Memo to studios: Don’t make the same mistake with YouTube that pro sports did with ESPN

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Ask veteran sports executives to name one of their bigger regrets and they will undoubtedly say not building their own ESPN.

Of course, it’s easy in hindsight to say the leagues should have created their own cable network or networks back in the early 1980s when ESPN was beginning its rise. But it’s also true. Instead, they let ESPN become a multibillion-dollar empire by essentially being a middleman. Yes, the leagues have their own networks now, but they are an afterthought to ESPN both in terms of viewers and revenue.

I’m bringing this up because Hollywood is on the verge of making the same mistake the sports leagues did 30 years ago. Rather than build their own online platforms, they’re looking to cut deals with middlemen such as Google’s YouTube. (For more on YouTube’s push to become YouPayTube see today’s Los Angeles Times.)

In the short term it makes sense. YouTube needs content and has an audience. Hollywood has content and needs new revenue streams. YouTube had 104.5 million people check out a clip in July and it streamed 7 million videos. It’s nearest rival, Hulu (which is owned by Disney, News Corp. and NBC Universal) is beyond being a distant second. It had just 10.3 million unique viewers and 348,000 streams. One can understand the appeal of partnering with something already established rather than trying to build your own service.

But using that logic MySpace would have never bothered to launch because of Friendster, and Facebook wouldn’t have expanded beyond college because of MySpace. Twitter would have never even bothered to try to get off the ground. In the long term, the studios will regret not building their own platforms and being both creator and distributor.

If you don’t want to fumble the ball the way the sports leagues did, study your history.

-- Joe Flint