Mark Cuban: Low-Budget Doom and SEO Gloom for Web Video

When all that’s worth watching on a network is one show, or all that’s worth watching in a show is one scene, or all that’s worth watching in a scene is one line, just take us straight to the good stuff, right? But Mark Cuban, in an apocalyptic blog post, says online video will be destroyed by its ability to cater to these a la carte watching habits, because the economics don’t support them. He seems to thinks this will lead to the eradication of quality content.

Inspired by a Bernstein Research report that’s not publicly available, the cranky Cuban (who’s often blogged about his dissatisfaction with web video) quotes Bernstein analyst Craig Moffett,

Five years into the video-over-the-Internet revolution, we have learned two things. First; consumers won’t pay for content on the web, so it will have to be ad supported. And second; it won’t be ad supported.

Moffett’s math: Even if web video got the same CPMs as TV, because online viewers will tolerate less advertising, “a 30-minute program on the web with two minutes of advertising yields approximately 1/8th as much revenue per viewer.”

Though a la carte is what consumers want and deserve (why watch the crap if you don’t have to?), Moffett and Cuban are worried about the implications of legacy models dying out. Quoting Moffett again,

“On the web, watching SportsCenter not only robs ESPN of its ability to pull through carriage fees for ESPN Classic and ESPN U (and SoapNet and Toon Disney), it also, and much more importantly, robs ESPN of its ability to use SportsCenter to support the economics of the rest of the 24-hour ESPN schedule.”

Sure, the legacy model promises a diamond will emerge from the rough once in a while, but c’mon, all change is not necessarily bad. Cuban (who clearly has a vested interest in traditional television channels and high-quality content, seeing as he owns HDNet) turns this in an interesting direction, saying web video will be forced to play into the search engine optimization game that rules web content these days.

The economics of supporting content will force independently produced Internet content to be dumbed down to levels that create a perfect match for Youtube. There will be SEOs that come up with arbitrage solutions that will drive traffic to parked videos. Content creators will partner with SEOs and create budgets that reflect the CPMs they can earn in and around the video hosted on YouTube against the costs of the SEO driving traffic to the video. SEO support will be the only even marginally effective way to create baseline traffic to a video/show.

There’s something in his logic; we hear every day from content creators complaining that promotion is the only way for them to get noticed. But then again, you don’t hear winners whining. A web series like Zero Punctuation — “video game reviews [by an] obscure, foul-mouthed Brit,” as James described them in our review — shot out of the gate to millions of views per episode with minimal promotion. Yes, it does cater to web nerds, but most importantly it’s good.

Also, as a separate counterpoint, SEO may rule web content these days, but there’s still a lot of really good stuff on the web.

What do you think? Are lowered online video budgets a recipe for disaster?