There are bubbles and then there are bubbles. Analysts have been worried about the imminent burst of the “video bubble” at least since last April. The Google/YouTube deal in concert with a few other acquisitions has made them more vocal. It’s just a little unclear what they are actually afraid of. The worse case scenario seems to be a shortage of video content or maybe video sites and the negative impact that would have on THE MARKET. In other words they seem to see similarities in the current activity to the events that led up to the Internet Bubble bursting back in 2000-2001.

Let’s look closer. Big numbers are being thrown around again, but now they have real businesses behind them. False starts are occurring and money will be lost. But the market is much less driven by this sector. Most critically this bubble isn’t going to burst, because of one critical similarity between IT and the events of the past.

In 2000, while the Internet crashed the market, consumers’ interest and loyalty in the Internet just grew. Ironically after that Bubble was done and gone more people were online, doing more things, more often. That trend has continued. Similarly, no matter the fate of video sites consumer interest in viewing, making, and sharing video will not falter. Just check out these numbers:

54% of online consumers shoot video on a cell phone, digital camera or video camera.
11% upload to the Web.

The delta between these two numbers is what analysts should be looking at. There is the indicator for growth of the online video market. As this delta closes - and it will - everyone will see the current video bubble for what it is, the next stage in the evolution of mass communication, with all the business opportunities and challenges usually associated with such an event. A “Bubble” doesn’t begin to describe it.

Kathy Sharpe, CEO

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