The profits are falling! The profits are falling!

… and its all YouTubes fault! OK, not just YouTube, but all the video sites that are emerging. In case you didn’t know, before this it was the Edison recording machines fault, and then it was radios fault, then it was the LP, the cassette, VCR, the CD, the DVD, and of course everything is the internets fault from loneliness to sex crimes to poor investment choices (hey, that guy from Nigeria was offering me a pretty sweet deal).

People are talking about sites like YouTube as a sign of the coming death nell of “mainstream” television’s business model. Since YouTube has turned profit 0 to date, and both rely on ad revenue as the business model, I wouldn’t set up the coffin and candles of television just yet.

Is it possible? Will, over time, NBC, ABC, CBS and FOX pass away? Of course, but will it be in 25 or 125 years? It’s easy to forget that the FOX network is only 20 years old. That’s only two decades to become a major network. So could a YouTube network join the other broadcast and cable outlets? Sure, why not…

Ah, but can sites like YouTube as we interact with them today, and that is an important caveat, as we interact them today replace television? Not likely. Here is the math. HDTV’s sales are accelerating like DVD and CD players, 16 million this year, 23 million next year, prices drop sales go up. Pretty soon we are all watching the people on Survivor in chewing on rats in all their fuzzy glory, every little twitch of a tail in perfect detail. But, have you looked at the video on YouTube? If you try to watch a video off that site on HD, it will look more like a 1979 version of Pong.

It is of course about the experience…
Over time, most people will have wicked fast connections and streaming HD video will be a reality. But in the mean time, and I speak as an HDTV owner, the 6 channels of HD I get look great. Non-HD channels are a mediocre picture at best. Then why, oh why would I watch amateur video on my HDTV? Like peer to peer file sharing networks, sites like YouTube have a quality to crap ratio that is pretty big. As I like to use webTV has a favored whipping post, watching TV and surfing the internet are a different an experience as watching a movie and going to an amusement park. Both are great fun, but different kinds of fun. You watch a TV program for a story, a thread that brings you back time and again. Even with DVR, people are still mentally attached to watching programs when they air.

Blog Disclaimer. I will often go back to entries to make edits or clarify points. If I am changing my point of view, that will be a new entry.