YouTube bleeding cash – What’s Google to do?

(Originally written and posted at www.wikinomics.com)

Earlier this month, a report from Credit Suisse analysts speculated that Youtube is on track to lose $470 million in 2009. Wealthy as they may be, this has to represent big problems for Google, who paid $1.65 billion for YouTube back in 2006. Unlike many companies reporting recent losses, YouTube’s main problem isn’t poor market conditions, but rather, the high cost of maintaing bandwidth. Playing host to the world’s home videos is expensive, and their long tail means that the vast majority of videos lack potential to generate ad revenue.

YouTube has also run into trouble over expiring licensing agreements, with music companies seeking better terms for their contracts (essentially, more money from YouTube). As one example, Warner Music removed its Youtube videos back in December amidst an impasse in negotiations. Music videos and other mainstream tv/film clips, Youtube’s premium content, represent the one area where YouTube could generate more revenue (operating more like Hulu), but maintaining favourable licensing agreements is difficult.

Recently, Google’s top brass have been trying to point out optimistic trends. In an interview with MacLean’s on Tuesday, Google CFO Patrick Pichette maintained that advertising models will support YouTube in the future. He might have a case – YouTube announced earlier this month that they had reached an agreement with Universal Music to create Vevo, a seperate video site. YouTube is also working on the launch of a specialized portal to accomodate tv and film content, hoping to compete with Hulu and generate more ad revenue. Google CEO Eric Schmidt recently stated that YouTube has been making “good progress” in negotiating with small- and medium-sized studios for this purpose.

But even if YouTube can profit off of their premium content, will they be able to earn enough revenue to offset the massive cost of hosting the world’s home video library (for free)? Continue reading

Creative application contests: Engaging developers in the public sphere

(Originally written and posted at www.wikinomics.com)

Last November, Vivek Kundra, current CIO of the USA and former CTO of DC, launched Apps for Democracy, a contest designed to crowdsource the best public sector data-mashup applications from private developers. The top submissions from the contest, such as ilive.at and DC Historic Tours, demonstrated the power of citizen-driven idea sourcing and application-building. Since the success of Apps for Democracy, two new contests have taken place.

At noon yesterday, the Sunlight Foundation announced the winners from the Apps for America contest. The top prize (which came with a $15 000 reward) went to the makers of Filibusted.us, a web-based application that sheds light on which Senators have been filibustering legislation in the US Senate. There were 16 prize winners in total, and I definately recommend checking out the winners for yourself (my favorite is Legistalker.org).

Next came the recently-launched INCA – the Innovative and Creative Application Contest, based out of Belgium. This contest is open for anyone to submit an application, be it a website, widget, google mashup or mobile application, to be used by Flemish citizens to help solve “collective and social problems.” Prizes will be awarded to the ten best submissions, with the top developer receiving a prize of 20 000 Euros (about $25 ooo USD). Deadline for submission is April 27th.

With INCA, Apps for America and last November’s Apps for Democracy, we’re starting to see a very exciting trend in the Gov 2.0 space: software developers and programmers engaging in social causes and public sector development. Can these contests help spur the creation of new services along the lines of fixmystreet or transparency tools like opencongress? After speaking with Sunlight’s John Wonderlich and Apps for Democracy architect Peter Corbett over the past two weeks, I’m convinced that they can.

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How much cybersecurity is needed to prevent a cyber-Katrina?

(Originally written and posted at www.wikinomics.com)

I came across a great article over the weekend discussing the proposed Cybersecurity Act of 2009, currently in working draft status in Congress (as a sidenote, I was directed to it via the GovLoop daily “Sweet Tweets” blog, an excellent source of Gov 2.0 news for anyone interested in this space). You may have read about this bill last week; the preamble states that it’s designed to protect online commerce, both for the US and its partners, by developing a “cadre of [IT] specialists to improve and maintain effective cybersecurity defenses,” a proposal that I imagine most citizens would support.

The issue of cybersecurity is nothing new; you can read Obama and Biden’s homeland security agenda, and specifically their objectives for “protecting our information networks” right here. On a more interesting note, the issue of a Katrina-like disaster in cyberspace has been a topic of major interest over the past few months. In February, former Whitehouse cybersecurity official Paul Kurts addressed the lack of a ‘FEMA for the internet’. More recently, the online discourse surrounding cybersecurity has ramped up substantially, particularly following the anxiety over last week’s Conficker Worm. This only stengthened the push for an American cyberecurity czar, which according to US Senator Olympia Snowe (R-Maine), is an absolute necessity. In a statement released last week, Snowe (co-author of the new bill) argued that “if we fail to take swift action, we, regrettably, risk a cyber Katrina.”

The bill’s most striking proposal (Section 18, paragraph 2), and the central issue of the article I cited above, is that the new legislation would give the President emergency authority to halt web traffic, effectively shutting down the internet. Not surprisingly, this created something of an uproar among political bloggers over the weekend, many of whom took issue with this expansion of federal powers.

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Is spec work evil?

(Originally written and posted at www.wikinomics.com)

Not my words – this is coming from a panel discussion (posted below) at March’s SXSW Conference in Austin, Texas. The debate was surrounding the issues relating to speculative (spec) work, which we’ve written about previously (here’s a blog that Denis wrote last year on crowdSPRING.com). For those unfamiliar, sites like crowdSPRING allow individuals (or companies) to post a project to be created, list a price to be paid to the winner, and then choose the winning project from a series of submissions.

Denis used crowdSPRING to design the logo for his chTONGUEeek website, and discussed his experience with them in this blog. For his purposes, crowdSPRING was great – he received 69 logo submissions, the opportunity to collaborate with the designer whose proposal he liked the best, and of course, got the logo he needed. All for $150.

So, this brings us to the issue up for debate among the SXSW panelists (in the video below). Does spec work (in creative) devalue an industry of designers?

From the perspective of workers within the industry, it’s not surprising that established designers and creative firms would be opposed to spec work; one panelist discussed a possible industry blacklisting of workers who engage on sites like crowdSPRING. For more on this perspective, see the NO!SPEC website, where you can read their “Ten Reasons” against spec work, or the article Why Speculation Hurts.

On the flip side, there’s a good argument to be made that sites like crowdspring tear down barriers and facilitate entry into the profession for the young workers looking to build a resume. As an aspiring young designer, it can be hard to build a professional resume and get your first job (this applies to most professions). To these workers, there could be a lot of value in gaining experience through crowdspring (and other spec sites).

The panel at SXSW did a great job covering the issues of spec work in design and creative. But what if we apply this spec work model to other industries?

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