The Real iPod Killer
Mark Cuban's kind of an interesting jerk. Let's give him his props: the man can do real world arithmetic. And he did some to test the viability of a business model that Microsoft and/or Google could use to make the the iTunes business model as dead as disco:
There has been speculation that Google is offering 100mm dollar or more licensing opportunities to TV Networks. Thats 100mm in cash for SEGMENTS of shows. Not full shows. Not full movies. Clips. There has also been speculation that GOogle offered stock in exchange for licenses at the time of the Youtube transaction. If true, and I believe they are, these actions in the user generated video space defines that I think will come to be their approach to capturing content markets. Pay a lot of money in a landgrab for the best properties you can find and aggregate them in a manner that can pre-empt or displace the existing competition, and then give the content you just paid a boatload to license away for free, hoping to make your money back along with a return by selling advertising around it.
For the historians of the PC industry, its not a far cry to the maneuver that put MicroSoft Office in the drives seat many years ago. When Office apps were also rans, the traditional spreadsheet, word processor, database and graphics program cost about $495 EACH. MicroSoft decided to offer their MicroSoft Office Suite as an upgrade to any competitive product for only $99. The promotion brought major market share and a foundation for software upgrade revenue that would be in place for a decade. MicroSoft tried to own your desktop, Google tries to own the advertising on your browser. Not apples to apples, but pretty damn close. Get big, subsidize and monetize.
The competing player already exists, of course. HotHardware is giving two away! But our friends at Google might be showing everybody the way:
Give it away give it away give it away now Says Mark Cuban.
Oh, and sell an ad next to it.
