is right? On this question rests much, and it’s the stickiest of all wickets for traditional media, because the business model of Media 1.0 doesn’t play well in an age of distributed media.

The gamble NBCU is making is that they can still make business decisions with their content that don’t include their customers. While I do believe that serious “Office” fans will go where they have to go to get their downloads, forcing everybody to do this is ultimately a fool’s folly, for most people will opt for the path of least resistance.

“Let’s see, Office isn’t here anymore, so what else do they have?” It is a critical mistake to assume that iTunes downloads will go down by 40% simply because NBCU decides not to play. Every other content creator that does business with iTunes is hoping NBC will go away, and this is the essential problem. NBCU may be able to increase its revenue, but eyeballs that go away are eyeballs that aren’t coming back.

If NBC were to leave, it would also hurt iTunes, because its ability to aggregate and present everybody’s content is its value proposition. So it’s not an easy matter for Apple either.

In the end, though — and as has been evidenced so many times in recent years — it is foolish to mess with empowered consumers. Who negotiates for them?

According to data provided to me by Hitwise, Viacom’s Comedy Central and MTV websites have lost market share since the company ordered YouTube to pull copyrighted videos from the popular online video aggregator in February. This despite clear statements by Viacom that YouTube was standing in the way of its ability to make money from its content on its own sites.

Viacom assumed the traditional model of scarcity would reward their strong arm tactics against YouTube, but it hasn’t, and it won’t, because Viacom — like so many other mainstream media companies — can’t see beyond the traditional economic walls that surround its empire. Abundant micro-media is killing (or already has killed) the old model, and it shows no signs of letting up. You only need to consider that while traffic to comedycentral.com has gone down 11% since February, and MTV.com has seen a 14% traffic loss, traffic to YouTube has gone up an amazing 39% during the same period.

In March, Viacom CEO Philippe Dauman told shareholders, “Our content was a substantial part of the traffic on (YouTube). We are very pleased to have more traffic on our sites since we took down our video from YouTube because we are able to monetize that as opposed to someone else doing so.” Apparently not.

Moreover — and this is truly amazing — during the same period, YouTube has been providing a steadily increasing amount of traffic to those two sites. That’s right. Upstream traffic from YouTube to comedycentral.com has increased 17% since February. Traffic from YouTube to MTV.com has gone up a whopping 38%.

So let’s accurately understand the picture. Viacom sued Google to remove copyrighted videos from YouTube, because YouTube was in the position of making money off Viacom’s content. In so doing, they assumed that people who wanted to see the various Jon Stewart (and other) clips would make their way to comedycentral.com, where they could have the same experience offered on YouTube, except with Viacom’s ads attached. From a traditional media perspective, this makes perfect sense.

However, the opposite has happened. Not only have people not gone to comedycentral.com to see the clips in numbers anywhere near YouTube’s, the site and MTV.com have lost market share since Viacom pulled the clips from YouTube. YouTube, meanwhile, continues to show explosive growth and is actually feeding Viacom’s properties with an increasing amount of traffic — all without compensation, I should add. (Where’s the quid pro quo love, Mr. Dauman?)

And without all those people swapping and emailing the Stewart clips or the Colbert clips, their influence will begin to decay as well. Out of sight, out of mind. And soon the audience for these shows will be limited to hard-core fans and nothing more.

I know this drives people nuts, but we simply cannot ignore the power of the personal media revolution in what’s taking place across the media landscape today. The Media 2.0 disruption isn’t about online brand-extension, multi-platform delivery schemes, deals with Joost, or anything else that tries to protect the Media 1.0 paradigm. And it’s not (just) about technology either.

It’s all about people — informed, empowered, enabled, involved, and connected people — people who are fleeing the relentless assault of mass marketing and building new value chains and a new media economy in the process. Involving ourselves in all of this is more than just the right thing to do; it’s an absolute necessity of doing business in the world to come.

(Edited 7/9 to reflect market share versus “traffic”)

I’ve been busy these last few days, and I actually decided to take Father’s Day off. Hence, I’m a little behind on my writing.

Here are some things I think are important:

Milestone: NBC Universal has changed the name of NBC Universal Television Studio to Universal Media Studios. This is smart on a number of levels (which I’ve written about in the past), but the most significant is the message it sends internally. We are no longer television stations; we’re local media companies, and the sooner we begin using that language, the quicker we’ll find ourselves evolving.

YouTube has launched a re-mixer for certain videos. The application allows users to unbundled and rebundle the videos to create their own versions. Photobucket, which was recently purchased by Rupert Murdoch’s MySpace, has similar functionality, and the early analysis suggests that Photobucket’s is much better. This is another concept that could (and should) be easily adopted by local media companies.

Shelly Palmer offers the provocative suggestion that local television — in medium and small markets — will go the way of radio stations. They’ll be stripped down and automated to achieve the highest return on investment for the owners “with most of their revenue coming from the use of their new government granted digital spectrum.” This is a chilling thought and one that doesn’t bode well for local broadcast content, but (as if we needed one) it’s another reason to be aggressively pursuing Media 2.0.

Over at Lost Remote, my business partner Steve Safran writes of a new Pew Poll reported in Atlantic Monthly showing Americans’ knowledge of news events hasn’t grown since the advent of 24/7 cable news with one exception:

The most knowledgeable Americans were those who got their news from the Web sites of major papers and those who watched programs like The Colbert Report or The Daily Show; they correctly answered 54 percent of the questions about current affairs, while regular viewers of local TV news and network morning shows got only about 35 percent right.

Steve points out that this could simply be that viewers of the shows need to have awareness of events in order to get the jokes, but the study should raise a few eyebrows.

Finally, another newspaper sports department was threatened by the NCAA for blogging during a live college world series game. This time, it was The Oregonian, and the blogging was taking place from their offices in Portland while watching the games live on ESPN. In the words of the immortal Frank Barone, “Holy Crap!” A week ago, a Louisville Courier-Journal reporter was tossed from the press box in Louisville for doing the same thing. The only way this can be completely enforced is if sports teams or associations ban all cellphones or PDAs from their games, and that’s not about to happen. Somebody’s going to take this to court, and the ruling could have profound implications for all sports.

In a headline that needs to be seen to be believed, Online Media Daily says “Consumers like 30-second Pre-Rolls, OPA Study Finds.” OMG, where to begin?

Upon reading the story — and one with a better headline at PaidContent.org — the truth is revealed. 30-second pre-rolls are “more effective” than shorter ads, more effective for the advertiser. This is a sophisticated study that the Online Publishers Association did with the Online Testing exchange and the findings are well worth noting.

However — and this is a big “however” — following its conclusions will certainly conflict with user preferences, and that’s a huge mistake in the online world. Why did a Microsoft study a few years ago conclude that 7-12 seconds was optimum for pre-rolls? Why is Google about to give us 3-second pre-rolls via YouTube? Why are they experimenting with variations of pre and post-rolls?

Because the user is in charge online, not the publisher.

And here’s the deal, folks. If you think your content is so hot that people will sit through a steady diet of 30-second pre-rolls, you are absolutely deluded. They have no choice in a broadcast paradigm (oops, there’s TiVo), but where they have a choice, they’ll flee from it.

Let me repeat an old theme here: mass marketing is about manipulation — doing anything in the name of getting heads in a crowd to turn. It’s an art, and it is a science. And people are sick to death of being chased by master manipulators. Hence, the world wide web and the personal media revolution.

Online video is the growth engine of advertising revenue, and marketers everywhere are trying to find static formulas that will assure their future employment. It won’t work on the internet, because micro marketing is the game here. It’s just not a mass marketing environment, and rather than trying to drag it back into the MM world, we’d all be better off developing new models that begin with the end user’s perspective.

This study offers valuable insight, but my recommendation is to proceed with extreme caution. As Starcom’s Rishad Tobbaccowala said, people are “god-like” in the age of participation, and we would be smart to remember that.

Now that the hoopla is over, some very interesting observations are popping up about the NBC/Fox “YouTube killer” announced yesterday (see below). The most provocative — and, I think, insightful — comes from Michael Arrington of TechCrunch. Michael pulls no punches in calling a spade a spade. Go read his whole take, but here’s the crux of it:

The two key messages Chernin and Zucker were selling were (1) a focus on respecting copyright, and (2) the fact that they were creating what they called “the largest advertising platform on earth.” That may be good messaging to stockholders, but it isn’t what the public cares about.

I think a better approach would have been to focus on the user experience, but this was hardly mentioned (except at one point when Zucker said “we are shocked at the willingness of the consumer to sit through the whole show with ads on NBC.com”). It’s either arrogance or it’s blindness to the reality of this Bittorrent and YouTube world. Either way, it suggests they are in over their head.

There are really big challenges ahead for this company. First, the fact that only two networks joined is a really bad sign. Viacom at least should have been willing to join. Second, this group has little experience in creating web applications, and no experience building the kind of stuff, like YouTube, that users get seriously passionate about. Third, the track record of major media companies working together to deal with this kind of viral attack on their business is not good. As Valleywag pointed out today, EMI, BMG, and Sony Music banded together in 1999 to deal with the Napster situation and created Musicnet, which was a dismal failure and was named by PC World as one of the worst tech products of all time.

I think this is absolutely spot on analysis, and the more I think about the deal, the less I think of it. The biggest problem is not that there are only two partners (and that’s huge); it’s the way they seem to have ignored the real trends in video CONSUMPTION that are central to the business disruption attacking the industry.

TiVo allows people to skip ads and why? Because time is the new currency, and those consumers that “shock” Zucker don’t have as much of it as they used to. People skip ads, because they don’t have time for ads, and it’s a foolish assumption to think this would be any different via the web.

I’m also hearing the words of business disruption guru Clayton Christensen in my ears.

(I)f you’re looking to start a new-growth business, very often, the most important customers to understand, are non-customers. Because if you figure out why it is they’re not customers, and then bring an innovation that allows them now to become customers, that’s what growth comes from.

On the upside, one of Christensen’s core recommendations is at play here, because the joint venture announced yesterday is the creation of a new business.

A company can survive a disruptive attack and remain as the leader, but evidence is overwhelming that the only way to do that is if the leader in the industry that’s being disrupted sets up a separate organization. The separate entity then needs the freedom to create a business model that is tuned to that new disruptive business and gives it a charter to kill the parent.

Does this new enterprise have that kind of authority — from the top? In the answer to that question lies the future of the project, and frankly, I’m not holding my breath.

Meanwhile, there’s another aspect to this that bears noting. Some observers are calling this “the new cable TV.” I don’t know if that’s the case, but if it is, it will be similar to satellite in that it’s delivered directly to consumers from points outside their local geography. Why is this important? Because as broadcast affiliate and local cable distribution fall (cable penetration in February was at its lowest level since 1990), the marketplace for local advertising has fewer options. All that money will dramatically move to the internet and those media companies able to do geo, behavioral or contextual targeting.

This is why I tell clients that we must begin to view ourselves as enablers of commerce, not merely purveyors of advertising. This is the real opportunity for local media companies in the years ahead. Databases and database marketing — like Obi Wan Kenobi — are our only hope.

And if you want to know more about that, call me.

New numbers from Hitwise show that both YouTube and Viacom have picked up growth in web traffic since things got messy between the two.

But this whole thing isn’t about web traffic, copyright, or monetizing this thing or that. What’s really happening here is a whole lot bigger than it appears. Google can afford to simply bide their time, because the real business disruption moves forward with or without an agreement with Viacom.

The problem for Viacom, Umair Haque writes, is that one of its key properties, MTV, has been hypercommoditized by YouTube. Music videos (legal) are a big part of YouTube, as are reality shows (legal user-generated creations). So what’s left for MTV? Had Viacom been a part of the solution instead of the problem, MTV could easily have been YouTube today. This leads Haque to conclude — correctly, I think — that for Viacom “this is really kind of a fight to the death.”

Meanwhile, a new user-generated animation site has launched. MyToons.com, and it will pose further problems for the copyright industry, not because people will upload copyrighted material, but because technology is making animation easier for a lot more people.

And the first real project in Jay Rosen’s experiment in open-source journalism — Assignment Zero — launched today. Funded by NewAssignment.net, Wired Magazine and others, it’s a serious attempt to do investigative journalism from a new direction, and it’s yet another example of the people formerly known as the audience getting involved in this thing we call media.

This is the heart of Media 2.0, and it’s why we all need to think carefully about how we approach this world. Everything is counterintuitive here, and we really need to adjust our view to see what’s really taking place.

It really isn’t about copyright at all.

In the words of the immortal Gomer Pyle, “Surprise, surprise!”

Viacom moved its Queen today in the high stakes game of chicken chess with Google/YouTube over those copyrighted videos that we’ve written about so much. Viacom filed the suit in U.S. District Court in New York and is seeking $1 billion in damages.

In a statement, Viacom lawyers said, “YouTube’s strategy has been to avoid taking proactive steps to curtail the infringement on its site. Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws.”

This had to happen, and it will be interesting to watch. In essence, the entire Hollywood entertainment hegemony is in the hands of the judicial system now, and I think that even if it wins, it loses. This will simply accelerate chaos and the ultimate creation of a new “Hollywood” spawned by the people formerly known as its customers.

You see, as J.D. Lasica noted in the subtitle of his powerful book, Darknet, Hollywood is at war with the digital generation, not YouTube or Google. It’s their customers they have the problem with, and they can’t sue every one of them (they would if they could). It’s their customers who are uploading the videos to share with their friends, and let me tell you this, the potential for backlash here is pretty significant. And what does it say about the long-term value of an industry that resorts to suing its own customers anyway?

And don’t be fooled by the dollar amount here. It’s a drop-in-the-bucket compared to what’s at stake.

Reaction is pouring in, and I’m only going to provide one link here. It’s to Umair Haque, the brilliant economic guru who never met an archaic business model he couldn’t deconstruct:

Nice one guys - it’s like putting off going to the gym…by ducking into Krispy Kreme.

Gamesmanship doesn’t buy you time or space - it’s just (a desperate) excuse to not meet the fundamental challenge of deep, sweeping strategic reinvention.

It’s the mark of a truly great firm to embrace this challenge head-on. Conversely, not having the imagination, vision, or appetite to embrace this challenge is usually the mark of a once-great firm slowly dragging itself past strategy decay and into strategic irrelevance.

I love Umair.

Alex Rowland doesn’t blog as much as he used to (or should — take that, Alex), but when he does, it’s usually a worthwhile read. This morning he writes about the vanity of sharing your life online, or is it more than that?

Many do these things for fame and self-aggrandizement, but I think the reason for most share their lives is that the simple act of sharing information for most humans is a very pleasant activity.

I think this is an evolutional trait of human beings. We are genetically programmed to enjoy the process of passing along experience and information to others. The web has just enabled this to become a much larger part of many people’s lives. It’s magnified the pleasure of sharing because you can share with so many people at the same time. It’s more subtle and less sinister than fame, but actually more powerful.

It gives me great hope for the future of our emerging civilization.

Me too, Alex. Me too.

Let’s begin with an assumption. Quarterly reports to stockholders always include “forward-looking” statements. This is business-speak for what we used to call “evangelistically-speaking” in the counting of those attending a church rally or function. If 501 people showed up, evangelistically-speaking, that would mean “almost a thousand.”

You get my drift.

So Viacom CEO Philippe Dauman told shareholders yesterday that the company’s online properties collectively registered more than 40 million unique visitors in Dec. 2006, and ranked as the number one online entertainment destination and the 10th most popular destination on the web (according to PaidContent.org). The latter assertion is based on the former, and we don’t really know that those “unique visitors” are truly unique. Dauman is referring to collective properties, and determining uniques over multiple properties can be dicey. I’m not suggesting he’s lying, but 40 million is a hell of a big number.

Dauman also used year-over-year growth figures from January to make a case that pulling clips from YouTube was a smart strategy, even though that didn’t occur until February. We’ve seen nothing in the way of evidence to suggest that people have bolted from YouTube to Viacom properties, and Dauman’s own numbers would suggest that having the clips on YouTube didn’t interfere whatsoever with their growth and may have, in fact, actually contributed to the growth! I think using those January numbers to make a case was poppycock, and Viacom investors ought to be furious.

“As far as Google and YouTube, obviously we required them to take down over 100,000 of our clips that were appearing on the site. Our content was a substantial part of the traffic on those sites. We are very pleased to have more traffic on our sites since we took down our video from YouTube because we are able to monetize that as opposed to someone else doing so,” Dauman said.

This time, Dauman is, in fact, lying. No “forward-looking statement.” Just a simple fabrication.

He goes on: “At the same time, we are interested in deals that provide an additional distribution platform for our content as long as it respects our copyright. We think we can generate incremental revenues that way. That’s why we did the deal with Joost. It’s a great opportunity for consumer experience and meets all our criteria for content, controlled advertising relationships, as well as linking back to our sites. We are looking at this very strategically, as we have in the history of many decades of this company, of looking at every window in the development of content. We love being a pure content company. That is a great place to be, no matter what distribution platform there is.”

Here Dauman looks back at company history and essentially says, “Our strategy worked for us then and it’ll work for us now.” This is a very dangerous assumption, because reveling in the history of the content business is problematic in a world where it’s just damned hard to scale content.

Meanwhile, a Financial Times story gets it ALL WRONG, using the year-over-year January numbers as January to February in a piece that pumps Viacom’s YouTube strategy as a wise move. Now, I realize the Financial Times is in league with big business, but this story is so slanted that it’s vertical.

“Video streaming traffic on our sites has increased dramatically, an important validation of our strategy,” said Philippe Dauman, president and chief executive of Viacom, owned by media mogul Sumner Redstone.

Traffic to Comedy Central’s Website was up more than 90 per cent, MTV.com had increased by more than 50 per cent and Nickelodeon had seen more than 30 per cent more traffic in the past month, Viacom said.

Honestly, folks, you’ve really got to pay attention in following this story, because such disinformation can lead to bad strategic mistakes in the Media 2.0 paradigm.

If it looks and smells like BS, it’s probably BS. And that’s NOT evangelistically-speaking.

UPDATE: Sorry, folks, but I can’t leave this alone. Motherload, the Comedy Central streaming application, launched in October of 2005. One would certainly hope that streaming traffic would’ve been up between January 2006 and January 2007. *sigh*