GooTube Questions

I didn’t think i would comment any more on this topic. But I couldn’t help myself.

Riddle me this

If Youtube is all about User Generated Content. If Free Hugs, fake Kevin Federlines and Diet Coke and Mentos can be the core of an entertainment business. If Youtube is completely protected under the DMCA Safe Harbor acts. Then why in the world would Youtube spend any money on licensing content ?

If copyrighted materials are just a minimal amount of content and traffic, just deal with it through take down notices. Its your DMCA right. Right ? Why spend hundreds of millions of dollars in equity and cash money for licenses that are probably no more than a few years in length and give some level of corporate “veto power” to the rights holders as to how users can use the content ?

Unless of course you think that original User Generated Content is not enough to bring in traffic.

Unless of course you think you will be sued under the DMCA and lose.

Unless of course you realize that such a huge percentage of your audience is foreign and there are laws across countries that aren’t quite in sync with US Copyright laws.

Im sure GooTube is already waist deep in this, but if observors think its hard to do rights deals now, realize that lots of TV shows, movies and other content is parcelled off to rightsholders in foreign countries. So Gootube may have a deal with a huge US Media company that produced a show, but they sold off the right to the show in Japan, or France, or Kazakhstan and you have to do seperate deals with the rights holder in each of those countries or block access to the content to those countries, and deal with the copyright laws of each. You want fun. Now that is fun.

All of which is a lot of time, money and uncertainty for such a simple, riskless deal.

Im not saying Google shouldn’t have bought Youtube. Im just saying that maybe only Google was crazy enough to take on the responsibilities of such a deal.

27 thoughts on “GooTube Questions

  1. This copyrighted content sharing issues is related to net neutrality in my opinion. I\’m honestly frightened of the big telcos like AT&T. They don\’t care about the internet\’s health and growth or its users.. Only about raising profits a little bit.

    Comment by Size Genetics -

  2. I have liked you ever since you bought the Mavericks. I usually agree on you when you are squabbling with David Stern, but after reading your blog i have really learned not to like you very much.

    Comment by Jamie Marcum -

  3. I think Google figures we have lawyers on retainer and there going to get paid anyways so why not keep them busy with copyrighting the content.

    Comment by alice -

  4. Mark, we can take our collective insight and pontification on the purchase of YouTube to the local Starbucks with $3.50 and buy a cup of coffee, and continue the pointless discussion. As always, time will tell whether or not this proves to be a wise (and profitable)decision. Certainly is fun to discuss…

    Comment by Steve -

  5. Another issue is the posting of pay per view telecasts on youtube in almost real time from tivo to a convertor and cut to include for example the pride fighting championships from vegas, 2 minutes after leaving the ring, Butterbeans cornerman called me and we already were watching it through youtube…… no need to ever buy another pay per view boxing match or ufc or wwe event…. most of the content was taken down after 24-48 hours, but in almost real time we watched the fights….. next time de la hoya fights, no way am I going to pay $49.95 when through my webtv I can watch for free without all the pre fight junk… i just want to see the fight anyway!!

    Comment by Stephen Coppler -

  6. To answer your question, they spent their money on paying off the content owners because they can do it with funny money. At the end of the day, they used funny money to buy yt for 1.6b and their market cap went up. Sounds like something you would do every day of the week should it present itself. Who gives a shit about how they will ever make money because goog just got a shitload of advertising pages….21M a day or something like that? goog already makes money and adding 21m new page views only adds to their bottom line. its not like they need to throw a bunch of infrastructure at this, obviously their infrastructure isn’t utilized 100% of the time in an efficient manner and adding more yt’s and whoever else they buy will push them towards higher utility on their deployed assets.

    Comment by tomo -

  7. I understand Mark’s concern about copyright protected material being put on YouTube. But unless the copyright owners make material readily available, then more YouTube’s and Napsters will appear in the future.

    Copyright owners have to understand a few things:
    1. They have content that people want to access 24/7/365.

    2. No matter how owners try to “hide” material, viewers will always have technology that can get around it

    3. Most people that gather material for there own use; no one ever makes any money from it.

    Comment by Randi -

  8. The heat is getting stronger for YouTube, now coming from Germany. The GEMA (one of the strongest licencing companies in Germany) as well as the record soccer club FC Bayern have announced to go after YouTube for infringing copyrights. These are powerful guys with deep pockets. It’ll be good to see the results of their complaints.

    Comment by Mark Z. -

  9. There is tremendous value in licensing deals. That’s why companies spend so much money to buy catalogues of music, film, etc. But I agree that the whole YouTube purchase makes you question the value of copyrighted (and owned) material is anyone can pretty much post it, show it, and use it to drive traffic to a site.

    Comment by girls basketball -

  10. The striking thing about the YouTube purchase is the implied arrogance of Google management. It’s far easier to negotiate with terrorists than it is to placate copyright holders. Google will find out.

    They are taking down scores of videos. Every day another of my (or my toddler son’s) favorites is removed. Just today I got an email from a NYC radio station “threatening” me if I didn’t take down one of my videos –

    (This video is hilarious by the way, watch it before it’s gone).

    I tried to reason with the guy explaining that my clip was free, viral, international advertising for him. The guy from the radio station got madder than a menstruating pit bull and thoroughly irrational. I may have to publish our email exchange at some point.

    Anyway, if a business can find a way to protect its content through technology, then fine. But if it needs lawyers, then it should consider that maybe it’s business model should be rejiggered. Learn how to embed advertising already or something.

    Maybe Mark is mad for the same reason I am? Google is 8% of my portfolio.

    Comment by CaptiousNut -

  11. Is the GOOG going to be buying Second Life?

    Comment by TradingGoddess -

  12. In response to:
    “3. Actually, I’m still having a hard time understanding how a company like YouTube would/will make money.”
    Posted at 9:27PM on Nov 9th 2006 by Tim Summers

    Tim, I wildly imagine something like this could occur:

    Step 1) Allow license holders to upload their own content at a much higher level of quality (encoding, etc) than the average joe/jane

    Step 1a) Return this content at the top of all searches it is relevant to?

    Step 2) license holders embed advertising content in stream (unlikely it breaks the user experience – Youtube fades)


    Step 2) Track advertising revenue on pages displaying this higher quality content, cut the license holder in.


    Step 3) Track down infringing low quality content to:
    i) deal with it by either also cutting the license holder in on advertising revenue as well.
    i) redirect links of this content back to the license holders page/content/advertising cut. (unlikely, it breaks user experience – Youtube fades)

    I’m sure there are other better solutions. I can see how they could build in a way to motivate license holders to buy into the youtube idea. The big key is overcoming license holder fear, making them a bunch of money off their content ought to go a long way to aid this. The other problem is that the internet is pretty fickle, if they alter the character of Youtube too much, it will wither and fade.

    Comment by Brian Paul -

  13. Mark – what about Net Neutrality? I believe it’s very important subject that hasn’t got enough attention. What’s your take on the fact that Cable and Telcos want to put a toll-bridge on the Internet? Their concerns are obvious: if they offer Internet service at 25MB or higher without restrictions on the traffic, they could be faced with loss of Video portion of the revenues as anyone could possibly start offering IPTV services to their consumers?

    Comment by Mio Babic -

  14. Crazy good or crazy bad?…..
    I think only somebody with deep pockets like Google could do a deal like that. Yes it would require some dealing but obviously Google is weilling to share the pie. I think that is the difference.

    Comment by Antonio Howell -

  15. Why do you hate YouTube soooooo much? You have been obsessing about it for a few weeks now.

    Comment by Dprime -

  16. I think Google’s army of lawyers can handle any issues that come up…no?

    Comment by South Bay -

  17. At the Web 2.0 Summit earlier this week, Internet cheerleader Mary Meeker (an analyst from Morgan Stanley) gave a talk in which she suggested that video content on the Internet would be some mix of amateur, semi-pro, and professional. What’ll be the exact mix? Hard to tell at this point, she said.

    That sounded pretty right to me… and that is probably a mix that YouTube, which sees itself as a general-interest network (like the NBC or CBS of old, it’s a cornucopia of sports, news, entertainment designed to have something to appeal to everybody) believes in, too. It *is* gonna be tough to build a big business around just amateur content, or even amateur and semi-pro stuff.

    But even if we imagine that Meeker’s mix — the kind of video content we’ll consume on the Net over a given month — will end up being 70 percent professional content, 20 percent semi-pro, and 10 percent amateur, the significant shift, to me, is that we’ll be watching a *lot* more amateur/user-gen content than we ever have since the invention of movies or television. Even at 10 percent of our time…

    Comment by Scott Kirsner -

  18. To answer another poster, I can’t ge into Mark’s head, but I personally thin this is important because it will ultimately shape legislation on copyright law. I’d have to guess at least 75% of the US is in violation of copyright law by now. My question is this, does viewing copyright content violate copyright law? I put up a saw of myself performing a terrible version of a copyrighted song, does that violate copyright law? These are questions we need answered.

    Comment by superdave -

  19. Mark I agree with you as always, Google will encounter tougher times in the future with all of the licensing and rights issus.

    Your Anonymous Email Tipster

    Comment by -

  20. (Mark Dont Delete this, this is just Real talk, Not a dis. Just keeping it real)

    You said Im not saying Google shouldn’t have bought Youtube. Im just saying that maybe only Google was crazy enough to take on the responsibilities of such a deal. -Mark

    No, you really are saying Google shouldnt have bought Youtube, because youre a hater LOL Dont lie (seriously) just come out the closet and say it. You have been drinking this bottle of haterade for so long, probably ever since the idea of it happening came up. See link for definition –
    (Number 2 on that list is my Favorite LOL)

    Mark come on keep it real you hate the idea of Google buying Youtube, be honest. What I dont understand is why? Does it upset you because you feel Youtube is getting a free pass because they have been stealing copyrighted material?

    I could respect your viewpoint more if you just keep it real. You hate the idea of a company just getting away with stealing copyrighted material and then becoming rich from it Me too, but dont the Record companies do the same thing. Dont they rob artist blind buy signing deals with Microsofts Zunes Marketplace and Youtube that will never pay the artist one red cent.

    You probably say thats their right because they signed the artist right? And Im sure Youtube says hey we never said putting up copyrighted material was ok, but yet it doesnt stop the robbing from happening.

    Maybe you have seen that Movie who killed the electric car. Amazing movie by the way, but the point is big business doesnt fight fair.

    But at least corporate America knows how to rob you legally. Didnt Youtube play by the same rules. Mark seriously why the tall glass of haterade.

    You are seriously hating from the side lines. Keep it real, its your blog tell us why you are mad. What is it that bothers you so much about Gootube. What it represents, what it will become, or how it became successful What is it? I really want to know? I think the readers would like to know too? And keep it real no sugar coating. I want it raw.

    You hate it, you love it, or you really dont care one way or the other?

    Comment by Crazyglues -

  21. Mark,

    I’m glad you wrote again on this topic, and hope you do so again. I’m really hoping you keep asking the guy behind that Pho List post when more of those details are going to become really public. If true, that’s an A1 Wall St. Journal story, and lawsuits that will drag out forever.

    I agree with you that it sounds true, but that’s not quite the same as being true.

    As for your post about blogpimping… In the same way that you LOVE the new NBA, I say that you are WRONG about blogpimping! I am shocked! SHOCKED! I discuss this in more detail on my blog,


    Comment by Scott Yates -

  22. The problem is that the more they go into editorial control, the less they can rely on the DMCA to protect them. IMHO if they exercise editorial censorship, it becomes YouTube’s content, which would make them more liable.

    Comment by Robin -

  23. Mark,
    You think this is a riskless deal? – maybe if you were an un-employed lawyer looking for a perma-gig.
    I think these guys (google)have been spending too much time reading their own press releases. The real winners here are the companies that “lost out” on this one.

    Comment by Jack Merr -

  24. Mark, I think Google bought attention. They purchased eyeballs. I don’t think they have a really solid plan on what to do with those eyeballs, much less how to keep them. Right now, owning eyeballs on the web has a perceived value – a high one.

    Look at all the “Web 2.0” companies that have launched recently – a lot of them to huge press. How many are profitable? How many even know HOW to become profitable? Google CANNOT support every new startup on ad revenue alone.

    Even Riya, one of the most publicized new “Web 2.0” companies recently admitted they didn’t have a realistic business model – fortunately they have some real technology and could relaunch themselves as – where there exists a real revenue model (unknown if it will be realized or not).

    In a lot of ways the business models of late 90’s companies are more sound than many of the business models we see today – today everything seems to be “free”, and I don’t care how cheap computers and bandwidth are – it’s hard to build a business on something you are providing “for free”.


    Comment by Rob La Gesse -

  25. Actually, I’m still having a hard time understanding how a company like YouTube would/will make money. I can see it being a portal for millions of people to view content, which in a sense makes it almost like an online television channel. I can see the purpose in that respect, however, I do believe that Google was the only company crazy enough to take on the YouTube burden. Google is an information hog. They are sucking up every piece of information that they can get and what YouTube has just provided to them is a huge supply of videos of people making fools of themselves. Which goes along with the Google mission of “archiving the world’s information”.

    Comment by Tim Summers -

  26. NY Times did an article about this very thing. Every M+A deal allocates a portion of the price to liabilities, which I assume is put in some sort of escrow or something. Well, the word is, on the YouTube deal, and I mean this comes from sources close to the deal, they allocated about 50% of the acquisition price to settle copyright issues. Part of the reason that Google works for Youtube is that Google can get its army of lawyers to work on the copyrights while it exploits the video ad potential. Youtube keeps on keepin’ on and they get Google help with their copyright hell.

    Comment by Preston -

  27. I think you nailed this Mark. There is no way people will keep coming to youtube for non copyrighted material in the same numbers they do now and there is no way they can recoup the costs of licensing all that material with ad space alone. The question will be, will people be willing to pay for youtube for lisecned material. I think that will depend on alternatives. If youtube’s competitors are sued into oblivion, there is a chance it could work, but there is no chance youtube’s current incarnation can survive

    Also, I dj’ed a party the other day with youtube alone, just to show your nay sayers that youtube as a personal jukebox is completely feasible and easy.

    Comment by superdave -

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