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The Secret To Starting A Huge Video Company

Cheat a little.

Posted on May 11, 2012, at 7:15 p.m. ET

SocialCam, an insanely popular iPhone and Facebook video sharing app, has been misleadingly reposting famous old YouTube videos as user content in a ploy to boost growth. It's been successful, too: The appeal of old "Evolution of Dance"-type videos, combined with a nearly automatic (and borderline deceptive) Facebook signup and sharing process, has brought in tens of millions of users in just a couple weeks.

It feels scammy, or at least dishonest. SocialCam, on its face, is supposed to be like Instagram or Viddy, populated with content created by its users. But however distasteful it is, SocialCam is borrowing from an old video company playbook, following the guide written by none other than YouTube.

Here's the easiest way to build a huge video company:

1. Make site a site

2. Fill it with ideal content that you don't quite have permission to use (or let your users do the same)

3. Gather a gajillion users. Hoard them.

4. Switch from iffy to fully legit content

5. Keep as many of those old users as you can

It's hard to name a big video site that didn't start this way. YouTube was full of variously infringing content until it introduced Content ID in 2007, but by then it was already the dominant video site. (YouTube didn't respond to a request for comment on this story.) Scores of competitors — think DailyMotion and Veoh — were then able to rise to prominence by essentially being temporarily laxer versions of YouTube, where you could find music videos, TV clips and even full TV series. Many of the big porn "tube" sites became (whispered) household names by looking the other way while users posted tens of thousands of videos from for-pay sites.

Even Netflix followed a variation of this proven plan: For three years, Netflix Instant had a large selection of big-name movies courtesy of a sort of one-time licensing loophole with Starz, which was closed as soon as it came time to renew. By then, of course, Netflix was a juggernaut.

SocialCam is more egregious than its predecessors only because when you take away all the rebranded YouTube content there doesn't seem to be very much left. Without a solid base of video-producing users, SocialCam is basically just a crude machine that feeds YouTube's most popular content into the Internet's most effective amplifier, adding nothing in the process.

That might be enough to get people to sign up. It might not be enough to get them to stay. But so far, at least, everything is going to plan.

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