Monetising..

There are few words I hate more than “monetising” (that’s “monetizing” in the US).

Because we need money to buy food, keep a roof over our heads, pay for broadband, upgrade our computers and buy shoes (yes, those are in order of importance), we find ourselves considering ideas on a basis of “how we can make money”. Not all the time of course but there’s lots of cool things out there that haven’t been done because of the costs – the set-up is too high, the bandwidth costs are high, the lawsuits would be costly (that last one was a joke, awwright?).

YouTube is a perfect example. They’ve brought in bazillions of dollars of investment revenue and yet the burning question that invades my mind when I think of YouTube is really “how is this going to pay for itself”. I spent a couple of hours on YouTube the other day watching a few dozen videos. Everything from a home-made Jackass (dude, that’s SO gonna hurt in the morning when he wakes up), hot girls at a party (honest, I thought it was something else), the first youtube from some english grandad guy, the painful diaries of a really cute but preppy redhead to the internet re-run of the Big Brother final interview with a crazy guy (face it, he’d be crazy even if he didn’t have Tourette’s). Some of it snoozeworthy….some not so.

The burning question being – how does this make money. Are they going to cut these micro-episodes with advertising? At some point they are going to have to make some money. Bandwidth costs alone are adding up to a million dollars a month and they’ve been raising a lot of VC cash to support their business. It just seems so Web 1.0 to me. It’s gonna crash hard and everyone’s gonna get annoyed. (the solution obviously for the bandwidth costs would be to tie it into a P2P/BitTorrent sort of solution where you reduce your storage and bandwidth costs….but I digress).

The point being that as cool as YouTube is, there’s currently no raison d’etre other than “It’s really cool”. Those VCs are going to want their cash back….which means they’ll likely sell the business to one of the big media content names. (to be honest, I’d rather the BBC bought YouTube than wasted all that money on Radio 1, but I digress). YouTube needs to be monetised because the costs of running it are so high.

The reason this is a burning issue for me is that we’re considering what we’re going to do with SyncBridge Server. We had always envisaged that we would not be doing 90% of the hosting work for SyncBridge – it ws always meant to be out there for you guys to host your own. Our own SB server was simpy for the guys who didn’t want that hassle or who didn’t want to mess with the difficulty of having a SB server behind NAT for road warriors. Releasing it as open source is attractive for all the best karmic reasons but it still represents a lot of work. So what are the options – release it for free and try and make money through technical and code support? Frasier Speirs said yesterday “Oh, how I hate Open Source software monetized through support! Where’s the business case for making the install easy?” and that’s a very fair point. (nevermind the fact that RT files just look like binary code to me because I don’t read Perl). Add in a licensing cost on a per server basis? How much would this need to be? Gah! I think I’ll put that in the TOO HARD basket until tomorrow.

I’m not really worried about YouTube though it may seem I’m stricken with hysteria about their business plans. Someone will buy it. Built to flip and all that.

This monetising thing. Well, think of the number of good ideas which are just not being done or quickly die because people can’t figure out how to make them pay for themselves. This goes for the huge number of abandoned projects on Sourceforge as well as, frankly, the amount of old games out there which have no longer make money for anyone (and this part of the rant came from poppig into a local toy store for a present for kids and spotting some of those Atari-style joysticks that have 80-odd Atari 2600 games built in. And I searched and searched and none of them had EITHER Space Invaders (I mean – Duh!) or a tank game called “COMBAT”. These games were pivotal in my development as a geek. Damn.

Anyway – every discussion I’ve had recently with VCs comes down to monetising. They’re interested in this and interested in that and talk to me about how they can monetise it this way and that way. Mleh. I’m in two minds about VC money. One one hand I feel the need to be responsible and, you know, keep the burn rate low so we’d not end up burning out in 6 months with really expensive office chairs. On the other hand I’m sick of cheap Ramen and driving a knackered 3 door. 🙂 How do people manage the dichotomy there. I dunno. Answers on a postcard!