Google’s YouTube Negotiation Strategy Is Ruining the Audience Experience

Google has been acting as if it controls an inelastic product–that is, that YouTube has no substitutes and therefore the content companies will be forced to negotiate deals with favorable terms for Google.

For the past several months, Google’s assumptions have been true. There hasn’t been a service that could match YouTube’s reach and the fervor of its community.

But YouTube is rapidly becoming an elastic product facing significant competition, and the networks know it. Viacom’s distribution agreement with Joost was probably the first indicator in a move away from YouTube (not to mention that MySpace is filtering content now). After all, if you can distribute your content on the net with no bandwidth costs, DRM and targeted advertising, plus not have to worry about that content being controlled by users, why wouldn’t you? It’s a win-win deal for the networks.

But it’s not a win-win deal for the video-sharing audience. By pursuing its current negotiation strategy–distro agreement first, then filtering–Google is contributing to the bifurcation of video content. YouTube will become a giant flea market of amateur videos, but the professional content will start trickling away to Joost and Veoh, and maybe AOL, Yahoo or even vid-sharing sites the networks create themselves. The longer Google stands firm, the better the chance that professional content will pop up somewhere else.

The tragedy is, consumers want professional content on both Joost (long form, high quality) and YouTube (short form, embeddable). But Google is almost guaranteeing that won’t happen.

Another problem: Joost isn’t social video in the way we’ve come to enjoy. Sure, you can chat with other people who are watching the same program, and that’s really cool. And you can build your profile around what shows you watch, etc. But you won’t be able to embed videos or create mashups from the content. So while yeah, Joost is great for TV, it ain’t great for culture.

So thanks, Google. You’ve brought television to the Internet in the worst way possible.