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…
You can’t compensate everyone, because lawyers would need to be involved, and so much stuff on here isn’t kosh. Which isn’t a problem now, but when $$$ gets involved, it changes.
YouTube’s audience is ginormous and ridiculously engaged. The challenge isn’t coming up with a way to monetize it, that’s easy. The challenge is making the sort of huge, traditional advertisers that can afford to come here:
1. Creative enough to capture this audience’s attention.
2. Ballsy enough to present their brand against this content and accept the reality that user-edited sites can’t be completely controlled.
3. Trusting enough to think that content–and where their brand appears–can be controlled. Which is just not plausible.
My $.02.
“when $$$ gets involved, it changes”
Well and that’s precisely the issue at hand. YouTube has much work and “sleeping with media giants” to do before they can seriously get involved with an ad model system because if they start collecting ad revenue off pages containing copyrighted material, they will lose the protection they are currently hiding under.
Excellent read on the topic here:
http://www.techcrunch.com/2006/09/21/youtubes-magic-number-15-billion/
Well, I think that this really isn’t an issue anymore…
So, I’ve been thinking about this since the Google acquisition. I bet Goog takes everything copyrighted off.
Everyone thinks the buy is dumb, and the question is no longer “is it worth it” but now “why the hell did Goog do that?”
Since YouTube’s never actually turned a profit, Goog’s clearly paying for potential, right? What if it’s about predicting future demand for delivering television, movies, music? Like, you know, iTunes. A year ago, they probably knew how to let us download videos and stuff, but they didn’t actually make it work till they got it all squared legally, right?
Also, YouTube’s biggest asset has gotta be its audience. They’re super young compared with other sites, and young people are increasingly getting media online, right?
So, maybe the question of avoiding lawsuits was the wrong one …
You are slacking, Sean. Tell us about…you know….