What to do about YouTube?
The video Web site sure is hot enough. With user-contributed video encompassing almost everything that has ever been committed to film and video tape, the site has become the go-to spot on the Web for a quick video fix. From grade school kids practicing their light saber techniques to local bands kicking out the jams, YouTube has it all.
And that’s the problem. Due to its diligent user base, YouTube has clips a plenty, with most of those clips representing individual copyright violations. Concert clips, music videos, TV segments and movie footage are some of the most popular items found on YouTube, yet most items are clearly infringing on someone’s copyright.
How does YouTube handle it? After all, with the entertainment industry screaming about copyright infringements on the Internet, it’s hard to imagine any Web site could exist as long as YouTube has (since early 2005) without feeling infringement heat from intellectual property attorneys. Although YouTube is facing legal action from a television reporter who claims the site violated his copyright when someone uploaded one of his televised reports, infringement suits against the video site are rare. That is, so far.
YouTube’s standard defense is that it is merely a service provider, and that it will remove any copyrighted material once it is notified by the content’s owner. The most notable example of this is when the site removed a clip of a "Saturday Night Live" sketch after complaints from NBC. However, the entertainment industry is in a quandary about YouTube. While movie, music and film execs aren’t all that thrilled about what they see on the site, they can’t help but notice the its popularity, second only to MySpace in recent Internet success stories.
During a Merrill Lynch Media & Entertainment conference in Pasadena, Calif., Universal Music Group Chief Executive Doug Morris indicated that the label might be on the verge of taking legal action against social networking sites such as MySpace or user-contributed video sites like YouTube.
"We believe these new businesses are copyright infringers and owe us tens of millions of dollars," said Universal’s top music man. "How we deal with these companies will be revealed shortly."
Actually, how Universal deals with such sites may depend on what happens in the conference room. Published reports indicate that the record label, along with Sony BMG, is pursuing some kind of an arrangement with YouTube. Depending on how negotiations turn out, Universal will either attempt to sue the pants off of the video site or sing its praises. It’s just a matter of time.
But while Universal mulls over what to do with YouTube, another major media company has already come to terms with the video upstart. Warner Music Group recently struck a deal to distribute music videos, artist interviews, original programming and other content through the Web site. The agreement also gives YouTube users the ability to incorporate WMG content into their own videos. Legally, that is.
The WMG / YouTube agreement is being hyped as the first of its kind between a major media company and user-generated content site. But you can bet it won’t be the last.
The entertainment industry realizes there is more to gain from working with sites such as YouTube than against them, and other companies have already launched, or will launch, similar sites. Yahoo has Yahoo Video, and Microsoft recently launched a beta test of its own version of YouTube, called Soapbox On MSN.
And there are other companies working with YouTube. Cingular Wireless recently announced it will sponsor a "battle of the bands" on YouTube and will shell out a considerable amount of cash for a competition involving local, unsigned bands submitting their own videos.
But is there money in showing user-provided videos? While immensely popular, YouTube has yet to make a profit. In fact, the site has reportedly been subsisting on a combination of credit card debt and $11.5 million in venture capital. Some watchers are speculating that the company might have to bring in more investors or seek a buyer that can figure out how to change red ink to black.
In the meantime, YouTube continues to serve up more than 100 million videos per day, proving that there is definitely an audience for a video vault consisting of everything and anything. Wouldn’t be ironic if, when you consider the millions upon millions of dollars media companies spend to attract viewers for their TV programs and movies, the only thing people really want is to see is some kid practicing his light saber moves in a garage?