Gift Economy or Honeymoon?

Peter Brantley pointed to an interesting discussion on if:book entitled Gift Economy or Honeymoon? about the economic difference between a search engine like Google (or Google News) and a community content site like YouTube:

It seems to me that there’s a difference between a search service like Google News, which shows only excerpts and links back to original pages, and a social media site like YouTube, where user-created media is the content. There’s a general agreement in online culture about the validity of search engines: they index the Web for us and make it usable, and if they want to finance the operation through peripheral advertising then more power to them. The economics of social media sites, on the other hand, are still being worked out.

That’s a key insight. I wish more people in publishing understood it. In my debates with publishers over Google Book Search, I see them conflating building a search index with providing actual access to the content. Muddying the water in the public’s mind doesn’t serve anyone very well. We need to make these distinctions, because only then will we be able to develop the appropriate economic models for each type of service.

Here, if:book goes off the rails:

For now, the average YouTube-er is happy to generate the site’s content pro bono. But this could just be the honeymoon period. As big media companies begin securing revenue-sharing deals with YouTube and its competitors (see the recent YouTube-Viacom negotiations and the entrance of Joost onto the web video scene), independent producers may begin to ask why they’re getting the short end of the stick. An interesting thing to watch out for in the months and years ahead is whether (and if so, how) smaller producers start organizing into bargaining collectives. Imagine a labor union of top YouTube broadcasters threatening a freeze on new content unless moneys get redistributed. A similar thing could happen on community-filtered news sites like Digg, Reddit and Netscape in which unpaid users serve as editors and tastemakers for millions of readers. Already a few of the more talented linkers are getting signed up for paying gigs.

There’s no question that we are in a honeymoon period, that free will be replaced or supplemented by paid, and that YouTube will lead to a new generation of paid content producers, but I don’t think it will come through collective bargaining to get the long tail a slice of the big dog. That’s always the wet dream of people who missed the boat: they hope through coercion to get what they missed out on through lack of innovation. I don’t see the small content providers thinking like this — it’s just people from existing content industries who think this way. I think the small content providers will just figure out the new economics of the medium, whatever they are.

Right now, even Google hasn’t figured out how to monetize YouTube. When they do, I’ll lay odds that they will provide self-service mechanisms that content producers can use to monetize their content, with some kind of revenue-sharing arrangement, just like Adsense for Content. And from there, I’ll lay odds that it will be the content providers themselves who lead the charge, just as they have done in blogging. Entrepreneurial content producers will find ways to extend whatever mechanisms are provided, and will invent new ones. And they’ll do it in-band using the service mechanisms provided by YouTube, and out-of-band by becoming celebrities monetized in other media. And there will be a rich ecology of players who grow up to help with that monetization (just like FM Publishing (in which I am, incidentally, an investor) in blogging). FM shows the right kind of collective action: build shared infrastructure for business services that exploit the opportunities that the new economy provides.