Can film survive the new generation? The Wall Street Journal's Joe Morgenstern isn't sure. He's worried about the future of movies. In "YouTube Youth", he suggests that kids of today are so bored by traditional narrative movies that Hollywood might go the way of Amtrak and the Dodo bird:
Kids are ditching traditional forms of entertainment -- especially theatrical films -- in favor of digital media, and they've got Hollywood scared stiff.
But Joe might be asking the right question about the wrong subject. The really interesting question is not whether film can survive the next generation, but whether YouTube can survive next week?
Question: What's the best way for a traditional media company to strengthen its presence on the Internet?
Answer: Threaten to sue YouTube.
That's the important lesson Viacom has learnt from its dealings with Google's $1.6 billion acquisition. Having forced YouTube to remove all its illegally posted video clips, Viacom's traffic is dramatically up over the past month. Up 90% on Comedy Central, up 50% on MTV, up 30% on Nickelodeon. Viacom's revenue is up too -- profits quadrupling in the fourth quarter of 2006 to $480 million with Philippe Dauman, the company's new chief executive, promising the Financial Times $500 million from digital sales in 2007. Viacom has learnt to ditch the illegalities of YouTube and love the legal Internet.
The morale of this tale? Tough copyright infringment threats work. Other large media companies like Sony, Universal Music and Warner Music would also be advised to go after YouTube in the same aggressive manner as Viacom. It's only be actively policing the Internet that content owners can transform the anarchy of the Web 2.0 Internet into a realm where content owners and consumers can both profit from lawfully posted content. Even Microsoft understands this. See, for example, Tom Rubin's (Microsoft's Associate General Council) attack on Google in tomorrow's Financial Times in which he describes its copyright strategy as "cavalier" and exposes the way it is "exploiting books, music, films and television without permission."
So what happens if the major content companies succeed in forcing YouTube to take down all its pirated content? Then all that will exist on the site is the infinite drivel of user-generated content -- with a collective economic value of around zero. YouTube's smoke and mirrors value proposition will drift away and it will emerge as the symbolic Napster of Web 2.0 -- a "business" destroyed by the fraudulence of its users.
My prediction is that film will survive the new generation. Biology assures us that there will always be young people too. But don't bet on YouTube being around to entertain them.