What is it about youtube.com that has made it so successful so quickly ? Is it the amazing quality of user generated content ? Is it a broadband fueled obsession with watching short videos ?
No & No.
Youtube's rapid ascension to the top of the traffic ranks can be attributed to two and only two reasons:
1. Free Hosting from any 3rd Party site
Hey, why pay for bandwidth for a video if you dont have to ? A blog, a myspace page, an email, any website. Just throw in some html in Youtube.com foots the bill for bandwidth. Sure you are limited by size of file, but so what. Just chop it up into parts 1 through N. Its fast, easy and free.
Come to our website and use our video hosting services, we can party like its 1999 all over again !
2. Copyrighted music and video.
I dont have a count, but i bet Daniel Powters' Bad Day is attached to some video snippet of every sporting event ever played , with links sent to fans of every losing team. PIrates season, You had a Bad Day. Spurs vs Mavs. Mavs vs Suns, Mavs vs Heat , Yankees vs Red Sox, etc, etc, etc. Bad Day, Bad Day , Bad Day. If Daniel had a nickel for every time his song was used in a YouTube sports video, he would be a much richer man.
This so reminds me of the early days of Napster. They were the first to tell you it wasnt illegal. They didnt host anything but an index to link to all the illegal downloaders. Youtube doesnt upload anything illegal and will take down whatever you ask them to. Sounds legit right ?
No, but thats not the thing. The thing is the shock that until Universal Music Group apparently started to put the pressure on them, no one had sued them. Considering the RIAA will sue your grandma or a 12 year old at the drop of a hat, the fact that Youtube is building a traffic juggernaut around copyrighted audio and video without being sued is like.... well Napster at the beginning as the labels were trying to figure out what it meant to them. With the MGM vs Grokster ruling, its just a question of when Youtube will be hit with a charge of inducing millions of people to break copyright laws , not if.
And its not just people putting copyrighted music to copyrighted video to create a new work of user generated content thats going on here. ITs also become a cheap and easy way to get music. Find a new hot song, and some kid is doing a goofy dance to it and uploading it to Youtube. Some have decent audio quality. So just search for the songs, create a playlist, minimize the window and play all your favorite songs as often as you want. For free. And of course if you have no fear for the copyright police, you can use tuberaider and keep a copy.
And its not just copyright lawsuits that will end up severely impacting Youtube's business, its that their business is too easy for the people who own the copyrights to copy.
If Daniel Powter wants to encourage everyone and anyone to put Bad Day music behind user created videos, its certainly easy for him or his label to do. Its just a question of who will pay for all the bandwidth involved. If the NBA wants lots of versions of Bad Day or any other song backing videos of their games, they would be smart to do a deal with his label and have their own little hosting section on nba.com . As would any copyright owner. Maybe TNT will offer up the ability to host user generated voice overs of Charles and Kenny. Now that is using technology for a good purpose.
Whats worse for Youtube is that there might finally be an economic model for the copyright owners to host their own videos. Advertisers are chomping at the bit to buy rich media advertising and copyright owners are chomping at the bit to provide them broadband content for their ads. (Of course we are just a year away from there being far more video available than advertisers, but thats a future blog entry)
So you can pretty well bet that every and any copyright owner is going to be jumping up and down telling Youtube to remove every bit of content with any copyrighted material. The double worse news for Youtube is that wont be easy. How are you going to tell Barry that he has to take down the video of Aunt Sally getting her groove on to Long Tall Sally, and Uncle Willie doing the Hand Jive at his Bar Mitvah ? That those are both copyrighted songs that Cousin Brucie, the DJ played, and we encouraged you to break the law when we made it so easy to post them and send links to your entire family ?
How are they even going to find every instance of copyrighted music behind some personal videos ? They will have to. And it wont be easy.
Take away all the copyrighted material and you take away most of Youtube's traffic. Youtube turns into a hosting company with a limited video portal. Like any number of competitors out there that decided to follow copyright law
Youtube, we hardly knew you.
UPDATE: This morning the WSJ wrote that Warner Music and Youtube announced a revenue sharing deal.
Obviously the devil is in the details of the deal, which we dont know. Obviously the devil is in the details. We dont know what the percentages are. We dont know how capable a salesforce Youtube has. We dont know what percentage of revenue their streaming costs take up (remember, streaming costs per bit dont go down as volume goes up, they go up at very high volume levels) and we dont know just how diligent they are going to have to be for Warner MG to recognize WMG copyrights.
Think about it. In order for them to recognize a copyright violation in the bar mitvah tape, they first have to identify any and all songs, then they have apply that to a list of WMG songs. That aint going to be cheap to do.
Does this make a difference in my thinking ? Not at all. In fact its reminds me of when Bertelsman cut a deal with Napster. It sure sounded nice, but didnt amount to much of anything. Kudos to WMG for giving them a chance and probably leveraging the hell out of Youtubes traffic, but this is just one copyright owner out of the thousands, if not tens of thousands owning copyrights that are most likely being illegally used on Youtube.
The Coming Dramatic Decline of Youtube
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(Page 2)22. This is old news
LOS ANGELES — Universal Music Group, the world's largest record company, contends the wildly popular Web sites YouTube and MySpace are violating copyright laws by allowing users to post music videos and other content involving Universal artists.
http://www.foxnews.com/story/0,2933,214005,00.html
Who cares about Youtube.
The question is how is Rupert Murdoch going to answer this.
Posted at 8:51AM on Sep 18th 2006 by Dirty Muffin
23. Chris Tew: Frankly, I'm tired of hearing everybody talk about how companies like Google didn't have a monetization model when they started. Most companies that are unable to develop a proper business model fail. Companies like Google are the exception, not the rule. If you start a business without any semblance of a business model and think that you're going to eventually figure it out because Google did, you're in for a surprise. In YouTube's case, they have less time to figure out how to monetize because their operational costs are so high. As Mark noted, they are basically a hosting company that is offering to host the most bandwidth-intensive content for free. Great deal for me!
You are absolutely correct that YouTube has a massive audience, but when publicly-traded companies make major acquisitions their valuations aren't based on Alexa traffic rankings. They're based on revenues and earnings. Anybody want to guess what revenue multiple it would take to get YouTube $1 billion? Do note that Viacom’s new CEO Phillipe Dauman recently told the Financial Times that Viacom will not be pursuing any major acquisitions because of fears that they will overpay and hurt shareholder value. There appears to be a shift in the thinking out there. Media companies are going to be looking to acquire smaller, promising startups earlier on in their development when they can be bought cheaply.
Let's not forget that YouTube hasn't done anything remarkable. Any business that gives stuff (like massive bandwidth) away for free can easily become quite popular. How hard was it for Napster to become popular? Giving away something that people want and normally have to pay for is a good road to follow if you want to get popular, but it's typically a bad road to follow if you want to build a real business.
Somebody might buy YouTube, but I think it'd be a huge mistake. Part of YouTube's popularity is due to the fact that it's independent. If anything, I think the media companies will do deals like the one Warner just announced, which forces YouTube to pay them and puts the burden on YouTube to monetize. It's ideal for the media companies: they get paid for their content, YouTube still has to foot the bandwidth bill and the media company incurs none of the risk that would come with actually acquiring YouTube. YouTube becomes another distribution platform for their content, just like their homegrown online video services. They don't have to acquire to get what they want.
24. Damn it Mark. Why do have to be so right all the time?
Posted at 9:45AM on Sep 18th 2006 by Rebeccalee Coventry
25. youtube may have been foreseen that issue. so, they have already a "defense" against lawsuits
but as a viewer/user in youtube, it says "broadcast yourself"(filming yourself, your buddies, your pets, etc using your own)so it does make sense that youtube assumes that any uploaded files made by the user was user's copyright, license, owned.
and as long as it is not offensive it's safe.
26. Burden of copyright enforcement is on the copyright owner. That said, there may be contention surrounding any technology which encourages (or looks the other way) when it comes to infringement. But this issue is less of a problem of technology (which is bounded by the laws of physics) and more a general problem with the system of copyright. Sites like YouTube will force re-examination of copyright enforcement, exploration of the boundaries of "fair use," and the consideration of alternative models of monetization or compensation. Basically it forces the untenable hand of an industry which has relied on impractical mechanisms for far too long, and taken old world market successes for granted.
Go YouTube! The following articles explain why I think that YouTube is part of a revolution, not a "bubble" which will be burst by copyright issues:
Rip, mix and burn culture: http://www.infreemation.net/2004/10/26/infreemation-and-the-evolution-of-memes-rip-mix-and-burn/
Mashups - beyond "fair use": http://www.nudecybot.net/2006/02/08/mashups-from-hobby-to-art-form-to-controversy/
Internet freedom:
http://www.infreemation.net/2006/06/04/the-internet-wants-to-be-free/
27. Agree with some of the others -- they won't be sued. Why? It's a great ad/promotion location. Yes, companies could put these videos on their own sites but they don't because people aren't on *their* site - they are on YouTube.
Posted at 10:35AM on Sep 18th 2006 by Alexa Smith
28. I don't know about the whole Youtube thing, but I agree with the guy's video on the Pirates. SAVE US MARK!
Posted at 10:47AM on Sep 18th 2006 by Chris Brass
29. Oops.
Had you waited one more day, you might view things a tad differently...
"Video-sharing site YouTube has signed a deal with media giant Warner Music to allow its material to be used legally."
http://news.bbc.co.uk/2/hi/entertainment/5357390.stm
Posted at 11:30AM on Sep 18th 2006 by MD
30. youtube.com is turning into myspace.com, a very large cesspool. There's the occasional original funny video on there, but for the most part, it's junk. And with people having the ability to change their profile page, it's going to attract all those that can't design a web page if their life depended on it.
It's a fad that will surely and slowly die off..
31. YouTube and Warner Music sign a licensing deal.
http://venturebeat.com/?p=1933
Posted at 11:41AM on Sep 18th 2006 by B Kresge
32. Mark, blogs such as this show how it is that we are moving towards a corporate-ruled society. I mean the problem, the thing that you failed to touch upon, is the notion that there is nothing Nefarious about YouTube, at least not in the sense of community. Yes, there is rampant copyright infringement going on, but I don't believe that it will move to the extent that you prophesize here.
YouTube IS THE REASON THE INTERWEB EXISTS! This collection of tubes that make up the internets is a conduit to bring our world closer. Since the proliferation of the World Wide Web, the world has indeed become that much closer. Having fanmade videos using music we all know and love sets a sense of kinship between people regardless of culture, nationality or anything else you can think of. THIS is why YouTube is so popular.
I am sick of having to deal with the reality that corporations are actively putting a price on community. But at the same time, I realize how all this can be returned to piracy, because it's all about the dollars, I know and accept that.
At this point, I would rather have the Internet be collapsed than have to deal with the commercialism of it. DRM and the RIAA make me hate loving music. Soon, if we sing our favorite song, we will have to pay for the right to do so. The idea of enjoyment has been eclipsed by turning a buck.
If YouTube falls, something will take its place, and people will still follow.
Honestly, and this is something for everyone to ponder: Do we listen to music and watch video because we are to enjoy it, or because we need to make sure to make sure that commerce flows uninterrupted? I think the answer to this got lost in translation long, long ago...
Posted at 12:15PM on Sep 18th 2006 by Hashim Hathaway
33. Here is my off the cuff reaction: I think that the Time-Warner deal will make it unlikely that Time-Warner will sue, for obvious reasons. However, if I were a Time-Warner competitor I would sue YouTube.com—especially now—not to protect my own content but to take a pot shot at Time-Warner.
34. I'm just curious, since lots of people have weighed in on this, but does anyone have an on-point, unequivocal legal precedent that says "If I make a minute long video of me dancing to a portion of a copyrighted work, I'm violating that copyright" I'm not saying this facetiously, because I wouldn't be at all surprised if no such precedent doesn't actually exist. This isn't to say that a court WOULDN'T find it a violation, or that the attrition argument of copyright ligitation isn't significan't. But people are overlooking the fact that with Napster virtually ALL of the copyright infringement was on complete works: songs, albums, movies, etc. I'm not sure that the law is as clear on what happens if you take a portion of a copyrighted work, add content/repurpose it and create something original.
I can't go into a library, borrow a book, type the whole thing into my word processor and then post it wholesale on the Internet. If I'm writing a paper, however, and take a portion of the work for other purposes, the law becomes much less clear. So while posting an entire episode of a TV show may be infringment, posting a short clip for the purposes of public commentary/review may fall under some version of Fair Use. I'm not a legal scholar, but I'd be interested to hear the counterarguments to my statements.
Posted at 1:38PM on Sep 18th 2006 by Ali Nagib
35. I don't have too much knowledge about youtube, but the few times I've visited it has been for the short home videos, those are far more entertaining than any professionally produced anyways. Even if the copyright owners sue I don't think it would hit them too hard.
36. "So just search for the songs, create a playlist, minimize the window and play all your favorite songs as often as you want. For free. And of course if you have no fear for the copyright police, you can use tuberaider and keep a copy."
Do you have any evidence that this actually happens? Kids are way more sophisticated than this. It sounds like something a lawyer or over-40 came up with (maybe even an over-40 lawyer!). It's completely bassackwards and about as user friendly as a punch in the face. MySpace and PureVolume have way more music at much better quality and with a real searching interface.
This sounds like about as big of a problem as people DVRing MTV so they don't have to buy CDs... I'm calling bullshit on this one.
37. Lame comparison to Napster. Doesn't compare. If the recording companies had treated Napster like Hollywood is treating YouTube, everything would have turned out different. YouTube's innovations within a traditional business model (advertising-supported) are without peer and in this regard they are also no comparison to Napster. YouTube is seen as a parasite and the large media co's are the host, but I think you'll start to see these roles reverse in a few years.
Posted at 3:05PM on Sep 18th 2006 by Michael Martine
38. Maybe video and audio aren't as closely married as we thought. Maybe youtube.com will just grow and transform into something even better.
Maybe not.
I'm still all for youtube, but only because I have a tiny company that needs the help. If I didn't need the traffic and sharing ability, I would go at my enterprises via a different route... I think youtube is infectious with the literary culture I'm trying to reach. So I use it.
Just for posterity's sake and so you can make a mental note. I found your blog from the book, Naked Conversations. -n.l.
39. This RIAA is killing everything, who wants to share something. They closed eDonkey! :(
Posted at 4:53PM on Sep 18th 2006 by Hard Boiled
40. Hi Mark,
I am not convinced that someone is violating copyright law when they distribute a home video of grandma dancing to a song, because you can't prove that people watch it because of the song.
What happens when someone catches their grandma on film drinking a Coke and listening to Tricky, and there just happens to be a donkey show in the living room? And when grandma puts down the Coke on the table, the camera angle makes it look as if the Coke is resting on top of the donkey's back.. And then the video become viral and millions of people start making viral Coke Donkey Show spoofs?
Will Greenpeace sue on behalf of donkey's because coke has a reputation of lewd viral videos? Will Coke sue because it should have been a polar bear? Will Tricky get sued because he used it as his next album cover. Pathetic.
Thanks, nice article btw!
Posted at 5:35PM on Sep 18th 2006 by Ben Long
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21. YouTube is certainly interesting: 100 million free daily downloads, and as Mark says, many without legit copyright.
But iPod had 45 million legitimate paid TV-show downloads in the past 11 months and cumulative 1.5 billion legitimate paid song downloads. And 60 million paid iPod sales. Apparently, you can compete against free pirated services if you make your service simple to use and streamlined to a single function.
If you watch what people pay for and how they are using iPods, Apple's new iTV wireless video system looks like a disruptor of cable TV and broadcast networks.
Apple's iTV system rated an A- on our Disruption Score... Details:
http://www.ondisruption.com/my_weblog/2006/09/apples_itv_vide.html
Posted at 8:28AM on Sep 18th 2006 by Michael Urlocker