1. Yeah, this makes sense, except for one thing on the rss-feed splogs. They usually don't have an "about" page (no email), there is no reference to the host provider, and comments aren't allowed. It's nearly impossible to figure out who is hosting the splog without trying to snoop the whois listings. It's not an easy battle, those splogs!

Posted at 12:17AM on Oct 12th 2006 by Jetson Green

2. I don't think anyone will argue that this is yet another Napster story and there is pretty much no way that content and media companies will tolerate copyright infringement in the open sponsored by iconic enterprises such as Google. It's a no brainer and after having framed the problem so clearly, I'd like to hear you suggest possible ways to remedy this rather than having you expend your intellectual resources on reiterating and clarifying your stance is clearly an open-shut case.

One idea of the top of my head:

Build a moderations system. The model would comprise of moderators (media companies; users won't make good moderators since they wouldn't vote against copyright content). Either the media company (if they are big) could directly delete content with Google moderating the moderators or if the moderator is a small media company they can click a link to notify the uploader and Google at the same time upon which the user will have X days to respond.

Now the burden of copyright filtering can be shifted to the media companies.

That might be the key: to shift the burden of responsibility out + have autonomy around the process. If Google can build a legitimate framework and find a way to scale it while compromising the copyright content YouTube might not have as much content as it does right now, but YouTube can still be the market leader and its % market share shouldn't change as everyone will take an equal hit.

Posted at 2:15AM on Oct 12th 2006 by Why dwell on the failure scenarios?

3. The ultimate end for all of this will be with pay for consumption models. We're not there yet, but it's coming.

Imagine the company that acts as a middleman between advertiser, content creator, and consumer in the following manner:

Advertiser purchases some as-yet-undefined unit of viewership/attention/consumption from third-party vendor. Consumers sign up with third party vendor. Third-party vendor distributes content + advertising. Third-party vendor splits advertising fees with content creators (you know, as much as they're legally forced to do so) AND with consumers - in exchange for their consumption.

The variables at any point in that equation can be tweaked, but the dynamic remains the same.

Need exposure? Pay for it - almost directly. Bribe your customers. Buy your demographic.

"It pays to pay attention."

-t

Posted at 2:16AM on Oct 12th 2006 by nonattender

4. You assume that the success of YouTube is purely driven by technology and the ability to circumvent copyright laws – therefore anyone else with the same technology will exploit the same laws and compete with GooTune, reducing its monetisation prospects.

However, your argument omits/dismisses the social network aspect and the ability to attract a community AND the brand recognition of YouTube and Google which all play a BIG role.

I think GooTube’s got legs and could make few bucks with a variety of business models that could even rival iTunes.

Posted at 4:12AM on Oct 12th 2006 by Phillip

5. The user base on YouTube.com is already feeling uneasy about this corporate acquistion by Google. You can see a sense in the comments being posted that they are already feeling the "wild west" fun of YouTube.com is being displaced by a more commercial and corpie tone.

I think for the success of YouTube.com to continue Google will have to let it have its own independence and not over "legalize" it. If YouTube loses the support of the commmunity, they'll migrate elsewhere. So the power is in the user's hands.

Google's legal department obviously won't go for the "wild west" post whatever you want posture anymore, so there will be an internal struggle between the restrictive "suits" and the let it be free "marketing" depts.

The media giants want and need YouTube's immense traffic base to boost their content sales and grab users to their artists and program sites. Traffic is what drives the Net. Bottome line, they'll sacrifice enforcement of their copyrights in exchange for some token minimal licensing deals and all the hefty free PR they'll continue to reap from the billions of vid downloads.

Posted at 7:27AM on Oct 12th 2006 by Kevin

6. Mark,
Kudos for pointing out the realities of the Goooof by Google and the realities of the lawsuits. Here are some things that bother me about the way Google is conducting business

1) They found the Goose that lays the Golden Egg (Search advertizing) and now they are going to kill it.
2) All the analyst that say how many eyeballs (scary huh..history repeating itself) they are getting. Google has 60%+ of the advertisment market. At a minimum 60% of YouTube user already probably use Google and it is probably higher
3) When you invest $1.65 bb in a venture and you expect atleast a 15% return that is $250mm in PROFITS (PROFITS...IT IS JUST PROFITS or was it PRACTICE...IT IS JUST PRACTICE by Alan Iverson) that they are falling behind on their investment that they need to overcome and then make. Assuming that they get to keep 20% of ads, then they need to make $1.25 bb in profits from advertizing every year on YouTube to make the investment work.
4) Mark my word. MICROSOFT and YAHOO will merge their internet businesses under YAHOO. Look at the synergies, Microsoft is working hard to improve their search technology. Yahoo is working hard to improve their adverisment placement. Microsoft has spent a lot of money to improve their mapping technology and is offering a free version of its works suite online. Yahoo has the users who can use it. Microsoft is working on developing its social networking. Yahoo is working on Video. It seems strange that they are each working on complimentary areas
5) At what point does Google start facing anti-competitive allegations and having to deal with being the 1000 pound Gorilla in the internet area.....
6) Paying $1.65 bb to buy face book has boosted Google Market cap by about $10bb..... If they just start dropping money off a plane.....imagine how big they can be..... :-)
7) How much have they spent now $2bb to AOL, $1.65 bb to Facebook, $2bb to Dell, $900mm in guaranteed revenues to MySpace, It is like a kid in a candy store on an expense account....

Will stop ranting now... my fingers are tired...

Posted at 8:00AM on Oct 12th 2006 by KK

7. While I won't disagree with you. I think a much better model for Youtube's future would be for it to remain the way that it is. Look at Myspace, Newscorp has changed it very little. It is still pretty much what it started out to be. The best thing for Google and everyone else would be to let Youtube stay the way it is. Why mess with a good thing? Youtube is so crazy big and so good for business I doubt anyone will ever sue if copywrited content shows up, no matter who owns it. Youtube is good for business, everyone's business.

Another good reason to leave it alone and keep it seperate is that if people do start to sue, Google can let Youtube take the pain for having illegal content on it's site, while porting over all the public domain video to Google Video. That way if Youtube does go the way of the dinosaur, Google will have still retian the majority of Youtube's content.

Mark

Posted at 8:24AM on Oct 12th 2006 by Mark McKay

8. Is this all pointing to an AAPL short????? Can we start discounting the EV of Itunes???

Posted at 9:25AM on Oct 12th 2006 by Gildo

9. I think it's time to accept that many people (I'm thinking at least half of the downloading community) just WON'T pay for digital content anymore. These people are not going to change no matter the outcome of the You Tube/Google deal. They'll buy hard copies of books or a CD they can't find online or maybe even a movie. Doesn't it seem like everyone rents from Netflix and just burns copies? Everyone knows that. Where are the lawsuits?

I'm not sure, in the new world that is the internet, despite internet laws, you can actually truly own content. You can own the CDs and DVDs "content owners" have made but the content itself is now a shared commodity and perhaps it should be. As far as music, you have be able to perform live. As far as movies, if it's truly fantastic the downloaders will go out and buy it.

So will Google be sued? Of course. Will it change a thing in the grand scheme of things? No.
Limewire exists.

Posted at 10:10AM on Oct 12th 2006 by Steve C

10. Mark,

You have been consistently wrong on this issue since your first post last month. I do not believe that the media companies will start a wave of law suits against YouTube imitators to set precedents and secure better licensing deals. What I think we will see, is a wave of acquisitions by the likes of Yahoo, AOL and possibly even to a lesser extent Microsoft (they do have Soapbox in the pipeline), of these smaller imitation sites. Google's timely acquisition will more than likely force the hand of the other big internet players to act now and buy into the online video sharing business. I imagine the owners of such sites will be more concerned with the acquisition price than any potential lawsuits.

Posted at 11:07AM on Oct 12th 2006 by burtoma

11. Now MySpace is interested in meeting with Google (again).

Google is either onto something big -- or they are royally screwing themselves. I guess only time will tell?

Posted at 12:37PM on Oct 12th 2006 by Jesse

12. You are 100% right.

This scenario is exactly the pattern what happened with a ringtone business (for cell phones). Our company was one of the first ones in the market back in (year) 2000.

E*I, Wa*ner, S*ny, Fa*ous Pub... & Co. attacked (with their thousand-dollars-per-hour lawyers) some small players scaring the daylight out of them with their $50,000 per infringement (= download) fine threats. These weak minds signed deals and suddenly it was an "industry standard".

Now publishers make more money out 30 second ringtones than an actual song!!

It's going to be interesting though; Google is nowadays pretty big bite to chew.

Posted at 1:06PM on Oct 12th 2006 by RockyJay

13. I know you remember when the movie industry tried to sue the VCR out of existence. That would have been the absolute WORST thing that could have happened to showbiz, robbing it of billions in vcr (and now dvd) sales.

Content on YouTube and the other smaller sites is going to go the same way; media companies will realize that these sites are great exposure for them, the content producers. You see an episode of "Lazy Sunday" on YouTube and like it then chances are you'll watch SNL to see more of the same.

IMO content producers are going to realize that fighting these sites is going to rob them of viral marketing power, and they'll end up capitulating.

Posted at 1:08PM on Oct 12th 2006 by Joe.

14. I'd like to know how many embedded videos are streaming versus how many people are actually going to youtube.com.

I think 95% of the content I've watched off youtube was illegal and posted on another site. So are they planning to put text ads in the flash player somehow?

Posted at 2:07PM on Oct 12th 2006 by Tom

15. I found a clip about this issue on the CBC site for The Hour. I don't know how many of you may have already seen this but it is an interesting clip nonetheless.

They hit on a lot of the same points as Mark does.

http://www.cbc.ca/thehour/video.php?id=1082&mode=q

Posted at 2:43PM on Oct 12th 2006 by Rebeccalee Coventry

16. I give you props admitting you were wrong. Bravo! Keep up the good work Mark.

Posted at 2:53PM on Oct 12th 2006 by C.Sage

17. I think they have a plan to take Youtube in another direction. 99% of the stuff on Youtube is short video that is otherwise not monetized by the media companies (or isn't owned by them anyway) - AOL.com offers music videos for free on their site, and Youtube can always cut them in on advertising for legitimate things like that. I mean, Fox keeps yanking the cheesy 90210 opening credits off Youtube, but is there really a compelling business reason? It's not like Fox is offering this - yet.

Google has the technology to really make the advertising effective and to host media companies' short videos (i.e. let us host the 90210 opening, we'll sell your advertising and let the users comment on it like always). Like all the highlights of the Jets' draft blunders - who else would be able to make money on that? Google uses Youtube's users for promotion, not for free content, because they can pay royalties and still make money, as they do on their own video site.

So why are the media companies sitting on their hands? Their future is HD - you know this well, Mark. They can't compete with the Youtube low definition stuff, because the Internet IS the wild west and even in physical formats, there's whole factories in China pumping stuff out by the billions illegally. Why bother?

So they're just focusing on locking down HD-DVD and Blu-Ray (both of which need to connect to verify ownership, iirc).

The trouble is, if HD is cracked, that's the ballgame. There's no reason to buy another copy of Star Wars once you have a hi-def version, there's never going to be a reason to upgrade. So once the digital versions of these movies get online they're done. If the HD version of Star Wars was on Youtube, they'd be sued out of existence and the entire city of Los Angeles would go to war with Silicon Valley. But that's not happening for a long time, and I think the media companies feel better with Google in control than Youtube lone-wolfing it.

Posted at 2:58PM on Oct 12th 2006 by solomonrex

18. There are all sorts of opinions why this deal is good or bad. Within this context, one thing that is lost is that, consumers are driving this change and as any smart business would do, listen to your customer. With all due respect to copyright protection and law, here are thoughts of 2 cents

a) The fundamentals value economics of content are changing. Value of content was determined by the owner and players in the distribution value chain.
b) As any economist would say, value is a two sided equation and you have to include the consumer of that goods/services.
c) Content owners previously had an very inefficient distribution mechanism that bloated the prices of these services.
d) Along came internet/techologies that made distribution as efficient as possible and thereby reducing the price that was marked up due to inefficient distribution
e) Consumers of today are very demanding and they want what they want the way they want. period. No questions about it. They will seek out new ways at an appropiate value coefficient for any service.
f) All these content owners who are clamoring for rights payment. They need to understand that most of the content has to follow the diminishing returns of scale on a time axis. You cannot go after a user that consumes your content and say wait a minute, that's my content, and I need to get paid for it. Sure, you will get paid. Make it easy and seamless to me as a consumer. Don't blame me for your systems ineffectiveness get in my way of watching what I want to watch.
g) An year old movie clip on the internet, if watched by millions of users, should be monetized in different ways instead of threating the very system that allows this distribution.
h) Imagine a muddy river bed flowing that may contain some percious stones. People will go out and find those precious stones for themselves. Most of the content produced is like muddy water, all those grad students in the dorms (whom u make fun of), will get those gems out for others to watch.
i) My question is what is CBS or other studios, would say a David letterman or John stewart show of October 12th 1999 is worth. If someone watches it on the web posted by a user, why does it have to be licensed and copyrighted, when there is no system in place to get it in an easy way and at will. It is anyways rotting in those studios warehouses.

Posted at 2:59PM on Oct 12th 2006 by calerius

19. Since when did the term social networking mean violate all laws because everybody else is? Many people go around actually buying music, or buying video, and by doing so they give the copyright owners money.

But nowadays it seems that if you just claim that you are social networking, that that gives you the right to steal. I damn sure work hard for my money, and when I see that stealing is the new norm it infuriates me, because that is exactly what is going on at Youtube.

If attracting a community means post copyrighted content in order to get people to view it and download then I want no part of it unless I have the rights to use said content.

Ah well, rant over.

Posted at 3:13PM on Oct 12th 2006 by Tracy

20. I don't think you were wrong at all. The studios are just smarter than to attack a dog that's bigger than they are. They'll just ask for free advertising and spend their time on a contract rather than in a courtroom on a lawsuit. The big question you present still exists though, what is this going to do for copyrights? They can't be protected if the studios cave to Google in any other way. Otherwise everyone else will just say well you let Google do it we too are entitled. Either way if the copyrights are not enforced or the case is not settled with Google, it'll be the end of copyrights, and they surely won't have that, despite it's inevitability.

Google is smart enough to know it's the metadata and targeting profiles that counts. Ads is just the application, and copyrights simply secure the channels so consumers can be targeted. With Google being a megachannel, who needs to secure channels with copyrights? Studios can't push aside Google like they can a faceless consumer, so it'll simply turn into a settlement deal that will boost both their profits. That's just business. Google was simply buying the market, not unlike Yahoo when they bought Geocities, Newscorp when they bought MySpace. The market will evaporate over time and new one will pop up for someone else to come along and buy. Remember when Yahoo bought Geocities? Or how about Lycos?

Posted at 5:47PM on Oct 12th 2006 by Jake Lockley