Is it Time for Youtube to Reform ?

Youtube has a huge problem and they have dug a hole so deep they are never going to be able to fix it unless they change their approach to copyright.

There is no reason to discuss further whether or not Youtube or Google Video is elgible for protection from the DMCA. That topic will be decided by the courts. The question now is whether or not using the DMCA is a good business decision.

The fundamental business issue in claiming protection behind the DMCA is that it requires Youtube to not know what videos are on its site. Unless an uploader is copyright owner that has signed a deal with Youtube giving them knowledge of the videos they will be uploading, by law Youtube can’t have any idea what videos are on the site or where.

Think about that for a minute.
How hard is it to sell advertising around content when you have no idea what the content is ? Its impossible. Its like selling advertisers a lottery ticket , and we all know how good an investment a lottery ticket is for the ticket buyer. For some reason the media seems to think that there isn’t advertising on Youtube because of advertisers fear of User Generated Content. Thats not it. Volume impressions are still sellable. As is volume video. There is a huge market for mass video. Unfortunately for Google, they take a huge risk of liability from the DMCA in generating revenue next to copyrighted materials they don’t have permission for. So to play it safe , they don’t sell advertising around videos they don’t have licenses for.

So what is happening amounts to Google basically subsidizing the hosting of video for the entire internet. Fortunately for Google, they are probably the only company that could afford to lose that much money a year which has to run into the 100s of millions of dollars per year at this point.

Unfortunately for Google, even with their new attempts to protect copyright, it doesn’t change the particulars of how they have to follow the DMCA and what their advertising sales options are.

Which leads to this question. Should Google start proactively checking uploaded videos for copyright violations and if they did, how would it change Youtube and its relationship with copyright owners, visitors , advertisers and their bottom line ?

It wouldn’t be a technical challenge to review for copyright. It wouldn’t be a financial challenge in hiring and training the thousands it would take to review the videos after all, this process would allow Google to finally know what content they have and sell ads around the videos. And it wouldnt be a difficult evaluation process. A quick smell test would be easy, with any uncertainty being sent to uploader for confirmation of ownership,

Would the number of videos uploaded and allowed fall off a cliff ? Does the take down notice process actually work, which would mean that there is no real net affect on the number of videos available to visitors ? Would users get so upset they would find another site that flaunted the DMCA as a replacement ?

If there is a chance that Google loses any of the many lawsuits and faces Billions in damages, which there is, how big a chance is that and should Google start to cut their losses now by making the change.

Taken as purely a financial decision, I

76 thoughts on “Is it Time for Youtube to Reform ?

  1. Pingback: JakeZim.com » Blog Archive » Highway Robbery and Digital Dumping

  2. Well, all of these comments (Mark\’s and responses) have valid points; all this copyright/DMCA crap is messed up. However, anyone who thinks Google/YouTube is going to be fined in the trillions (what the penalty could be if you calculated it) is high.

    I think these court cases against YouTube will test the DMCA laws (both the penalties and the protections) in the most strenuous ways yet…at least since Grokster. New policies may just result. Does the DMCA protection stand up? Will the new filtering technology prove adequate, either technologically or legally? Etc. Maybe this is just the sort of case the DMCA needs. (A law which, by the way, I think goes too far, along with most copyright law, especially as applied to new technologies/markets or possible fair use exemptions, etc.)

    Comment by Paul Hyland -

  3. Mark Cuban as a american who has profited from all adavantages our Miltary has shedd blood to provide for you. You should be ashamed of yourself for the anti-miltary movie. You are rich because of the rightes our army has defended. I am proud to have served in United states Army in war time to give garabge like you the right of free speech. Mark step up be a man haul your butt to war and see how our troops behave. God will punish you, and all who follow allah wiil thank for your help in trying bring this country down. Don\’t call yourself an American you don\’t deserve to be one. GOD BLESS OUR TROOPS !! TOM JONES 1st Calvary Ho rah

    Comment by Tom Jones -

  4. i believe google cannot impose copyright infringements on publishers/bloggers. this is because they even encourage people to monetize their blogs/websites using videos.

    Comment by jps -

  5. Why do have enough lawyers to pursue this issue? And not enough to pursue industrial pollution cases? There\’s still money there. Billable hours are billable hours…pretty deep, huh?

    Personally, I\’ve found copyrighted YouTube content to be 1) non-complete 2) not top quality and most improtantly 3) free advert and impetus for me to find the original source or some variant thereof (e.g. classic rock bands)

    Comment by Stan -

  6. Seems like a perfect job for Amazon Mechanical Turk

    http://en.wikipedia.org/wiki/Amazon_Mechanical_Turk

    I\’m curious what kind of market there is for a service like that!

    Comment by Gordon R. Vaughan -

  7. Advertising is more powerful than most people are willing to admit. In fact, \”Product placement\” was in the movies Years before the public was seduced by cigarettes.

    Think Fashion. But to whittle it down; all marketing is designed to manipulate the consumer to buy a mind-set. That\’s it. We actually need very little. But Americans are a culture of \”Getting\” not \”Having.\” Which renders the \”haves\” and the \”have nots\” point, somewhat moot.

    The solution? Don\’t buy.

    Toodles.

    Comment by Bonnie Russell -

  8. Everyday there seems to be more news about YouTube and Google. I personally think that YouTube as reached somewhat of a plateau. The content is great but the UI is only as good as it can be. Thats why my company created Cyndi.

    Cyndi is a media player that serves YouTube content directly to a users desktop. So if your running the Windows Vista Sidebar, Google Desktop Sidebar, or the Apple Dashboard you can get your favorite videos while you continue your normal web browsing… instead of being stuck on a single website!

    Cyndi is the future of YouTube. Its a great way to access internet video, and it really enhances the video for the user. Learn more at http://www.neucastmedia.com/

    Thanks Mark!

    Comment by Robert Lawson -

  9. Youtube will make money based simply on the sheer number of hits. No question about it.

    And when I think of lawsuits I think about how much damage is youtube doing to these copyrighted works? Not much really. It\’s not like illegal downloading or anything and it is user generated. Google doesn\’t put those videos up there.

    Youtube is just a vehicle. If you are going to sue anybody it would have to be the people uploading the copyrighted material. And good luck doing that.

    Comment by Asset Protection -

  10. I\’ve been telling my friends that Barea is lights out, and they didn\’t believe me. I watched him play during the summer league and was impressed by his skill level.

    The Mavs have a deeper bench that most people realized!

    Comment by Daniel -

  11. Nice content. I\’ve read it without blinking🙂 Keep up the good work.

    Comment by Bostan Octavian -

  12. Mr. Cuban, Please trade Dirk for Kobe! No real Mavs fans will be mad if that\’s what you are worried about. This is why you should get him. Kobe: plays outstanding defense, shoots better, is clutch, better overall scorer, fit better into our offense, best player in the NBA, extremely hard worker. Dirk: can\’t rebound, doesn\’t play defense, 7ft tall and doesn\’t block shots, falls down too much, chokes in playoffs, doesn\’t fit in with our team. Sell high buy low. You of all people understand that i\’m sure. Dirk, the MVP, is at the top of his stock right now. Kobe, that \”bad teamate\” (who blames him he just wants to win) could be bought at a very low price for what he\’s worth. Dirk for Kobe would be the all time greatest steal. This would be even better than the Patriots aquiring Randy Moss (same situation as Kobe exactly! Slightly weird guy, but his determination/talent/intelligence is unmatched) for a measily 4th round pick. I could write an essay on this matter, but I do enough of that for my college. Please strongly consider Dirk for Kobe and maybe some draft picks. Thanks for your time

    Comment by Clinton -

  13. Look at it from the end users POV:

    1) Last thing they could give a crap about is ads. They dont want them and could care less whether Google (or any other social media site) cant figure out how to recoup lost ad revenue.

    2) It\’s about a new generation raised to think they can download and copy anything they want for free. That napster mindset fuels the copyright infringment problem. (Comment #60 is interesting and seems to make a lot of sense about where things are going.)

    If not YouTube, they\’ll go somewhere else. Why? Because they always do. Whoever said Hulu, sorry, already hacked. People will ALWAYS find a way to game the system because the mindset now is so prevalent and the tech to do so is everywhere.

    Change the mindset to make progress.

    3) To that end, money talks: Instead of Google, Facebook, etc, making gajillions off the collective volume of their registered users, make them partners similar to AdSense, but for removing clips. Legit material stays with ads in place but now also pay people to hunt down violations and remove them. With the 20 trillion clips already there, people will be busy for a long time.

    Comment by bg -

  14. As far as it is not concerned to be the official musicvideos I don\’t have a problem with that. Respect the copyright but face it, we are in the 21st century and we have to accept changes in any businessmarket aswell.

    gr,
    Peter

    Comment by Clickbank Video Infomercials -

  15. I\’ve been reading Mark\’s blog for a while, now its my first comment, on this very interesting subject, the convergence of the internet video services, like utube, and the entertainment industry. BTW, I normally keep my opinons to myself, mainly because I hate typing into these little boxes.

    Readin those others comments, there seems to be a concern about the long term viability of the utube/google business model. To me, it looks like its morphing into something much more exciting. So, I think in this round utube will take a few hits about with a stick, but will remain relatively unscathed.

    To recap, utube\’s business model is based on the deriving revenue from the sale of banner space and PPC generated by views of \’user\’ uploaded videos, where much of it contains some form of content infringing on copyrights. There are multiple law suites, both class action and individual, that have been or in in process of being filed against utube. — Understandable…

    Whether utube survives the onslaught of litigation is not an issue, Im fully convinced it will survive in some form and be forced pay out a small portion of their collected revenues to cover the costs of litigation, damages and back royalty payments. Why a small portion ? Because, there is precedence in the entertainment industry for significantly discounting content license fees for lower quality content. For example, MP3s are licensed at a reduced scale in comparison to the gold standard WAV (CD) format. What do you think the awful quality of content presented on utube will bring in terms of compensation?

    Getting past the hubbub about legal actions, this is where utube gets interesting utube is really a catalyst that is propelling the entertainment industry into a new, well old, revenue model. Utube, sony and some others have reached revenue share agreements on advertizing income. This is very similar to a short lived broadcast revenue model from the early sixties, before networks realized they held the keys to the kingdom and were in the position of controlling programming and market revenues.

    Now why will companies like Sony agree to revenue sharing terms ? Well because they are desperate for revenue. CD sales are dropping nearly 20% annually now, digital sales have not replaced the decline in CD retail revenue, management teams are under pressure to bolster sales and maybe there\’s some concern heads will soon start to roll. So, why make the revenue sharing deal while content is being infringed ?? Because some money is better than a bunch of legal fees. But, don\’t get comfortable, the entertainment companies are not out of the woods on this deal, especially record companies. Its yet to be seen how they are going to reconcile artist payments which are based on unit sales not derived from shared ad revenue generated through viewing infringed content

    Back to utube/google.
    Utube is on the door step a significant opportunity and theyve started taking the first step over the threshold by putting their first revenue sharing agreements in place. Utube, and others like it, have the potential to be the next generation media channels. They will soon send revenues of traditional media, like cable, radio, and movie theaters, spiraling downward by drawing viewership and attendance away.

    The core reason — the mobile generation values the idea/story behind the content and they value ability to use it on demand from anywhere. Its all about availability over quality !!!! Its almost like the garage band version of video content warts and all. Drawing an example from past, how much audiophile quality music was listened to over AM radios (for those of us that remeber AM radios) ?? Some complained about the quality, but majority of us just listened and enjoyed.

    A side note: Helping this trend along for video is the mobile communications industry. I love these guys. They have single handedly reset the quality expectations for consumers. 15 years ago, if your phone dropped calls every hour, we would call the service crap, and file complaints non-stop to the phone company and the FCC. But not for cell phones… We call and complain about dropped calls, then we\’re told we should be happy it work this well. Uhh?? Were unhappy but live with it. Now, we expect calls to drop on a regular basis. Brilliant !!! The same is true for video content, 240×320 resolution, 15 frames per second a 2×3 screen and we pay $5.99 per movie. Really, mobile carriers convinced us to pay a premium for inferior quality content. For the mobile generation this level of quality is acceptable and expected. And, its only a matter of time before we connect our cell phones to a TV via wifi to watch what ever we want. I wonder how many dropped shows we\’ll see.

    One more side note: Mobile video and utube is just one more nail in the coffin for independent movie theaters. The day of the small independent theaters is coming to a close, not because they cant scale or because people sit home and watch DVDs, because the middle management lacks the vision and understanding of how online media can help them and eventually hurt them. They keep their heads deep in the sand, continue to employ unknown failed marketing programs and expect sucessful results. Its time for independent theaters to expand their horizons past the concession stands !! Anyone listening ???

    A very similar scenario occurred in the music industry in 2000, record company management heard of the internet, but they didnt understand what it was and wasnt interested in understanding what it was or the impact it could have and would have on their business. Managements ignorance and arrogance let the internet, a valuable distribution channel, get away from them. Then they blamed file shares and others for their short sightedness and incompetence.

    Entertainment industry groups continue to prosecute (exploit) people that cant defend themselves, like the RIAA suing a poor, single moms with no internet connection for file sharing. Others are arresting girl for trying to show her brother a cool scene from a movie. Am I the only one that finds this exploitive ?

    Back to utube/google again.
    So, is utube in hot water, sure for a little while. Will their business model change?? Sure, it already is. And, in google fashion, changing the worlds entertainment revenue models. Will utube survive the numerous individual and class action law suites ? Yup, even it they have to hand out google stock, they\’ll come out smelling like roses.

    Illegal use of others copyrighted content to generate a purchase of over $1B, the lawyers are now chasing utube/google ?

    I think universal\’s legal action is a preemptive strike against potential competition to GE/Vivendi\’s broadcast holding than anything else.

    Comment by xfer_rdy -

  16. Nice to see you back, stirring it up in the business world.

    Comment by Bob Wegener -

  17. Im 26 years old, what do I knowother then I think there will have to be a huge overhaul of the DMCA, copyright rules, and marketing/advertising in general. The paradigm shift (sorry for the cheesey buzzword) started with Napster and will continue to spiral out of control. Did it start with Napster? Actually, I think it started with a dream of Bill Gates, wanting to have a PC in everyones household. Copyright rules will have to be changed, charging a young mother of three in Brainard,MN with copyright infringement will do nothing. The $250,000 she was charged or the billions of dollars Yahoo will be charged will change nothing. There will ALWAYS be other avenues for consumers to get what they want, with or without companies trying to capitalize on advertising opportunities. Especially with the tech savvy younger generation spearheading this revolution. How are people going to make money off of this? I think there will have to be an alternate route to advertising and subscriptions or just clever advertising.

    I think business who want to advertise, music companies that want to sell and artists who want to be successful and make lots of money will have to actually start working harder and start being a bit more creative, what worked 15 years ago is not as effective now and will not work in another 10 years. Advertisers will have to suck it up and use this video streaming as a way to market their products. For example, Halloween, I saw so many costumes that where a huge hit that where taken from Youtube (for example Barcardi and Coke costumes, Dick in the Box (which we all know that NO ONE really watches SNL, anymore)I do have to say I did have my share of Bacardi and Cokes that night see it works!

    I know Im not preaching anything new, Im not bringing up any new points, but a 26 year old with a marketing background and accounting career can see this and can see that a lot of people are going no where fast. My advice would be, embrace this as an awesome opportunity for something entirely new, a new cognitive way of thinking, a new way of promoting ones business, ones products, ones self.

    Mark, you know first hand that many people dont RTFM (read the f* manual). This is the time that you have to put down the manual and create a whole new one, and hope that no one reads it and you can once again profit off change. (or I might beat you to the punch, hopefully a Bacardi and Coke type of a punch!!)

    Comment by cherrymn -

  18. Nothing to do with YouTube:

    Man, oh Man, All this Kobe Bryant Talk

    \”I don\’t think there\’s anything sinister going on here. I think Cuban is being a good owner by expressing the utmost confidence in the roster Dallas will most likely have. (And rightly so — they\’re good! Ask the Cavaliers.) I just question that \”we haven\’t talked to them\” line. If that\’s true, that would bother me as a Mavericks fan. They\’re holding a sale on Kobe Bryants right now. Pick up the phone, if you haven\’t already.\”

    One can only dream of having Kobe in a Mav\’s Uniform

    Comment by DTX -

  19. Well, they don\’t have to know anything about the content of the videos at all! In reality, alll they really need to know is statistically which one is viewed more often than others and sell advertising accordingly. Statistics don\’t accept or reject content, it just delivers number to bean counter whom can use it to sell ads! LOL!

    Comment by Mitchell -

  20. I\’d agree that the same happened to Napster and Audiogalaxy at the height of the music downloading craze in the late 90\’s to early 2000\’s.

    In terms of the failure, you\’re right. The business model has to change. As a student of advertising, its easy to see why advertisers would balk at throwing money at Youtube. If we didn\’t know what sport was being played on SuperBowl Sunday (anything from football to curling), i\’m sure advertisers would think twice before dropping a few hundred thousand on one 30 second spot.

    Now could Youtube be the next Friendster? Friendster had the advantage initially, but then failed to adjust to the changing market. It looks like the iTunes store has eaten into google\’s shares with licensed material (as have network TV sites, streaming their own content online).

    Great topic!

    Comment by Piotr Jakubowski -

  21. Mark,
    Everyone on your blog is so nice to you. I do like what you have to say. But give your readers some meat to eat, not this milk you have been giving us. Lead and they will follow.
    Peace….Iron Mike

    Comment by Iron Mike -

  22. Its not a big deal now, but it will be soon.

    The reason YouTube and Google have not been tagged real hard yet is because the quality is just not there. Most if not all of the videos are second generation quality, if not worse.

    Now say I was smart enough to invent technology that would allow me to broadcast streaming digital movie clips and television shows – HD4U, and that was available for anyone to upload at no charge to them. How quick you think the first lawsuit would land at my doorstep?

    Once someone comes up with the way to do it, these companies will be all over them like they did Napster.

    d

    Comment by dan -

  23. Why is it OK for YouTube, an American-owned company, to profit from copyrighted materials through the sale of advertising and not OK for Russian-based allofmp3.com to profit from copyrighted materials. allofmp3 was more blatent – yes. But nuance should not be lost on smart people – youtube is \”inadvertently\” doing the same thing.

    I think the issue comes down to power – not the law, or business. US companies had the power and the will to ask the US government to ask the World Trade Organization to create a bargaining chip out of Russia\’s desire to be accepted into the WTO. If YouTube was a Russian company it would be shut down by US interests. As allofmp3 was not US – it was shut down.

    Mark is right to have sour grapes about the illegal business practices of YouTube. They are out of line. However they are out of line in the \”right\” country. If we learn from history this abuse of power is typical – it is why the US economy will likely not recover from its behavior over the last 50 years. Doing business in such a corrupt environment is hard to swallow.

    Comment by Jake -

  24. Since this topic was posted by Mark, I found this amazing discussion in our archives (Sorry for the shameless plug :)).

    http://fora.tv/2007/10/23/Viacom_versus_YouTube_Google_Case

    Mark and anyone else that is interested, its called \”The Viacom versus YouTube (Google) Case\” It\’s a panel of discussion on possible implications for significant issues raised by this litigation on DMCA Section 512.

    Comment by William -

  25. I haven\’t read the rest of the comments on this post, so I apologize if I\’m going to be modded -1 Redundant.

    But anytime I hear about the viability of advertising in regards to direct content, my interest wanes. That\’s not where the value is, silly! Do you think amazon and netflix make user-taylored recommendations based on content? Think they keep a database of actors, directors, genres, and other quantifiable facts, crunch the numbers, and push them to users? Nope.

    The value is in the sheer numbers of users. Everyone has a variety of interests, and they cross categories like no one\’s business. Amazon, Netflix, and Youtube know what certain users like and their ability to compare users stats against one another is how they are able to make good use of data. This much is obvious…you\’ll have to contact me if you want more info😉

    Comment by Anton -

  26. I\’ve always had issues with the fact that one guy controls what goes on YouTube\’s front page. Yes, he\’s a former user who emailed them those suggestions early on, but a Q-factor model based on one man\’s opinion is dangerous. IMHO.

    Comment by Jason Falls -

  27. i\’m sure google working hard with content detection solutions to get more details what about video and what the traffic will be around. youtube 2.0 is coming up next couple years.

    Comment by Chango -

  28. I think that someone has allready mentioned that google would serve ads around the tags related to the video and not the content of the video itself.
    I belive that the best possible solution would be revenue sharing with the copyright holder, however that would be nearly immpossible to implement.
    I don\’t think there\’s goin to be an easy solution to this.

    Comment by Real Estate Contract -

  29. If any of you readers are familiar with the music industry, there was a company called BurnLounge that was gaining a lot of exposure about a year ago. The idea of BurnLounge was that it was an online music store, similar to iTunes, but each \”individual business owner\” ran the store, and chose the content.

    BurnLounge had licenses with the Big4 music companies (Universal, WarnerBros., SonyBMG, and EMI., and was able to distribute licensed copies of each track to individual users, and at the same time, distribute a portion of the royalties back to the independent business owners.

    It\’d be wise of YouTube to seek blanket licenses with music and television production companies. This way, they could sell advertising to be placed on each page regardless if the videos were copyrighted or not.

    Comment by Norris -

  30. Mark, we missed you on Dancing with the Stars – but you can know that we will be rooting for the Mavs tomorrow nite. We love you and the Team.

    Comment by Eloise & John Leggiero -

  31. Interesting post. When Google purchased YouTube for 1.65 billion they purchased not only the rights to sell advertising on the site but all the liabilities (including copyright infringement). This is the risk you take when you purchase any company. When you purchased the Mavericks you purchased all the risks associated with the company. If someone was to sue the Mavericks due to a incident that occurred before you took ownership. The way I understand the law you are still liable. Google may get hosed on this deal, but they new the risk before they bought YouTube. They will likely never pay anything anyway. Look at Exxon, they are still fighting over the punitive damages from the 1989 Valdez oil spill.

    Comment by Brett -

  32. Great timing. I just finished up on watching a bunch of highlight clips from some recent football games being hosted on YouTube which are posted on multiple blogs across the country. I was wondering how the NFL does not even care when they care so much about casinos advertising \”The Big Game\”.

    If questionable copyright infringement was enforced (and I certainly do not see how it could not be considering the resources available) I think it would only up the creativity and perhaps make YouTube even better. The most widely watched YouTube videos are the original ones and the majority of the questionable copyright infringement are just cluttering the service anyways.

    Comment by Chicago real estate agent -

  33. The surprise is that anyone ever thought the YouTube business model was something to aspire to. Sure, I want to blow 4 million plus in dollars each quarter on bandwidth with no justification or possible idea on how to monetize. Sure, I want a site with the traffic they have… but then again, I could take a bag full of cash and throw it off of the top 10 highest buildings in the US and instantly have a fan base wanting more. I could then add advertising to the buildings prior to throwing the money from the roof and call it a business model. I\’d even fold the money to make it look technical and hard to replicate. Enabling users to utilize free bandwidth as a method of increasing eyeballs is interesting only to the investment community that is frothing these days be large sets of captive eyeballs. Then the brains of these companies take their money and run leaving the final suitors with nothing and the investors are continually spoon fed press releases in a desperate attempt to make it seem like the cost was justified. In this case I don\’t blame Google as much as I blame the media. When a purchase like this does take place they fawn over it so much that it actually does justify the purchase in the bump up of Google stock value. Yet this is only short lived and all logical business sense is thrown out the window… that is one of the keystones of why we had a bubble bursting in this industry in 2001. All business and logic were thrown out the window and replaced with pure greed and business models that were laughable.

    Comment by Nils Lahr -

  34. Google is profiting off of this BS copyright theft… it\’s working. I hope they get a huge lawsuit over this o.O.

    Comment by Hi5 Codes -

  35. Hey Mark, I just found out that you will be at BlogWorld and New Media Expo in Las Vegas next week. I\’m really excited to hear that and I hope I get a chance to meet you.

    Maybe youtube can create a system where they will search videos with only 100,000 views or more. This could cut most of the videos they would need to review in half.

    Comment by Prija Phaphouampheng -

  36. Google should be able to sell ads based on views, just like page views but only video views. Google could offer different tiers of advertising levels. Level 1 would be ads being displayed with watched videos over 10000 views. Level 2 5000, Level 3 1000… Or offer a package with different levels in it to people. This way, Google still wouldn\’t know their content, but could sell ads around their bandwidth usage.

    Comment by Matt Wilson -

  37. If Youtube lost non-copyrighted videos, that would leave about 10% of their videos. Every video of note on the site is a scene from a TV Show or Movie, a Music Video, or a sporting event. They would die without those videos.

    Comment by Hubsess - Google -

  38. Isn\’t Google\’s mission to organize the world\’s information and make it universally accessible and useful – what you are proposing fits squarely within that mission and, as you suggest, allow them to better sell ads around such content.

    Comment by Neil Sandhu -

  39. http://blog.wired.com/business/2007/10/hulu-launches-w.html

    HULU.. The You Tube killer..

    Comment by Pat Crofoot -

  40. What you, and Google, don\’t seem to understand is, it was copyright violation that made Youtube great.

    The guys who set it up both violated everyone\’s copyright AND built up huge bandwidth bills, all the while gambling someone would buy the company. This gamble worked. Now Google is stuck. They must neuter the mighty stallion they paid premium coin for.

    Comment by Terry Smith -

  41. Come on, Don\’t think for one second you -tube is not worth it\’s weight in gold. They don\’t have to do anything they built a fortress. They can change , hire thousand and make more money or they can sell for a fortune like Mark did.

    Comment by Iron Mike -

  42. Mark,
    If you were Mr Google or Mr YouTube, what would you do?

    Comment by Guillermo -

  43. While I understand the copyright issue; I have zero sympathy for the advertising issue. I am one user who is more than sick to death of having advertising stuffed down my throat, whether I like it or not, with more and more relentlessness.

    I used to work in the publishing industry; I understand what goes on to circumvent email filters, do not call ists, etc. Can\’t we just enjoy something, without someone trying to sell us their product? I just started using Gmail, and am dismayed to see that it scans my open email, in order to offer me targeted advertising. That\’s creepy. Is it storing my private messages somewhere? I don\’t doubt it for a minute. Somebody, somewhere, reading my mail. I don\’t like that.

    Where does all of this end? I know a lot of people (myself included) who keep a list of the url\’s etc. of the most obnoxious advertisers we encounter, and make sure we do NO business with them. It\’s that bad.

    You can\’t by stemware from a certain well known brand, without providing all kinds of demographic information, as part of your checkout experience. If you try to bypass the unnecessary nonsense, just to make your purchase, you get an error message. Obnoxious. I left the site, without making what would have been a substantial order.

    I\’d like to see something on the internet that doesn\’t distract me to the limit.

    Comment by Susan Lewis -

  44. Youtube is putting in filters to try to block copyrighted content. Nice thought, but its not going to work well. If they manage to block all copyrighted content, they will lose the majority of their audience. In order to work, though, theyre going to have to have cooperation from all the major media companies, and thats going to be tricky, too. Worse, adding stuff to the signal to try to keep it from being uploaded will undoubtedly degrade the signal, just as Macrovision does to VHS and DVD in the current marketplace, and its just as certain the uploaders will find a way to strip the filter from the signal eventually anyway.

    Comment by Penza -

  45. Newspapers don\’t have to filter content to prevent some fool from using copyrighted material in ad copy, and neither do radio or TV stations. They push all that risk off, by contract, to the fool that included the unauthorized material in their submision. When the fool\’s ad get published or transmitted, and the copyright owner complains, the paper or station pulls out that contract with all its disclaimers and indemnities.
    Why then can\’t YouTube have a more one-sided, self-protective user agreement. It now reads like some High School notice about what conduct \’will not be tolerated\’ at the prom.
    If some fool puts my copyrighted content on YouTube, then all I want them to do is take it down, and give me the fool\’s name and address. That\’d be a sustainable business model. Managing and avoiding risk is key to business success. Instead, YouTube and internet sites reject takedown notices, refuse assistance, and act like the identity of the real infringers is some sort of top secret information. If Web 2.0 intend to be the new broadcast \”networks,\” then they might take a few business school lessons from the old guard -about assuming and avoiding risk.

    Comment by Thomason -

  46. Well, let me play devils advocate. Is it not possible for Google to use text descriptions, meta tags, etc. to place ads. Thus, they might be able to legitimately claim that they do not know when copyrighted material is posted. Thing is, if they go down the road of reviewing material, THEN their liability kicks in. They\’re between a rock and a hard place. Plausible denial seems better then admitting you let things slip.

    Comment by Rob Thrasher -

  47. I really don\’t think that You tube can survive, There are too many issues with copyright and videos. I personally don\’t think that financially it is a great investment even if they make changes.

    Comment by Laura Elston -

  48. Google\’s recent efforts with Video Id is not going to be embraced by publishers. Google is essentially asking publishers to build their video index for free. Plus, it sets the precedent that the media companies need to provide their content to all the video hosting sites as they engage in a frustrating game of whack-a-mole.

    Here\’s what needs to happen for the content economy to thrive

    1)An independent player needs to emerge that provides publishers with web-wide visibility over content re-use

    2)With visibility, the media companies can and will let their content free, sometimes with restrictions like it must be wrapped with a particular set of ads – in other cases they may just want a 20% rev share or a link to protect their search engine rank.

    There are already a handful of companies trying to do a subset of the above – http://www.attributor.com (where I work), http://www.vobile.com and http://www.audiblemagic.com.

    Comment by Rich Pearson -

  49. We saw the case of a young woman that was arrested for video taping a clip on her phone inside a movie theater in Arlington, Virginia. She said just recorded a couple of minutes to show her brother at home, nevertheless she was still booked and I believe awaiting trial.

    Which leads me to what Dan Dodge said at the end of his post. Apparently, even if a there\’s only a few minutes of a copyrighted material that\’s enough to charge you. Excessive these penalties certainly are, as I strongly feel no one should be arrested for recording a clip on a phone.

    But ten minutes, on a degraded \”web\” version, does that not constitute fair use? I don\’t know. Tracks on a CD aren\’t more than three or so minute so perhaps it does, or doesn\’t.

    The concept of fair use has to be standardized one way or another, but with a Congress that jumps hoops for RIAA and the MPAA, I feel it\’s going to take a very long time before that gets sorted out.

    It\’s vitally important that this gets sorted out, as some study currently referenced in wikkepedia, has found that fair us \”… dependent industries are directly responsible for more than 18% of U.S. economic growth and nearly 11 million American jobs.\”

    Do we really want things like the DCMA to narrow fair use? Our legislators better think about that …twice.

    Perhaps YouTube, with Google\’s money, may be our best chance yet to push back on the DCMA.

    Comment by Website Analyst in DC -

  50. One more thought. In my pursuits in the music industry, for us to copyright any of our material, we must put it all on a physical CD and mail it to Wash., DC. What do you think about the Government allowing you to upload digital music, video and picture to a site they could create as opposed to having to mail in physical copies, which I\’m sure must be stored in some type of space-eating manner

    Comment by Dan Meyers -

  51. To Mark and anybody else who is listenening. What about this option? What if a digital media database was formed, and anybody wishing to copyright their content, simply uploads it to the database, kind of a new millenium version of mailing your intellectual property to the Library of Congress. This database could be run by the Government, or privately. Then sites like YouTube, could develop an algorithm to automatically check all uploaded material to see if it is registered in the copyright database. Please let me know what you guys think about the idea.

    PS. I\’m from Pittsburgh and was a busboy at Kazansky\’s (The Old Rhoda\’s) on Murray Ave. I heard that was your spot.

    Comment by Dan Meyers -

  52. Wait, I think you\’re mistaken in a couple of points.

    Google AdSense has been selling ad space next to content that it doesn\’t really \”know\” about for years. Anyone can sign up for an account, create a page, and stick some Google ads next it. Google\’s AdSense servers index the page, their algorithms make a best guess, then start serving ads. Based on performance, they either keep them there, or they rotate them out until they find a set that seems to do the best.

    It doesn\’t actually \”know\” for sure, what your content is on your page, or whether or not you own the copyrights to that content. Sure, these ads aren\’t \”quality\” agency ads, but quantity it does have, and that\’s one aspect of the web… you got to have quality and you have got to have quantity, preferably both if you have want to make generate revenue online.

    Sure, it attempts to police some of it, but it\’s mostly interested in click-fraud as it\’s probably overwhelmed by it.

    It\’s only been more recently anyway, with the online video generating becoming technically feasible that anyone has to started to complain about it. Scanning for copywright violations on video is significantly more complicated than scan ng text with a list of keywords/phrases to avoid, probably by several orders of magnitude.

    Look, you can train a thousand people to watch videos all day and decide which are fair use and on the fence, from those that are copyright violations… and they will no doubt miss plenty becuase no single person can just \”know\” every tune copyrighted.

    Even if you could send back questionable videos to owners to have them prove their ownership, how the heck would do that? Video tape themselves writing score out of a video short??

    I think the DCMA is woefully inadequate in general, written up by folks that never understood the complexities of the technologies that have helped create such a frictionless distribution of content.

    Comment by Website Analyst in DC -

  53. YouTube is so large it\’s become like the Titanic and unable to keep from crashing into the iceberg of endless litigation.

    Maybe internet video would be best served by many competing media platforms instead of one huge conglomerate site. There are already tons of great places already like Ebaums, CollegeHumor, Break, and others. Smaller sites can focus more on making sure the content loaded isn\’t ripping off someone and that it\’s actually an original submission.

    Then again, this YouTube business reminds me of how the music industry is trying to stop people from downloading free tunes. I don\’t think you can prevent people from taking (or uploading) something for free, especially not when millions are doing it on a daily basis.

    Comment by Max Bro -

  54. I suspect that many of the copyrighted clips hosted by YouTube (and others) may actually generate more revenue for the copyright holders. For example, one individual may not watch The Office; however, due to a 90 second copyrighted \”viral\” clip from The Office (hosted on YouTube), this individual might actually become a new and loyal fan.

    Comment by nolan -

  55. How hard is it to sell advertising around content when you have no idea what the content is?

    I believe this premise is incorrect. Perhaps you haven\’t watched TV recently, companies basically throw money away on advertising that is idiotic, sometimes barely related to the product, never leaves you wanting to buy the product in question. I mean, does John Cougar Mellencamp make you want to buy a truck? Haha of course not. Advertisers spend their advertising budget, wisely or unwisely. So basically every company that wishes to advertise on the internet but isnt concerned with copyrighted material, will continue to do so. I mean, if McDonalds wants to advertise on Youtube, what do they care if other company\’s copyrights are being infringed upon? The advertising dollars will still be there.

    Comment by Joe -

  56. Would users get so upset they would find another site that flaunted the DMCA as a replacement ?

    Yes. All this legal crap going on in the courts has no bearing on anything for the end user. As we\’ve seen in the past for example when Napster went down, there was still a huge and rising demand for content. Something will always fill that demand. So the legal crap is a big deal for Google and Youtube and Napster. But the actual real effect it has on availability of content its null. Or maybe even a positive effect for the user as it ushers in the next generation of piracy which has always been bigger and better. As as end user I could care less what happens to Youtube or Google specifically. My interest is keeping the content available somewhere that it is easy to look up and view on demand.

    The real threat to the piracy that goes on with GoogleVideo and Youtube is good content like that of ComedyCentral and NFL.com where they have actually made available a better alternative to Youtube et al. Even if there were no takedowns at Youtube I would still prefer to watch the content at Comedycentral. Its better quality, easily searchable, and its ALL THERE.

    NBA.com should take a good look at the NFL.com site. NFL.com video blows away anything NFL related you might hope to see on youtube. NBA.com looks like they just don\’t want to put the energy into great video content on their website or they just don\’t have good producers. (maybe they should give NFL films a call for advice).

    Comment by Jeff -

  57. YouTube is popular but can it make money as it is? If traffic falls off, so do impressions, so does possible revenue.

    Comment by BlogKast -

  58. Usually I find Mark\’s comments on technology and media to be insightful, but in this case I strongly disagree with both the premise and conclusion.

    The main flaw in the argument is the assertion that validating copyright would be easy, or even doable. Nevermind hiring and training thousands of people. You\’d need to hire and train thousands of people in practically every country in the world. How is some guy in the SF bay area going to check the copyright status of a video from, say, Nairobi, feautring people he doesn\’t know speaking a language he doesn\’t understand?

    It\’s just not possible to proactively screen that much content — at least with any kind of accuracy rate. And, of course, even if you successfully verify that several million videos are legit, the *one* that you miss could cost many millions of dollars in court. And throwing away the DMCA protection suddenly doesn\’t look so smart when you consider the volume of content on YouTube and what a realistic accuracy rate would be (99.999% would be ruinously bad).

    So yeah, YouTube\’s business model is flawed. Playing in the increasingly insane copyrighted content area is hugely dangerous undertaking. But trying to validate every uploaded video simply isn\’t possible, *no matter how much money and how many people you throw at it*.

    Comment by Brooks -

  59. Nice conclusion: \”Taken as purely a financial decision, I\”.

    Either you need some protein (30 pounds is a lot to lose in a couple of months!) or you have a degree, with honors from the University of \”Always Leave Them Wanting More\”.

    Note to Don Dodge: please stop hammering yourself over your Napster past! This is nothing like Napster for one big reason: what is motivating the fear? I\’m not saying the fear is valid, but it\’s certainly understandable. With Napster/Bit Torrent etc., the fear is all around something actually killing sales. Whether it be album sales or DVD sales.

    Nobody is worried that YouTube is causing a hit to Boston Legal DVD sales. It\’s just angst over this notion: \”hey, THOSE GOOGLE @^!^@%$ are making advertising money on our 1.5 minute clip from 30 Rock. That ain\’t right!!\”

    Should Google be allowed to do that without actually sharing ad revenue with NBC? It is a very, very interesting question. As is: what *exactly* is \”Fair Use\” in the digital age.

    All I know is that when trying to find the clip on YouTube of Alec Baldwin doing impersonations on this past Thursday\’s episode of 30 Rock I saw this message a lot: This video is no longer available due to a copyright claim by NBC Universal.

    But it\’s still available (and worth the look) at (and in this case Gawker is getting the ad revenue — is that OK?):

    http://gawker.com/news/acting!/did-alec-baldwin-just-finally-win-an-emmy-315536.php?autoplay=true

    Comment by Robert Seidman -

  60. The Abyss of content….just like half the refs gambling within the NBA….who you gonna call Ghostbusters?

    Comment by Mary -

  61. I\’ve never watched a copyrighted video on YouTube. YouTube\’s popularity is with all of the hilarious user generated videos. If they added a few \”mark as copyrighted\” buttons next to videos and put up a more threatening warning this would all be fixed.

    Comment by pressurewashers -

  62. I was enjoying you on Dancing With the Stars, but it\’s nice to see you back to what you do best!

    Enjoy!

    Comment by hellboy726 -

  63. This topic again?

    Look it will never happen, plus how is google supposed to know what is a commercial piece of material and what is personal? As far as I know putting a U2 video in a home movie is not illegal, but once you start monetizing around it is when it becomes illegal.

    There\’s simply not enough man power to enforce it and so far the networks haven\’t stopped it so I really don\’t see them winning this battle.

    Does it suck for the small artist or musician? Maybe. Maybe not. It gives them exposure. What more can they ask for? Does the average person still go on iTunes and buy the same song they saw in crappy quality on youtube? Of course they do. Apple wouldn\’t be kicking the shit out of the other companies if everyone was just pirating.

    Again, trying to shut it down will never work. Maybe some high court eventually agrees with the networks and puts a judgment on youtube. The very next day everyone will move onto another site and anyways… Google has the money to be able to fight for a very long time.

    Bryan

    Comment by Bryan Hauer | News Blog -

  64. The problem Google has is that, if they follow your policy, then basically all of YouTube\’s content gets taken down and there\’s only a trickle of new content that\’s allowed back up. That\’s a sure path to the death of the site. Better to take an only maybe path to disaster than a sure one, I imagine. Besides, it\’s not clear to me that your solution actually provides a legal defense: my understanding of the safe harbor provisions is that, once Google starts editing for rights, they need to be working with 100% accuracy to avoid lawsuits. That won\’t be easy; innocent mistakes are bound to happen, and that will translate into substantial awards.

    Anyway, if you look at what they\’re doing, with the special accounts you can get on YouTube now, allowing more uploads, etc., they\’re essentially creating a copyright-vetted, feature-rich, monetizable first-class area; as more content goes up from these users, it\’ll be easier and easier to ghettoize the non-vetted content, until the low-end is only good enough for people who want to share their pet videos.

    Comment by Wade Armstrong -

  65. Congratulations goes out to Mark! Genarlow Wilson was released today. You had a major impact on that situation! THANKS for helping out fellow US citizens! That is AWESOME!

    Comment by Scott -

  66. Youtube is/was overvalued. They know they have copyrighted material, yet, they don\’t do an absolute thing about it. Copyright issues will continue to bother them and its only a matter of time that the law catches up to them.

    Comment by WilliamP -

  67. For someone who cashed in on the technology lottery years ago you sure do seem bitter towards those who continue to profit. The one thing we need more of in this world is freedom, and internet outlets like youtube and google video provide a little bit of that. Everytime something comes along for the masses and middle class, people like you are trying to find some angle to profit. Please keep your thoughts and ideas limited to your own companies and give us a break from your envy. No one cares about you and your \”take\”. Its like listening to a doctor discuss what he knows about the brain, NOTHING!

    Comment by jeff -

  68. Youtube knows it has copyrighted video and they won\’t do anything because they damn well know that it drives traffic to the site. They want to you believe that its this video \”communitiy\” with 100% homemade video.

    No its not. It is the leading source of video piracy and they KNOW THIS. The site would be vastly different once youtube is forced to remove any copyrighted video. No one will go there because they can\’t find their anime videos or south park clips. They\’ll just go to another site with loose rules.

    Comment by Leon Westbrook -

  69. Mark,

    I was enjoying you on Dancing With the Stars, but it\’s nice to see you back to what you do best!

    Comment by Dan -

  70. It does amaze me though how often traditional media refers to You tube as if they forget that Google is quickly becoming their competition.I guess clips of new shows do help promote them. A good example is King of Queens. Many people I know including myself didn\’t discover it until 2004 and now watch the reruns. It\’s also amazing that Yahoo declined buying Google for under 4 million and underestimated the power of search even though they pioneered it. I am a fan of disruptors and it certainly takes one to know one. Complacent industries do often times need new blood to shake things up and drive innovation. Mr. Cuban I am working on two Television shows and am convinced that one of the two will blow you away. If you are as curious as I imagine and would sign an NDA, you will quickly get how dynamic it will soon become.

    Comment by rebelforacause -

  71. They\’re aleady working on it

    http://seattlepi.nwsource.com/business/335594_youtube16.html

    Comment by mtgentry -

  72. Why is it comical to suggest they don\’t know what they are hosting? Its user generated??

    Google has said they don\’t sell ads based on what the video is, but on how people \”search\” for videos on YouTube. They don\’t sell ads based on what it is, they sell ads based on how people search for videos.

    Why would they invest time and money on \”sniff testing\” or \”analyzing the content.\”

    The DMCA has made it perfectly clear that it is the content holder\’s responsibility to enforce their own copyright. Its not Google\’s job. Unlike Napster, there is quite a bit of actual User Generated Content, and YouTube limits the length of movies to 10 min which is hardly enough to hold a full 30 min television program.

    Comment by Tim H -

  73. Wasn\’t Youtube purchased recently?

    If so, I imagine that the new owner\’s will change it very soon.

    The same happened to Napster.

    Comment by Sean -

  74. You know this is going to be just as effective as the war on Piracy from the Music industry… We do all remember how that\’s going right. It hasn\’t even put a dent in music piracy.

    If anything music companies are becoming a thing of the past.

    I understand Viacom\’s need to fight but I think they fail to see the bigger picture. The content really can\’t be protected in this way. The DMCA defense will hold up in court.

    But let\’s talk Floyd Mayweather vs Ricky Hatton, I got $50,000.oo on Floyd, Mark. I know you had a chance to meet him in person on the dance floor. (which you did an amazing job, making us younger dudes (35) look bad. -my girl now thinks I should be able to take her dancing now.) So what do you say you up for a friendly little wager on the fight. I know 50 thou, probably isn\’t money to you but that\’s as high as I can go.

    Oh and will you be going to the fight live?

    Comment by Mr.Glues -

  75. We had the same problem at Napster, and used the same legal defenses. It didn\’t work. And Napster didn\’t host any music files on our servers. YouTube has the infringing content on their servers. Big difference.

    Napster didn\’t accept advertising or subscription revenue because that would have added more furl to the fire of \”making money off infringing content\”. The plan was to wait until after we had a deal with the labels, and then monetize. If YouTube is selling ads now…more trouble.

    You are correct that YouTube can\’t sell targeted ads if they claim to not know what content is on their servers. Ha…it is comical to claim you don\’t know what is on your own servers.

    Further, how can YouTube provide a good search function if they don\’t know what content is on their servers?

    Viacom is moving ahead with their lawsuit against YouTube. Others will follow. The damages, if they win, will be billions and billions of dollars. The penalty for ONE single infringement on one video is $250,000. YouTube does millions of streams a day/month. The fine would be $25 Billion for just 100,000 streams.

    Copyright law is tough, and the penalties are outrageously out of line with the actual damage done…but that is the law.

    Don Dodge

    Comment by Don Dodge -

  76. I\’m not sure whether or not the number of uploaded videos would fall off of a cliff, but I did enjoy the \’cliff-hanger\’ nature of the end of this blog, is there more?

    All that aside: I wonder what percentage of their viewership comes from what percentage of the videos. Meaning, if they\’re getting 80% of their views from 20% of their videos, then why not hire a smaller \’force\’ to screen those, and place the advertising there?

    I imagine Google/YouTube know within seconds of a clip exploding in popularity, and it could be added to the \”Review Now\” queue, and if it\’s infringement free, add it to the \”Safe for Advertising\” pile.

    That way you get the advertising revenue, you minimize the risk of advertising on an infringing piece of work, and you don\’t have to deal with the cliff.

    Right?

    Comment by Phil McCarty -

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