Time Warner's Dick Parson's wants a piece of Google - YouTube. Mr Parsons told the Guardian: "You can assume we're in negotiations with YouTube and that those negotiations will be kicked up to the Google level in the hope that we can get to some acceptable position."
Time Warner owns lots of content companies including; Warner Brothers, Time, HBO, Time Warner Cable, Home Box Office, New Line Cinema, Turner Broadcasting, and of course, AOL.
News Corp, owner of Fox Interactive and MySpace, also wants a larger piece of the Google pie. Earlier News Corp threatened to block YouTube from MySpace. This was probably just a negotiating ploy. Rupert Murdoch, chairman of News Corp, and Ross Levinsohn, president of Fox Interactive, are meeting with Google this week to discuss expanding their relationship. Translation? More money flowing from Google to News Corp.
It has only been a few days, and the Google - YouTube deal hasn't closed yet. How long do you think it will be until other copyright holders jump in? GigaOm says "Deep pockets do have a way of attracting lawsuits."
Value in the eyes of the beholder - Many argue this is a solvable problem. Theoretically it is. The problem is vast differences of opinion on the "value" of a music or video clip. The value to YouTube is limited to some percentage of the advertising revenue they can collect. We are talking less than a penny per stream. The copyright holders believe their content is the basis of the whole business. They believe a song clip is worth a large fraction of $.99, or a movie clip is worth some fraction of $17.00.
Crazy as it sounds to us, some copyright holders would choose to block their content from YouTube rather than accept pennies from YouTube. They don't view this as a new revenue stream. Instead they view YouTube as pirates who cut traditional sales of their content.
Do short clips really cut into traditional sales? I don't think so. Just because someone watches a short clip doesn't mean they would have bought the song or movie. In the case of Napster the user was getting the complete song so perhaps there was some logic to their argument. I still don't believe it...but that is a moot point. However, when a user views a 2 minute clip of a 2 hour movie is there really any "damage" done or lost sale to the movie producer? I doubt it, but again...it doesn't matter.
Principles matter - Copyright holders don't engage in logical debates about the "value" of their content. They own it and they establish the value. They have the law on their side and they want their money. It is the principle of getting paid for their work, for every use, that matters. Dick Parsons of Time Warner said "“If you let one thing ignore your rights as an owner it makes it much more difficult to defend those rights when the next guy comes along.”
You pay the price they want or you don't get to use their content. Simple as that. The differences in the business "value" to YouTube are not as simple.
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Agree that short clips don't hurt sales - in fact I think it's clear they enhance sales in the short term.
However I'd guess that the old media dogs can't learn enough new tricks to capture anything close to the market share they now enjoy, so they (correctly) see all this as a fight to retain as much control as possible even as the copyright ship is slowly sinking under them.
Contrary to most IMHO TW's strategy is correct - use legal means to slow things down and try to get deep pocketed new media empires to buy rights before it's too late to turn a buck. I'm not rooting for them though.
Posted by: Joseph Hunkins | October 13, 2006 at 06:01 PM
I think the copyright ship is not sinking at all. The pirates (i.e. YouTube) may have fired a first shot, but the copyright ship has not been hurt at all IMO.
Main reason being that so far the traditional revenue streams have not been hurt, and there was no money to be collected from the pirates. Now that Google has acquired YT they need to monetize their investment. This will be done by advertising, and I bet that copyright holders will show up to collect their share.
If they do not get their share, they will start to sue the pirates big time. And they will eventually stop creating unique quality content.
An interesting question is, who will produce quality content in the future?
Will Google produce quality content? Nope. They urgently need pirated content to fill their servers and to serve targeted ads. They have done in the past (see the Google libraries project and the lawsuits). No, they do not create the content.
What about the users? Well, I agree that some users are true creators who create unique content, but it's just a very small fraction who have enough creativity and technique to create good short movies. Once these creative heads plan for longer movies, they run inevitably into the money problem. To do a long movie, you need more than talent: you need time, equipment, and more talent. In short: you need money. A big pile of it. In other words: users will not be able to create quality content of substantial length.
That leaves just production companies for the production of quality content. They combine money, talent, and a business network to monetize their content. And these guys have a real interest in protecting their content, and they WILL start to sue, see above.
Sooo - I am convinced that the suing of YT (and others) will start soon. And once this has begun, the YT service will fall to pieces. At first, copyright protected content will not be allowed any longer, leaving just boring, uncreative, stuff. Approval times for new clips will increase. Viewers will leave. Contributors will leave. Advertisers will leave.
The acquisition of YT has brought wealth to a couple of youngsters who were determined to get rich quick, no matter what, on the back of content that they KNEW to be copyright protected. I sincerly hope that the media industry gives YT and Google a hard time.
Posted by: Mark Zanzig | October 14, 2006 at 06:58 AM
Maybe Myspace should have signed a deal with Yahoo! and not Google. Because if myspace was not linked to Google, they should have blocked you tube on myspace... But is that good for myspace?
Take a look to my article about digital marketing of internet pure players :
http://gregorytalon.blogspot.com/2006/09/internet-marketing-investments.html
Greg
Posted by: Gregory Talon | October 20, 2006 at 05:02 PM