Over the past months, a large question on people’s minds concerning the over-night Internet sensation YouTube has been, “how will they monetize”. After reading this article featured on ClickZ, it seems that through an effort to create a marquee relationship and generate revenue, YouTube is walking a very fine line of appeasing its users and stakeholders alike. The big news this week in concerns to YouTube has been the reported deal between the Internet video site and Warner Music Group, in which Warner will allow its library of music videos to be used on the site and even make available its content for inclusion in user-created videos.

The danger that YouTube is going to encounter in this relationship is the outcasting of the 16-year old kid making a video for their site, whose creative energy alone is the reason that YouTube has obtained the clout it has. Basically, what we are running into is this line drawing fallacy in which Warner’s intellectual property is being considered of worth for profit sharing but nobody is compensating the little guy who spends countless hours in his bedroom editing his video in Windows Movie Maker. The question I ask is, should everybody involved be compensated? Where do we draw the line? I think this is going to be a continual theme with the rise of user-generated content…