On our network blog last100, Natalie Fonseca is covering the NewTeeVee Live event. One of the panels today featured VCs talking about funding for the Internet TV market. Depending on who was talking - and the panel included VCs who have backed online video startups like Veoh and Heavy.com - the outlook for VC investments "varied from treacherous to less treacherous", reported Natalie. She wrote:
"Entertainment-lawyer-turned-VC Dennis Miller of Spark Capital warned that there are already investors who are becoming “roadkill” and there will be more roadkill ahead. George Zachary of Charles River Ventures generally agreed that there aren’t a lot of Google-like opportunities in video now that will pay mega-dividends to early investors. Instead, Zachary thinks the money isn’t in the content but in the social networks that are built around content.
Mike Hirshland of Polaris Venture Partners was more optimistic about the possibility for at least a few companies to reach the critical mass needed to really take off — and to pay off for VCs who’ve taken a chance on them."
Other NewTeeVee Live coverage on last100:
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I do agree that the internet tv space has gotten crowded very quickly but I also thought social networks for the most part were beginning to wear on users.
Either way...the medium which we all predicted would be the "next big thing" for 2007 does not seem to have too much of a rosy future.
Unlike many though it's the lack of quality streaming content similar to anything we have on regular tv that is the main culprit...just too many "recycled" low quality videos imo.
Posted by: Adrian Keys | November 15, 2007 4:38 AMOf course the money is not in content (at least on the VC side.) Even for VC's in a wildly speculative environment (which is about to rapidly cool off if the market keeps going the way it is) it's just too much of a crapshoot.
That's the difference between traditional TV and web-based TV content right now. While there's a ton of traditional TV networks, at the end of the day it's still a relatively finite amount of only a few hundred channels people have to choose from. The web on the other hand is so segmented and fragmented you have thousands/millions of wannabe content providers popping up everywhere. For every LonelyGirl or Ask a Ninja that hits it 'big' there's at least 10,000x as many wannabes that haven't. And even then a massive web video hit of the highest magnitude usually only has brief, broader cultural reach roughly equal to that of a mid-tier cable TV show.
I agree that the idea of finding the networks built around or supporting video content is the best avenue to take. The relationship between Digg and Revision3 is the perfect example. The Digg network has created a large, built-in user base for Revision3's video content. I'll be interested to see if/when Digg ever does sell whether or not Revision3 remains separate from that deal. Clearly video content is the core love and ultimate end goal for Kevin Rose and several others at Digg.
Posted by: RS | November 15, 2007 7:11 AM