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HipMojo 17A: Netflix and YouTube’s Exclusive Deals


welcome to hip mojo shows 17 i’m your

welcome to hip mojo shows 17 i’m your host Afghan Constitution and I’m CT more

host Afghan Constitution and I’m CT more

host Afghan Constitution and I’m CT more and this week we’re going to be talking

and this week we’re going to be talking

and this week we’re going to be talking about the power of exclusive content or

about the power of exclusive content or

about the power of exclusive content or lack thereof there you go Zuckerberg vs.

lack thereof there you go Zuckerberg vs.

lack thereof there you go Zuckerberg vs. page and brin and a whole bunch of other

page and brin and a whole bunch of other

page and brin and a whole bunch of other things in lightning round so let’s get

things in lightning round so let’s get

things in lightning round so let’s get started so I want to ask you ash do you

started so I want to ask you ash do you

started so I want to ask you ash do you think exclusive content can really make

think exclusive content can really make

think exclusive content can really make a difference for distributors such as

a difference for distributors such as

a difference for distributors such as ISPs yeah I mean if an ISP wanted to win

ISPs yeah I mean if an ISP wanted to win

ISPs yeah I mean if an ISP wanted to win over more users there’s an argument that

over more users there’s an argument that

over more users there’s an argument that could be made that if they were to get a

could be made that if they were to get a

could be made that if they were to get a bunch of rights to content and said you

bunch of rights to content and said you

bunch of rights to content and said you can only get this content if you get

can only get this content if you get

can only get this content if you get your internet through us will it make a

your internet through us will it make a

your internet through us will it make a difference maybe I don’t really think so

difference maybe I don’t really think so

difference maybe I don’t really think so we’ve done a few deals in the past where

we’ve done a few deals in the past where

we’ve done a few deals in the past where we’ve given exclusive rights for like a

we’ve given exclusive rights for like a

we’ve given exclusive rights for like a limited period to a potential

limited period to a potential

limited period to a potential distributors so not so much an ISP like

distributors so not so much an ISP like

distributors so not so much an ISP like in 2008 our friends over at myspace paid

in 2008 our friends over at myspace paid

in 2008 our friends over at myspace paid us you know a mid five digit sum so not

us you know a mid five digit sum so not

us you know a mid five digit sum so not huge but not nothing so they paid us a

huge but not nothing so they paid us a

huge but not nothing so they paid us a bunch of cash for us to give them a

bunch of cash for us to give them a

bunch of cash for us to give them a bunch of content for one month before we

bunch of content for one month before we

bunch of content for one month before we then put it on YouTube and everywhere

then put it on YouTube and everywhere

then put it on YouTube and everywhere else as much as it was nice we’re not

else as much as it was nice we’re not

else as much as it was nice we’re not you know we were like a maid for web

you know we were like a maid for web

you know we were like a maid for web production company so I think our

production company so I think our

production company so I think our content was good and they were

content was good and they were

content was good and they were experimenting with it I think word might

experimenting with it I think word might

experimenting with it I think word might might might make a difference is what

might might make a difference is what

might might make a difference is what super premium content around established

super premium content around established

super premium content around established brands established programming like if

brands established programming like if

brands established programming like if you are to get a sports event if you are

you are to get a sports event if you are

you are to get a sports event if you are to get a music show if you are to get in

to get a music show if you are to get in

to get a music show if you are to get in the case of Netflix arrested development

the case of Netflix arrested development

the case of Netflix arrested development I think it might make a difference but

I think it might make a difference but

I think it might make a difference but to me it’s more marketing I don’t really

to me it’s more marketing I don’t really

to me it’s more marketing I don’t really like in the states you can’t even

like in the states you can’t even

like in the states you can’t even necessarily just pick whatever isp you

necessarily just pick whatever isp you

necessarily just pick whatever isp you want right like if you live in a certain

want right like if you live in a certain

want right like if you live in a certain area you might not be able to get

area you might not be able to get

area you might not be able to get verizon or comcast but let’s say in a

verizon or comcast but let’s say in a

verizon or comcast but let’s say in a bizarro world you did I mean what do you

bizarro world you did I mean what do you

bizarro world you did I mean what do you think do you really think like if you

think do you really think like if you

think do you really think like if you had access to oh my god I’m gonna get

had access to oh my god I’m gonna get

had access to oh my god I’m gonna get arrested development if I sign up with

arrested development if I sign up with

arrested development if I sign up with comcast whereas verizon doesn’t have it

comcast whereas verizon doesn’t have it

comcast whereas verizon doesn’t have it does it really make a difference well I

does it really make a difference well I

does it really make a difference well I don’t think they can hear the cable out

don’t think they can hear the cable out

don’t think they can hear the cable out and I don’t I don’t think you can

and I don’t I don’t think you can

and I don’t I don’t think you can compare like something such as arrested

compare like something such as arrested

compare like something such as arrested development’s like that level of content

development’s like that level of content

development’s like that level of content to made for web content um I don’t know

to made for web content um I don’t know

to made for web content um I don’t know what the average arrested development

what the average arrested development

what the average arrested development fine how just just how fanatical they

fine how just just how fanatical they

fine how just just how fanatical they are but I can’t imagine someone actually

are but I can’t imagine someone actually

are but I can’t imagine someone actually switching is ps4 access to the content

switching is ps4 access to the content

switching is ps4 access to the content especially knowing that somewhere

especially knowing that somewhere

especially knowing that somewhere somehow some way they’ll be able to

somehow some way they’ll be able to

somehow some way they’ll be able to pirate it or download it somewhere else

pirate it or download it somewhere else

pirate it or download it somewhere else and you know I I think it’s an honor

and you know I I think it’s an honor

and you know I I think it’s an honor that will recommending that of course

that will recommending that of course

that will recommending that of course positive but and I think that’s the

positive but and I think that’s the

positive but and I think that’s the difference and I think this is weird

difference and I think this is weird

difference and I think this is weird like in the case of ISPs where they’re

like in the case of ISPs where they’re

like in the case of ISPs where they’re making a mistake they’re like well

making a mistake they’re like well

making a mistake they’re like well networks used to television networks

networks used to television networks

networks used to television networks used to compete with content therefore

used to compete with content therefore

used to compete with content therefore we can compete with content as well but

we can compete with content as well but

we can compete with content as well but you know the way NBC and ABC used to

you know the way NBC and ABC used to

you know the way NBC and ABC used to compete back in the days before the

compete back in the days before the

compete back in the days before the internet is you had to choose which one

internet is you had to choose which one

internet is you had to choose which one you are watching during a specific time

you are watching during a specific time

you are watching during a specific time on a specific day you didn’t have to

on a specific day you didn’t have to

on a specific day you didn’t have to ultimately choose between one network or

ultimately choose between one network or

ultimately choose between one network or the other for the rest of your life and

the other for the rest of your life and

the other for the rest of your life and I think it’s it’s it’s a really steep

I think it’s it’s it’s a really steep

I think it’s it’s it’s a really steep decision I can’t see a lot of you know

decision I can’t see a lot of you know

decision I can’t see a lot of you know distributors buying into it and I really

distributors buying into it and I really

distributors buying into it and I really can’t see it working well here’s the

can’t see it working well here’s the

can’t see it working well here’s the interesting thing some time ago I wrote

interesting thing some time ago I wrote

interesting thing some time ago I wrote an article saying that exclusivity was

an article saying that exclusivity was

an article saying that exclusivity was going to make a comeback and since then

going to make a comeback and since then

going to make a comeback and since then YouTube has spent 100 to 250 million

YouTube has spent 100 to 250 million

YouTube has spent 100 to 250 million dollars to get content for one year

dollars to get content for one year

dollars to get content for one year before it goes elsewhere and you’ve seen

before it goes elsewhere and you’ve seen

before it goes elsewhere and you’ve seen Netflix bring back arrested development

Netflix bring back arrested development

Netflix bring back arrested development and you’re going to see a lot more of

and you’re going to see a lot more of

and you’re going to see a lot more of this kind of exclusive content but the

this kind of exclusive content but the

this kind of exclusive content but the dynamics have changed you know I always

dynamics have changed you know I always

dynamics have changed you know I always say that content producers are like a

say that content producers are like a

say that content producers are like a woman and distributors are like a man

woman and distributors are like a man

woman and distributors are like a man you’re going to do in trouble again yes

you’re going to do in trouble again yes

you’re going to do in trouble again yes yes but hello this one I think makes a

yes but hello this one I think makes a

yes but hello this one I think makes a lot of sense why content producers want

lot of sense why content producers want

lot of sense why content producers want promises they want exclusivity you know

promises they want exclusivity you know

promises they want exclusivity you know they want like sweetheart deals they

they want like sweetheart deals they

they want like sweetheart deals they want I’m committed to you distributors

want I’m committed to you distributors

want I’m committed to you distributors are like will sleep with anyone give us

are like will sleep with anyone give us

are like will sleep with anyone give us your content we’re not going to be

your content we’re not going to be

your content we’re not going to be selective no guarantees no promises you

selective no guarantees no promises you

selective no guarantees no promises you know no minimum guarantees no promises

know no minimum guarantees no promises

know no minimum guarantees no promises we’re going to work with your

we’re going to work with your

we’re going to work with your competitors and all that so that dynamic

competitors and all that so that dynamic

competitors and all that so that dynamic is a bit funny right but what’s really

is a bit funny right but what’s really

is a bit funny right but what’s really interesting is online it’s a lot more

interesting is online it’s a lot more

interesting is online it’s a lot more ancestress than that actually not online

ancestress than that actually not online

ancestress than that actually not online in marketing in advertising and

in marketing in advertising and

in marketing in advertising and publishing why because it’s not just a

publishing why because it’s not just a

publishing why because it’s not just a two entity-relationship you also have to

two entity-relationship you also have to

two entity-relationship you also have to include the viewer obviously the belle

include the viewer obviously the belle

include the viewer obviously the belle of the ball and the advertiser who’s

of the ball and the advertiser who’s

of the ball and the advertiser who’s like the sugar daddy that makes

like the sugar daddy that makes

like the sugar daddy that makes everything go around what’s happened

everything go around what’s happened

everything go around what’s happened though is instead of getting the

though is instead of getting the

though is instead of getting the advertiser to maybe go up to a Content

advertiser to maybe go up to a Content

advertiser to maybe go up to a Content producer and say we’ll pay you under the

producer and say we’ll pay you under the

producer and say we’ll pay you under the guise of branded content I do think

guise of branded content I do think

guise of branded content I do think you’re seeing a new sugar daddy so to

you’re seeing a new sugar daddy so to

you’re seeing a new sugar daddy so to speak which is a distributor I think

speak which is a distributor I think

speak which is a distributor I think because they cause how do you really

because they cause how do you really

because they cause how do you really define distributor because in

define distributor because in

define distributor because in case you know one could argue the ice

case you know one could argue the ice

case you know one could argue the ice piece distributor or another case is

piece distributor or another case is

piece distributor or another case is someone could argue YouTube but but

someone could argue YouTube but but

someone could argue YouTube but but those are both distributors it’s

those are both distributors it’s

those are both distributors it’s basically the one that aggregates the

basically the one that aggregates the

basically the one that aggregates the content yeah and then sort of has access

content yeah and then sort of has access

content yeah and then sort of has access and gets the eyeballs it’s yeah but I

and gets the eyeballs it’s yeah but I

and gets the eyeballs it’s yeah but I you know if if YouTube for example had a

you know if if YouTube for example had a

you know if if YouTube for example had a piece of exclusive content it wouldn’t

piece of exclusive content it wouldn’t

piece of exclusive content it wouldn’t be the same as because I wouldn’t have

be the same as because I wouldn’t have

be the same as because I wouldn’t have to make a choice it’s not like I have to

to make a choice it’s not like I have to

to make a choice it’s not like I have to choose once and for all do i only have

choose once and for all do i only have

choose once and for all do i only have you too or do I only have megavideo well

you too or do I only have megavideo well

you too or do I only have megavideo well I think that’s a great point that there

I think that’s a great point that there

I think that’s a great point that there is a difference in terms of impact to

is a difference in terms of impact to

is a difference in terms of impact to you see that you raise an excellent

you see that you raise an excellent

you see that you raise an excellent point I think there’s a difference in

point I think there’s a difference in

point I think there’s a difference in terms of the impact to the to the viewer

terms of the impact to the to the viewer

terms of the impact to the to the viewer is different if the ISP gets access to

is different if the ISP gets access to

is different if the ISP gets access to that exclusive content because you might

that exclusive content because you might

that exclusive content because you might not you might not be able to watch that

not you might not be able to watch that

not you might not be able to watch that as a viewer whereas if it’s the YouTube

as a viewer whereas if it’s the YouTube

as a viewer whereas if it’s the YouTube or the myspace I gets exclusive

or the myspace I gets exclusive

or the myspace I gets exclusive everybody could see it I think the

everybody could see it I think the

everybody could see it I think the impact is either felt upon by the

impact is either felt upon by the

impact is either felt upon by the producer or the viewer right like if you

producer or the viewer right like if you

producer or the viewer right like if you make a decision to go as a producer to

make a decision to go as a producer to

make a decision to go as a producer to YouTube you’re really foregoing like

YouTube you’re really foregoing like

YouTube you’re really foregoing like you’re getting some money the viewer is

you’re getting some money the viewer is

you’re getting some money the viewer is more or less equally off right I just

more or less equally off right I just

more or less equally off right I just don’t think it makes that much of a

don’t think it makes that much of a

don’t think it makes that much of a difference but I do think it’s going to

difference but I do think it’s going to

difference but I do think it’s going to be a big selling point I see a lot of

be a big selling point I see a lot of

be a big selling point I see a lot of content producers going for this because

content producers going for this because

content producers going for this because we’ve seen that high resolution will not

we’ve seen that high resolution will not

we’ve seen that high resolution will not work hyper distribution does not work we

work hyper distribution does not work we

work hyper distribution does not work we can literally like nuke every

can literally like nuke every

can literally like nuke every distribution partner we have apart from

distribution partner we have apart from

distribution partner we have apart from two or three and you can imagine who

two or three and you can imagine who

two or three and you can imagine who those are and our business is the same

those are and our business is the same

those are and our business is the same and this was a big thing where a lot of

and this was a big thing where a lot of

and this was a big thing where a lot of other watch modules failed because they

other watch modules failed because they

other watch modules failed because they were like oh no ash you’re an idiot for

were like oh no ash you’re an idiot for

were like oh no ash you’re an idiot for charging licensing revenue you should

charging licensing revenue you should

charging licensing revenue you should just give up your content to everyone

just give up your content to everyone

just give up your content to everyone and get all this you know pennies which

and get all this you know pennies which

and get all this you know pennies which will become in two dimes and quarters

will become in two dimes and quarters

will become in two dimes and quarters and dollars I got news for you we’re

and dollars I got news for you we’re

and dollars I got news for you we’re still talking Nichols right so I think

still talking Nichols right so I think

still talking Nichols right so I think as a producer you are better off to say

as a producer you are better off to say

as a producer you are better off to say you know what screw it we’re just going

you know what screw it we’re just going

you know what screw it we’re just going to do a deal with YouTube MySpace crap

to do a deal with YouTube MySpace crap

to do a deal with YouTube MySpace crap stir get a million bucks and we’re going

stir get a million bucks and we’re going

stir get a million bucks and we’re going to work with them for a year and then we

to work with them for a year and then we

to work with them for a year and then we can put it elsewhere so as a producer

can put it elsewhere so as a producer

can put it elsewhere so as a producer it’s a no-brainer and I just think as a

it’s a no-brainer and I just think as a

it’s a no-brainer and I just think as a distributor whether you’re an ISP or an

distributor whether you’re an ISP or an

distributor whether you’re an ISP or an aggregator like YouTube it’s a selling

aggregator like YouTube it’s a selling

aggregator like YouTube it’s a selling point to an advertiser to say look you

point to an advertiser to say look you

point to an advertiser to say look you can only get this content with us and

can only get this content with us and

can only get this content with us and the viewer doesn’t care i think the

the viewer doesn’t care i think the

the viewer doesn’t care i think the viewer just wants you know entertainment

viewer just wants you know entertainment

viewer just wants you know entertainment and escapism i really get that you know

and escapism i really get that you know

and escapism i really get that you know without the isp there’s really no point

without the isp there’s really no point

without the isp there’s really no point of access to any kind of distributor i’m

of access to any kind of distributor i’m

of access to any kind of distributor i’m still kind of lowes to look at an ISP as

still kind of lowes to look at an ISP as

still kind of lowes to look at an ISP as a distributor I just look at them as a

a distributor I just look at them as a

a distributor I just look at them as a service provider I’m more in line with

service provider I’m more in line with

service provider I’m more in line with calling Lulu

calling Lulu

calling Lulu youtube distributor because that makes

youtube distributor because that makes

youtube distributor because that makes sense but ISPs I know they they they

sense but ISPs I know they they they

sense but ISPs I know they they they offer access and they make distribution

offer access and they make distribution

offer access and they make distribution possible but I refuse to see them as

possible but I refuse to see them as

possible but I refuse to see them as district distributors so yeah I agree

district distributors so yeah I agree

district distributors so yeah I agree with you that we’re probably going to

with you that we’re probably going to

with you that we’re probably going to see more content producers looking for

see more content producers looking for

see more content producers looking for more exclusivity it makes more sense for

more exclusivity it makes more sense for

more exclusivity it makes more sense for their bottom line it helps them

their bottom line it helps them

their bottom line it helps them rationalize what they’re investing in

rationalize what they’re investing in

rationalize what they’re investing in producing this content I I couldn’t see

producing this content I I couldn’t see

producing this content I I couldn’t see anything at the ISP level anyway really

anything at the ISP level anyway really

anything at the ISP level anyway really making a difference in their market by

making a difference in their market by

making a difference in their market by going after exclusive content and I

going after exclusive content and I

going after exclusive content and I could actually see it killing off

could actually see it killing off

could actually see it killing off content producers if they tied

content producers if they tied

content producers if they tied themselves into something that’s that

themselves into something that’s that

themselves into something that’s that high up the chain so Eric Schmidt good

high up the chain so Eric Schmidt good

high up the chain so Eric Schmidt good segue to segment two Eric Schmidt former

segue to segment two Eric Schmidt former

segue to segment two Eric Schmidt former CEO Google always said advertising is

CEO Google always said advertising is

CEO Google always said advertising is the last bastion of unaccountability in

the last bastion of unaccountability in

the last bastion of unaccountability in corporate America and this explains it

corporate America and this explains it

corporate America and this explains it because I think this kind of exclusivity

because I think this kind of exclusivity

because I think this kind of exclusivity won’t really make a big difference with

won’t really make a big difference with

won’t really make a big difference with viewers the people who ultimately

viewers the people who ultimately

viewers the people who ultimately whether you know drive how much

whether you know drive how much

whether you know drive how much advertising should be spent around

advertising should be spent around

advertising should be spent around something but you’re going to see more

something but you’re going to see more

something but you’re going to see more and more of this and the reason for that

and more of this and the reason for that

and more of this and the reason for that is because content producers are sort of

is because content producers are sort of

is because content producers are sort of you know jaded they gave it up way too

you know jaded they gave it up way too

you know jaded they gave it up way too easy too much too quickly to the

easy too much too quickly to the

easy too much too quickly to the distributor’s early on and they’re

distributor’s early on and they’re

distributor’s early on and they’re paying the price for it but I think that

paying the price for it but I think that

paying the price for it but I think that as a selling point to advertisers those

as a selling point to advertisers those

as a selling point to advertisers those who control the ad relationships are

who control the ad relationships are

who control the ad relationships are usually the aggregators that the big

usually the aggregators that the big

usually the aggregators that the big distribution companies whether it’s an

distribution companies whether it’s an

distribution companies whether it’s an ad network or a YouTube so they’re going

ad network or a YouTube so they’re going

ad network or a YouTube so they’re going to be doing this quite a bit for them

to be doing this quite a bit for them

to be doing this quite a bit for them it’s a no-brainer to sign a check get

it’s a no-brainer to sign a check get

it’s a no-brainer to sign a check get content procure it for sure and then

content procure it for sure and then

content procure it for sure and then worry about monetizing later it’s a

worry about monetizing later it’s a

worry about monetizing later it’s a marketing expense I think what I also

marketing expense I think what I also

marketing expense I think what I also argued with Netflix going after as the

argued with Netflix going after as the

argued with Netflix going after as the development I don’t necessarily I mean

development I don’t necessarily I mean

development I don’t necessarily I mean they’ll probably make money or if

they’ll probably make money or if

they’ll probably make money or if they’ll break even you saw dbg doing

they’ll break even you saw dbg doing

they’ll break even you saw dbg doing those to dbg did a deal where they did

those to dbg did a deal where they did

those to dbg did a deal where they did something with that Kiefer Sutherland

something with that Kiefer Sutherland

something with that Kiefer Sutherland the the confession I think and they only

the the confession I think and they only

the the confession I think and they only did it with Hulu I don’t know the

did it with Hulu I don’t know the

did it with Hulu I don’t know the financials of whether they made money or

financials of whether they made money or

financials of whether they made money or not but it was a great marketing expense

not but it was a great marketing expense

not but it was a great marketing expense it was like look look what we’re doing

it was like look look what we’re doing

it was like look look what we’re doing we’re bringing you know super premium

we’re bringing you know super premium

we’re bringing you know super premium content to the web so it’s one of those

content to the web so it’s one of those

content to the web so it’s one of those things that doesn’t really make sense

things that doesn’t really make sense

things that doesn’t really make sense but you’re going to see a lot more of it

but you’re going to see a lot more of it

but you’re going to see a lot more of it and why is that a good segue to segment

and why is that a good segue to segment

and why is that a good segue to segment two because when we come back we’re

two because when we come back we’re

two because when we come back we’re going to talk about who is more

going to talk about who is more

going to talk about who is more indispensable the Facebook founder Mark

indispensable the Facebook founder Mark

indispensable the Facebook founder Mark Zuckerberg or Google’s co-founder Sergey

Zuckerberg or Google’s co-founder Sergey

Zuckerberg or Google’s co-founder Sergey Brin and Larry Page

”

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