So, early yesterday, I wondered how the Myspace/ Photobucket Fracas was going to turn out: details had yet to emerge, but the ball was in Rupert’s corner — was he going to relent on blocking Photobucket? Fox *claimed* that Photobucket was serving ads through their shared online videos … but what were the REAL reasons for the blockage anyway? Other questions are emerging, like is Photobucket done for, or will they be able to survive? And is MySpace ever going to relent?
Well, it looks like Om Malik has the goods.
To summarize, it looks like Photobucket isn’t directly selling ad space through videos that are shared, either pre-roll, post-roll, or inside the video. Rather, what they are doing is participating in a general marketing strategy that involves Photobucket users being able to create videos that mashup parts of the upcoming movie, Spiderman 3.
Photobucket isn’t *directly* making a dime off of these mashups, because while they might be tracking the mashups, the mashups don’t have any ad inventory in them.
It seems like what Fox *is* concerned about, is whether Photobucket is making *any* money off of these deals; and in doing so, it seems like they put definite value and worth in another widget company being able to make similar branding deals with other companies.
If you take it at face value, this is Fox saying that in a world of online advertising governed by direct marketing principles and an obsession with ROI, there is still worth and value in branding as a marketing strategy.
On the other hand, the conspiracy theorist would say they’re looking for *any* reason to shut down a site which had previously bragged that it was looking to be sold at a valuation of over $300, while admitting that they’ve never had a good relationship with their host, MySpace.
It remains to be seen whether all of this back and forth bragaddocio amounts to simply saber rattling, or something more. But as the hours and days go by, it seems less and less like that Fox is going to relent on its Photobucket embargo.
If its really about whether Photobucket is making *any* kind of revenue through participating in Sony’s branding strategy for an upcoming film, then Om Malik is right on the money here: its time to pay up, or shut up. Google paid in the realm of 9 figures (900 million) to pay in MySpace’s playground, and as I said previously, those walls are getting higher and steeper.
While I’m sure Mr. Murdoch has a mean streak, this not about what’s right and wrong – its about business. And despite what some educated observers believe, Mr. Murdoch has Photobucket by the proverbial balls. Sure, Photobucket’s gotten enough publicity over the past 48h to deliver as much traffic as it has gotten within the past year, but by Photobucket’s own CEO’s words, almost 40% of its registered users also use MySpace. If 40% of its usage comes from MySpace, in the long run (and I use that loosely — like in two weeks when the hype has died down), Photobucket had better capitalize on the fact that it now has the machinery to *be* like a stand alone concern.
Besides, its one thing to get transient tech hype, and its another thing to actually capitalize on that. Just ask Bambi Francisco and Vator.tv
Because if we presume that Photobucket *won’t* change its strategy, issue a mea culpa, and/or cough up cash to calm down the Fox, it will need to change its own marketing strategy to not *just* survive, but thrive. And now that its pony (named “one-trick”) has just left town, it’ll be interesting to see what that will be. After all, if they’re looking for investors, they won’t be looking for a company that’s just treading water, but a company that’s got potential to continue to grow exponentially.
April 12th, 2007 at 10:56 am | Permalink
Tony, you know I love you, but I disagree with you here. While MySpace has the right to pull the plug on Photobucket videos, I really think it’s short-sighted. Just because MySpace has a zillion members now, that doesn’t mean they will six months or three months or even a month from now. It’s all too easy to bail out and choose any of the many hundreds of social networking start-ups out there, most of whom will be more than happy to accept the disaffected masses with open arms… and very few restrictions. I talk about this more here.
April 12th, 2007 at 11:38 am | Permalink
Eric,
We’ve all been calling for MySpace, or even YouTube’s demise for months based on the theory that teens are fickle creatures just waiting for the next big hit (or, if not teens, the combination of demographics currently using MySpace).
Check out Scott Karp’s similar observations:
http://publishing2.com/2007/04/12/do-myspace-users-care-that-its-not-really-their-space/
At any rate, I think we may have underestimated the network effects behind locking its current users. While it may make sense for someone to pull up and migrate to somewhere else, the problem is convince all of your friends to do so as well.
The flipside to your argument is that I would argue that its just as easy for MySpacer’s to find other hosts who might be all too willing to play by Murdoch’s game to get a sliver of that huge pie.
Time will tell, but I suspect that it’ll be MySpacers who won’t be moving and Photobucket in turn will be hurting.
cheers
t @ DJI
April 12th, 2007 at 4:20 pm | Permalink
[...] would argue that it should. Either you’re a social network or you’re not. Tony Hung has more. myspace, photobucket, video | Share This | Related [...]
April 13th, 2007 at 1:36 pm | Permalink
I think that the time invested in editing and uploading videos will out weigh the time spent setting up a new profile elsewhere….its really just a big game of chicken.
I would also guess that most myspacers only watch like maybe 12-15 peoples “spaces” religiously so moving to another network is not really all that costly.
April 16th, 2007 at 3:12 am | Permalink
Tony - I agree that people may just opt to use a different service, but it’s a slippery slope, and I think at some point, people will get pissed off about restrictions — there are probably *some* people for instance who have a ton of videos with photobucket and are inconvenienced enough to switch social networks.
My counter-argument on the “all your friends are theory” is that this dynamic is changing in part. While “everyone is on myspace which is why everyone is on myspace” is still true, people who are on myspace (i.e. into spcial networking) are more likely than ever before to also be on one or more other social networks. Check out the explosive growth of Facebook for instance! And then there are a zillion niche plays.
Therefore, I think it’s really possible that if myspace continues to do things that decreases value for its users, those users will simply shift attention to those other social networks that they’ve already signed up for.
April 16th, 2007 at 10:22 am | Permalink
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April 24th, 2007 at 1:01 am | Permalink
[...] way for Rupert to flex his MySpace muscle, and I was one of a few bloggers wondering whether this wasn’t just an elaborate sabre rattling manoever to get Photobucket to start paying its way into MySpace’s walled [...]
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