The Coming Dramatic Decline of Youtube

What is it about that has made it so successful so quickly ? Is it the amazing quality of user generated content ? Is it a broadband fueled obsession with watching short videos ?

No & No.

Youtube’s rapid ascension to the top of the traffic ranks can be attributed to two and only two reasons:

1. Free Hosting from any 3rd Party site
Hey, why pay for bandwidth for a video if you dont have to ? A blog, a myspace page, an email, any website. Just throw in some html in foots the bill for bandwidth. Sure you are limited by size of file, but so what. Just chop it up into parts 1 through N. Its fast, easy and free.

Come to our website and use our video hosting services, we can party like its 1999 all over again !

2. Copyrighted music and video.
I dont have a count, but i bet Daniel Powters’ Bad Day is attached to some video snippet of every sporting event ever played , with links sent to fans of every losing team. PIrates season, You had a Bad Day. Spurs vs Mavs. Mavs vs Suns, Mavs vs Heat , Yankees vs Red Sox, etc, etc, etc. Bad Day, Bad Day , Bad Day. If Daniel had a nickel for every time his song was used in a YouTube sports video, he would be a much richer man.

This so reminds me of the early days of Napster. They were the first to tell you it wasnt illegal. They didnt host anything but an index to link to all the illegal downloaders. Youtube doesnt upload anything illegal and will take down whatever you ask them to. Sounds legit right ?

No, but thats not the thing. The thing is the shock that until Universal Music Group apparently started to put the pressure on them, no one had sued them. Considering the RIAA will sue your grandma or a 12 year old at the drop of a hat, the fact that Youtube is building a traffic juggernaut around copyrighted audio and video without being sued is like…. well Napster at the beginning as the labels were trying to figure out what it meant to them. With the MGM vs Grokster ruling, its just a question of when Youtube will be hit with a charge of inducing millions of people to break copyright laws , not if.

And its not just people putting copyrighted music to copyrighted video to create a new work of user generated content thats going on here. ITs also become a cheap and easy way to get music. Find a new hot song, and some kid is doing a goofy dance to it and uploading it to Youtube. Some have decent audio quality. So just search for the songs, create a playlist, minimize the window and play all your favorite songs as often as you want. For free. And of course if you have no fear for the copyright police, you can use tuberaider and keep a copy.

And its not just copyright lawsuits that will end up severely impacting Youtube’s business, its that their business is too easy for the people who own the copyrights to copy.

If Daniel Powter wants to encourage everyone and anyone to put Bad Day music behind user created videos, its certainly easy for him or his label to do. Its just a question of who will pay for all the bandwidth involved. If the NBA wants lots of versions of Bad Day or any other song backing videos of their games, they would be smart to do a deal with his label and have their own little hosting section on . As would any copyright owner. Maybe TNT will offer up the ability to host user generated voice overs of Charles and Kenny. Now that is using technology for a good purpose.

Whats worse for Youtube is that there might finally be an economic model for the copyright owners to host their own videos. Advertisers are chomping at the bit to buy rich media advertising and copyright owners are chomping at the bit to provide them broadband content for their ads. (Of course we are just a year away from there being far more video available than advertisers, but thats a future blog entry)

So you can pretty well bet that every and any copyright owner is going to be jumping up and down telling Youtube to remove every bit of content with any copyrighted material. The double worse news for Youtube is that wont be easy. How are you going to tell Barry that he has to take down the video of Aunt Sally getting her groove on to Long Tall Sally, and Uncle Willie doing the Hand Jive at his Bar Mitvah ? That those are both copyrighted songs that Cousin Brucie, the DJ played, and we encouraged you to break the law when we made it so easy to post them and send links to your entire family ?

How are they even going to find every instance of copyrighted music behind some personal videos ? They will have to. And it wont be easy.

Take away all the copyrighted material and you take away most of Youtube’s traffic. Youtube turns into a hosting company with a limited video portal. Like any number of competitors out there that decided to follow copyright law

Youtube, we hardly knew you.

UPDATE: This morning the WSJ wrote that Warner Music and Youtube announced a revenue sharing deal.
Obviously the devil is in the details of the deal, which we dont know. Obviously the devil is in the details. We dont know what the percentages are. We dont know how capable a salesforce Youtube has. We dont know what percentage of revenue their streaming costs take up (remember, streaming costs per bit dont go down as volume goes up, they go up at very high volume levels) and we dont know just how diligent they are going to have to be for Warner MG to recognize WMG copyrights.

Think about it. In order for them to recognize a copyright violation in the bar mitvah tape, they first have to identify any and all songs, then they have apply that to a list of WMG songs. That aint going to be cheap to do.

Does this make a difference in my thinking ? Not at all. In fact its reminds me of when Bertelsman cut a deal with Napster. It sure sounded nice, but didnt amount to much of anything. Kudos to WMG for giving them a chance and probably leveraging the hell out of Youtubes traffic, but this is just one copyright owner out of the thousands, if not tens of thousands owning copyrights that are most likely being illegally used on Youtube.

167 thoughts on “The Coming Dramatic Decline of Youtube

  1. Heyyy!
    Free ringtones @

    is this true??

    Thanks 🙂

    Comment by isordIncini -

  2. You Tube is corrupt. Common sense.

    Comment by RoyMasters -

  3. I know this is an old post…but c’mon man! YouTube is a seemingly unstoppable force!

    Comment by Gaming YouTube -

  4. Pingback: Looking back two years: Mark Cuban wrong about Youtube?

  5. thanx for this good post.I like it very nice post published.

    Comment by Gzel Resimler -

  6. I think we will see a new stream of applications that improve Youtube. See how has improved the usefulness and manageability of Youtube.

    Comment by Mel West -

  7. It would seem that Sergey and Larry have left the door wide open to litigation with this too.

    Comment by Youtube -

  8. I don\’t think Youtube is going to lose out that much, although selling out to Google may have been a mistake, because they are more liable to be sued. Has anyone seen the new ads on there? Horrible…

    Comment by Alex -

  9. Google\’s Video Voodoo

    Like everything else it does, Google only advances technology solutions that also advance its own cause … willful blindness, extraordinary profits, inflated egos, exponential market share growth, and/or unilateral control of all of the world\’s data and images.

    What is needed here is an industry-wide set of standards and procedures to combat widespread piracy.
    Not just for video, but for digital music, movies, illustrated artwork, recipes, poems, photographs, short stories, news articles, and all other copyrighted works as well. Each industry segment needs to endorse its own workable and reasonable set of standards. Believe it or not, this is far easier than you might think.

    Some of these standards have already been set. My small graphic arts content development company here in Virginia has developed a workable solution for new electronic clipart illustrations, design templates, cartoons, logos/symbols, and animations. Even photography.

    We have tried to share these standards with the Google\’s and Microsoft\’s of this world, but they make far more profits from continuing to display and distribute infringing works, and sell online advertising beside them, than they would if they were to demand compliance or change their own internal operating procedures, even those that require little work on their part. They have, for the most part, ignored our offers to help curb piracy in our graphic arts content markets.

    If you remember nothing else from this article, please remember this one thing. \”Piracy\” is the most lucrative business model there is for these giant search and advertising driven companies, like Google,, AOL, and Microsoft. They make the same gross revenues, and other \”eyeball\” benefits, with absolutely no cost of goods sold. They are not going to stop promoting piracy until we all force them to comply with the laws of this land. The solution requires the perfect balance of preventative industry standards upfront and strong enforcement (civil and criminal) against those who break the rules once they are caught. Willful pirates and willful distributors of stolen works.

    Industry accepted standards force two groups and two groups only to the back on the line … pirates … and those middlemen like Google who profit from the distribution of stolen property! Those who steal your work, or who steal the work of others that ultimately forces what you pay for things to go much higher. And those who cover up such unlawful distribution and create \”red herrings\”. This country has always called these people \”crooks\”. Why are the Googlites having such a hard time adapting to a world that respects copyrights? Think about it. How many Google billionaires did you see on the recent Forbes list of the top 400 billionaires in this country?

    Companies simply don\’t trust Google the way Google apparently still thinks they do … especially companies who own copyrighted material. Don\’t individual company solutions often create monopolistic business practices that in turn lead to greed, corruption, hypocrisy, and other illegal and/or unethical activities? Neither Google nor Microsoft deserve this kind of trust, or market power, from my experience. They have simply not earned it.

    This new Google video \”solution\”, a legal red herring if I\’ve ever seen one, forces companies to send all of their work through Google in advance. And when an infringement occurs, the companies have to expend yet additional resources to monitor the infringements and choose between three options as to how to proceed to protect their property. Google gathers valuable data throughout the entire process. Google continues to sell AdWords and AdSense along the way. Who needs a Westlaw or an Appeals Court under this scary scenario?

    And doesn\’t this approach of endorsing \”after the fact\” licensing further encourage pirates to continue their evil ways? Copyright defense lawyers will have a ball with this one. Just you wait and see. Think about it. If the penalty for stealing $200 worth of merchandise from 7-11 was your picture on a poster and a fine of 100 bucks, how many people would turn to this way of life?

    Google continues to make a fortune at each stage of their recommended \”process\”. What a joke. Voodoo. Let Google donate their technological solution to an independent third party monitoring service if they are serious.

    I thought we had laws in this country that cover this critical subject matter. Or is this yet another new \”law of Goooglism\”. Only two things will fix this serious piracy problem. VERY strict enforcement of our existing laws (civil and criminal) and industry standard ways of using technology to discourage or prevent piracy.

    No self-serving efforts are needed on this one, Google. Thanks anyway. The stakes are simply way too high!

    Here\’s the net. It is high time we held Google accountable for their role in spreading Internet piracy beyond a controllable issue in all parts of the world … and intentionally I might add. And I base my view on facts I\’ve gathered, not just speculation. They have contributed to making copyright infringement an epidemic of enormous economical and social importance. A white collar crime epidemic, the likes of which we have not witnessed in this country in a long, long time. They should not be applauded for this new technology. They should be condemned for their efforts in creating a world that requires technological safeguards to correct economic imbalances and engineering defections in its moral and ethical compass.

    If you can\’t see this handwriting on the wall, then you are either very naive or have some sort of vested interest right along with Google (or perhaps even Microsoft) in fabricating these smokescreens.

    Please reconsider your position. We need as many people in this copyright protection boat as we can possible muster.

    George P. Riddick, III
    Imageline, Inc.

    Comment by George Riddick -

  10. lol, The cost of bandwidth and YouTube showing no way to monetize on the traffic just yet is still the biggest issue.
    But lets not remember when Google first started they had no proper idea on how to monetize on their technology, they will shortly.
    you\’ll see

    Comment by fel3232, youtube addict -

  11. I totally agree with you that YouTube is declining – its really getting to be a place for copyright infringement.

    Comment by MySpace Addons -

  12. Well, a year after this article was written, it appears as if your doomsday predictions about YouTube did not come to pass. There was no copyright lawsuit over the use of music played in the background of user-made videos, and there\’s no such battle looming in the distance. YouTube remains a highly popular website and groundswell for millions of videos; it does not appear to be on a verge of any collapse.

    Case in point, the \”Leave Britney Alone\” video by Chris Crocker received 9 million hits, and the actor has been offered a television show. (I vehemently disagree with this outcome, but that\’s beside the point.)

    YouTube isn\’t going away anytime soon.

    Comment by Brett -

  13. Everything can be. But youtube must do something..

    Comment by Guzel Resimler -

  14. Youtube is very usefull and good but google must be careful about copyright mucis and videos.

    Comment by Resim -

  15. you were certainly right about youtube.

    Comment by resimler -

  16. I don\’t think you were/are right on this one Mark. I\’m not saying that YouTube is guaranteed to always be popular. I don\’t think there\’s anything particularly special about what they do. But they have all the momentum in the world and that should keep them going for at least a couple of years more.

    Comment by iPod Downloads -

  17. However, the quality of \”User Generated Content\” is improving.

    Comment by awflasher -

  18. Hi Mark,
    I have enjoyed reading your blog. I have just one observation. You are a role model to many young people. It would be great if you could spend some time using correct punctuation and capitalization for your blog. You would be setting a good example for all those who read your views. I know that this may not be the most \”fashionable\” way to communicate on the web, but I think that the example you set would be followed by others.
    Thanks for being a great citizen!

    Comment by Teresa Trujillo -

  19. You also bring up a good point about copyrighted material being illegally used. It\’s technically illegal for me to sing \”Happy Birthday\” to my mom and then post said video on Youtube (or anywhere on the internet, for that matter) without a license with \”Happy Birthday\”\’s copyright owner. Of course, this is ridiculous, and an example of how the specifics of intellectual property law have not appropriately adapted to the changes in today\’s society. Like the Sony Betamax in the 1970\’s…

    Comment by Music store -

  20. Anyone know another site where it\’s possible to create a username or do\’es everybody have to get in touch with another planet to find another language and number system that when entered says username OK????

    Comment by Mike Jardine-Crompton -

  21. interestin document


    Comment by youtube -

  22. you can add promote your YouTube videos on for quick search YouTube your clips

    Comment by quick -

  23. Legal action will come the way to Youtube just like it did with Napster, but their brand links viewing videos on the Web commonplace, and its becoming stronger as each day goes by.

    Comment by Oyunlar1 -

  24. Hi, please try this site: Thanks.

    Comment by Gabriel -

  25. Hi, please try this site: Thanks.

    Comment by Gabriel -

  26. Fantastic article covering some points I really needed. Thanks

    Comment by gutschein -

  27. 10. what next? i can\’t host a picture of me standing in fron of mcdolalds in flickr?

    Comment by gzel resimler -

  28. youtube is almost a fashion among young people
    Free image and video hosting

    Comment by turbinca -

  29. copy right is a very big problem for google. i think they r ganna have big promlem with it

    Comment by gzel resimler -

  30. wow! you were certainly right about youtube. foolish kids and their site.

    Comment by TQ -

  31. I don’t think that YouTube is in a decline… Sites like that allow to save any youtube videos or like that help you make your profile look better are appearing.

    Comment by Thomas25 -

  32. Go You Tube…

    Comment by loid -

  33. It’s called a loss leader people. There are instances where it makes sense to give things away because over a period of time you will generate more revenue because you gave it away than the cost to you in giving it away. sure it is a big bet but when you are playing with funny money it surely makes it easy and adds to the hype. and for the most important point of all, goog has excess capacity they want to use. its a fixed cost that doesnt change if their using 40% or 60% so why not use 90% and load it up. just like amazon is doing with their s3 and aws, it is all about driving to efficiency.

    Comment by tomo -

  34. Late chime-in, but had to echo the first comment on the list from this – eBay is EXACTLY the same business model, and eBay is still here, albeit a tainted and jaded version of the original, sprinkled with a healthy dose of corporate greed from the stodgy execs that need to move on and do something else. YouTube built a massive name for itself and the early adopters will likely leave YouTube faster than most left eBay. Ask any long-time seller on eBay (or buyer) — the user experience sucks precisely because of the premise it’s built on. They can’t and won’t stop fraud or copyright infringement and they won’t be held liable for that infringement because they’re only a venue. YouTube should actually be thanking the lobbyists from eBay with fat wads of cash in their outstretched palms for making it legal to skirt the legal issues without penalty.

    Comment by Chet Ranger -

  35. Hi Mark,
    Very Interesting article. Have a look at ( if you havent already (That’s how I came to your site). I found this also interesting, with a different spin on what may happen.

    Comment by Marc C-Scott -

  36. Hey Mark – good name, eh!

    I think YouTube will eventually drop all the copyrighted material. Its really going to be the original content which is going to drive the business model. That’s also where the popularity is as well.

    Copyrighted material may have a place in YouTube-space as many of the copyright owners derive benefit from their content being there… like little commercials to get you to watch the shows. If this avenue continues to exist, it would likely need more control on the way they’re posted.

    Anyway, it the original content which needs to drive the model. Its far from a solid business plan at the moment but there must be some value in the 100 million in daily hits. Extracting that value (making money) is a TBD at the moment, but I think a sustainable model will emerge.


    Comment by Mark Demers -

  37. Marc, such sour grapes over someone earning 1/3 the money you did for selling a service that would be worth ten cents today. Streaming radio turned out to be a financial joke, and yahoo foot the bill to pay you billions because of the craziness of the bubble. Now you wax on because some new bubble entrepreneurs who actually have the potential to create a real biz model which you never did (ie, ask anyone what happened to–ie, nothing) and you are outraged. Give it a rest. You sold pixie dust and now your calling the kettle black.

    Comment by dennis miller -

  38. YouTube Takes Down Comedy Central Clips Based on DMCA Claims
    via NewsCloud

    I received a couple of emails from YouTube this afternoon (see below)
    notifying me that a third party (probably attorneys for Comedy
    Central) had made a DMCA request to take down Colbert Report and Daily
    Show clips. If you visit YouTube, all Daily Show, Colbert Report and
    South Park clips now show “This video has been removed due to terms of
    use violation.”

    For a long time, Comedy Central has passively allowed the sharing of
    online clips of its showsbecause let’s face it, it’s helped them
    generate the kind of water cooler talk that has made them a ton of
    money. In this Wired Interview , Jon Stewart and Daily Show Executive
    Producer even encouraged viewers to watch the show on the Internet:

    Karlin: If people want to take the show in various forms, I’d say go.
    But when you’re a part of something successful and meaningful, the
    rule book says don’t try to analyze it too much or dissect it. You
    shouldn’t say: “I really want to know what fans think. I really want
    to understand how people are digesting our show.” Because that is one
    of those things that you truly have no control over. The one thing
    that you have control over is the content of the show. But how people
    are reacting to it, how it’s being shared, how it’s being discussed,
    all that other stuff, is absolutely beyond your ability to control.

    Stewart: I’m surprised people don’t have cables coming out of their
    asses, because that’s going to be a new thing. You’re just going to
    get it directly fed into you. I look at systems like the Internet as a
    convenience. I look at it as the same as cable or anything else.
    Everything is geared toward more individualized consumption. Getting
    it off the Internet is no different than getting it off TV.

    But apparently, all good things come to an end when there is money and
    attorneys involved. I assume the only online clips that will remain
    will have to qualify under fair use probably short clips, with
    social or political importance.

    With Google purchasing YouTube, ComedyCentral figured there was now an
    opportunity aka profit center to target. And they’ve assumably made
    these DMCA requests to YouTube.

    So assumably, with less interesting content, YouTube is a lot less
    interesting now and perhaps not worth the billion dollars Google paid
    for it though they knew exactly what they were getting into. It’s
    even possible that Apple or Viacom pushed ComedyCentral to take this
    step since they earn revenue from the shows.

    Comment by Jeff -

  39. Are “safe habor” laws protecting YouTube? As a result, the legal burden falls upon the users.

    Comment by Steve -

  40. Hi Mark,

    As you know, the bad news is that the 800 pound gorilla has been adopted by the 8000 pound daddy gorilla, and the 8800 pound family has started working on capturing most of the banana trees on this earth. Daddy gorilla named our earth, Google earth, and keeps a close eye on planet Mars too.

    The good news is that I may have some powerful solutions to this situation, the result of which could be huge market liquidity and strong monetization due to precision targeting and other factors.

    The solutions are based on business methods and technology. here is a general characterization of the proposed solutions:

    (a) To provide more compelling reasons for marketers who spend $100 billion annually on advertising to come to the market place, at insignificant acquisition costs to market’s owner.

    (b) To provide more compelling reasons for monetizable content to be created and brought to the market place.

    (c) To achieve, virtually at no cost, reliable screening and classification of content for quality, personalized appeal /offensiveness, copyright violation, and other marketing targeting metrices.

    (d) To capture virtually at no cost millions of focused prospective buyers.

    (e) To provide more compelling reasons for viewers to watch and share/distribute.

    (f) socially speaking – a warmer name, like Tribooo.

    Please let know what do you think?

    Comment by Yossi Gliksman -

  41. Mark,
    You’re absolutely right: it has never been the user-content (other than perhaps skateboard accidents ) that made youtube famous. The move to Google means nothing for indie media creators, but is a huge victory for the mainstream media. By further thoughts:

    Comment by Ryan Ritchey -

  42. Yeah, I do agree about the copyright issue. This could really come crashing down hard on YouTube, and ultimately, Google. It seemed like a good idea at the time, but I think Google will be paying a big price for this.

    Comment by Travel Guide of America -

  43. The biggest reason I, as a content owner, may not be using YouTube any longer is that they haven’t stated what their revenue sharing methods will be. If I create an incredibly cool video and it makes their front page, what’s my cut from the adverts they’ll be slapping all over the place?
    Google has already shown that they’ll drop advert hosting sites with no recourse (it happened to me) so what are they going to do with all the fan/indie videos that are on YouTube now?

    Comment by Michael -

  44. i believe youtube should remain a public site … just for somebody to post their homepage videos …

    Comment by Henry Huang -

  45. I think Mark is wrong. I think Google, through a combination of deals and technology, will get around the copyright issue. First, they will have technology to know if something is infringing. Why do you think they are building those giant server farms? For search? No way. Then they will have the deals. You won’t sue us, and we will promote your crap on our service. You think Google did a $1.6 billion deal without talking to the major media companies about this issue? You think Google wasn’t thinking about this issue and how it related to Google Video?

    I think Mark knows that sometimes it pays to be contrary. How much attention has he gotten from talking about it?

    Comment by Michael Hoffman -

  46. People made the same arguments you’re making about Youtube against VHS a generation ago. Remember Sony v. Universal Studios ( Just because the technology enables people to infringe upon copyright, does that mean that the technology per se should be criminalized? Sony won that landmark case and there will undoubtedly be others like it where companies like Youtube prevail. I think what happened to Napster was an artifact of being so new and unfamiliar to big media (and to the court system) and a series of unfortunate events (including the leaking of the Madonna single) that led to their demise. I don’t think that Youtube/Google will suffer the same fate, but we’ll have to wait and see.

    Comment by Chris Bucchere -

  47. Please, for the love God, learn how to correctly use “CHAMPING at the bit”.

    Comment by Kevin -

  48. It’s suddenly clear why Google bought Youtube: it’s their answer to sites like Revver which offer compensation for user uploaded content. Google will share revenue derived from the content with the uploader, any copyright owners, and Google of course. A simple solution to the potential growth of other video sites. Nice!

    Comment by Christopher Peterson -

  49. i’ll buy for a $1.

    Comment by mark taylor -

  50. CNN is reporting that Google is in talks with YouTube to purchase the company for $1.25 Billion. (Divide that by 25 employees)

    I think this is interesting because the mainstream media criticizes YouTube for sharing pirated content. Of course, with a small company like YouTube, YouTube’s large footprint often benefits the businesses being pirated. For example: Someone puts up a Daily Show clip. People watch the clip on YouTube. More people watch the Daily Show. Daily Show ratings go up. Advertising rates go up. Daily Show makes more money.

    However, if Google owns YouTube the portrait drastically changes. Google has deep pockets and is skilled at monetizing content. Content creators may decide to try and access Google’s pockets directly via lawsuits.

    If Google acquires YouTube the whole stack of cards could collapse.

    I am not saying collapse will happen. Savvy content providers will recognize the benefits of YouTube and work out revenue sharing or royalty deals with Google. However, all it will take to grind YouTube to a halt is a lawsuit and a strong-armed judge. That is more likely to occur under Google ownership.

    Comment by Tom Schmitz -

  51. LOL…looks like some jealous people here. Come on Mark, you’re rich enough as it is. Do you really have to begrudge YouTube it’s coming big payday?

    Today provided some news to utterly discredit the argument that YouTube will never see that day. Google is in talks to buy for $1.6 billion. It must be nice for those in on YouTube. They are certainly looking a lot better than the sour grapes crowd.

    Comment by Brian -

  52. Well, it looks like the “morons” that may buy Youtube are the same ones that started Google!

    Nothing personal, Mark but they haven’t done a whole lot over there to make me doubt their business acumen. You may not have had the proper vision on this one.

    Comment by Jason -

  53. Mr. Cuban,

    Your just airing your sour grapes because no one uses Realplayer anymore, and YouTube is the obvious next generation that you could have developed if you weren’t wasting your time pursuing an NBA championship.

    Comment by Doug -

  54. Hi Mark, I just discovered you have a blog, that is so cool. You strike me as someone who’s not afraid to speak his mind and that’s an admiring quality. Especially in a world where people are so afraid to speak their mind that they think they’re going to be sued at every intersection. Keep doing what you do.

    Author of FOREVER MY LADY
    Warner Books

    Comment by Jeff Rivera -

  55. It would be my luck that my favorite site will get litigated to death
    by a bunch of idiots and shut down.

    Comment by Enrique -

  56. Hey Mark,

    Why all the hating? There are issues to work out with digital media management, sure, but we have only been on it for 7 years. Your insane rant about copyright issues on you-tube discounts the millions that use it properly (and how little is actual copyright infrigement going on.)

    From what I can tell, its mostly people showing their pointless home videos. More than half the content is girls in their early 20’s lip syncing to an album (which most albums are probably purchased, making it legal to do so)

    You also discount people like me, the independent film maker. Yes I know what true risk is, I make less than 30K a year and am investing 10K into a 15minute short. You-Tube for me seams like an excelent advertising oppourtunity. Short films don’t profit often, because attention span is about 2 minutes. If I can’t buy the short within 2 minutes of seeing a trailer, I won’t get it. If I have to power up my computer, I won’t get it.

    But I can upload my :30 or :60 trailer and have millions see it all over the world, then using another distrabution chain emerging on the copyright front, Ipod movies, I can release it to the world, charging less for a download than the dupe house would charge me for a low-volume DVD printing.

    You were once a brash kid with little in his pockets but big dreams. Wouldn’t you enjoy some new technology to come around at the perfect time to help you in your endevors? (nothing like that happend to you….right?) I know there are media management issues the internet presents, and there will always be copyright infringement. But I think the general consensous is moving the internet community to find management solutions that help protect the producers, but give power to the creators.

    And to give contrast between the typical distrobution sceme, and new internet models, in the past it wasnt CI that screwed you, it was the distrabutor. They typically take all gross upfront and pay you after P&A costs and distrabution fees. You may never see a dime while the distrobuter goes into profit. With internet distro, you get reliable percent of gross from the first dollar on (at much lower distrabution fees than traditional models).

    The times they are a changing. Are you already getting old and set in your ways? Why not use your resouces to help us (the little guy) protect and distrabute our assets, instead of trying to freaze technology where its at.

    By the way, see how things turn out in 2007 when my new short film ‘Sleep’ gets distrabuted exclusivley online (and possibly through Tivo…we’ll see)


    Comment by Mike C. -

  57. Looks like my previous comment got cut off. Here’s the rest:

    You can buy software to encode your videos into FLV format for under $100 and there are free Flash FLV players. Sure you have to pay for bandwidth, but because you own the channel, you can implement an advertising, sponsorship or even a PPV model as you see fit. Again, YouTube is a stepping stone.

    Over the years we’ve seen the advent of blogging networks, where groups of bloggers team up to leverage a single platform, cross-promote and build a larger audience. I would be surprised if we don’t soon see vlogging networks, where talented video producers team up to create “channels” with a variety of different “shows” under a common brand.

    Comment by Drama 2.0 -

  58. Chris D: Thanks for the kind words. I’m actually Rupert Murdoch. Seriously, though, I post under a pseudonym for a couple of reasons. The first is that I run a relatively new “Web 2.0” startup. It’s probably not something that you’ve heard of (yet) but by virtue of the fact that we’re entering into and negotiating deals with large companies, I think it’s prudent that my musings on business don’t become perceived as those of the startup. I personally believe that there is incredible opportunity with social media but that social media is not going to destroy big media and that the rules of business still apply. Management teams, business models, profitability, cost controls, etc. are not somehow irrelevant for Internet businesses. And technology for technology’s sake seems to be too prevalent in Web 2.0. As Mark said, “It’s not the net, it’s the applications stupid.” The second reason I prefer to remain anonymous is that I’m fairly young (mid-20s). Although a lot of people seem to like what I write, there are people within the Internet community (execs, VCs, etc.) that get offended when somebody points out flaws in their companies/investments. I’d prefer to provide my opinions without jeopardizing any long-term relationships in the community. I might “come out” at some point but for now I simply enjoy being “some guy” with an opinion.

    Bob Jacobson: Really enjoyed reading your blog entry. Agree with a lot of what you’re saying. The bulk of the content out there is crap and in the long-run, these sites will lose their appeal because of the clutter. The focus should be on quality, not quantity. This is especially true in YouTube’s case, where the costs of serving content are high but only a small subset of that content will realistically be monetizable.

    Eventually I think there will be a shift away from “aggregators” of video content, like YouTube. Talented producers will go on to get recruited by media companies or they will create their own online broadcast “channels”, like or Rocketboom. They might leverage YouTube as a marketing platform, but once you have a following, there’s no reason not to develop your own website. You can buy software to encode your videos into FLV format for

    Comment by Drama 2.0 -

  59. I have a different take on why the YouTubes of the online world will fail: user disinterest. As the video scrapbooks bulk up, finding quality work diminishes. More importantly, as the corporations buy-in (and buy-up) and professional video producers (e.g., ad agencies) increasingly control the content, the sense of freedom will decline with it — which is the appeal of these media.

    For more, read my blog entry, “Video Democracy Online: Once a Reality, Soon a Dream,” on Total Experience:

    Comment by Bob Jacobson -

  60. eBay has not been sued, YouTube has to remain independent to have any chance of avoiding future litigation.

    Comment by Mediawiz -

  61. I think you have it backwards, when music is used on a YouTube video the owners of the tune should pay YouTube. Sort of like payola in radio. I would not be surprised if copyrighted material was being put on YouTube by the copyright holders. Full CD quality audio tracks that might be another issue, but 2 teenie boppers having a pillow fight to Mega Death, Mega Death owes YouTube Money.

    Comment by Geo8rge -

  62. Non-infringing use protects YouTube against copyright lawsuits. I was a VP at Napster when we were being sued by the record labels, so I know a little about copyright infringement.

    YouTube has “significant non-infringing use” which is a proven legal defense against copyright lawsuits. The Sony BetaMax case was won on the basis that video recorders were used for many other legal purposes that demonstrated significant non-infringing use. Sony could not be held liable for the misdeeds of some of its users. It is the responsibility of the copyright owner to identify infringing material and take action to protect it.

    I wrote a blog “Mark Cuban Loves YouTube” that provides more details about Internet copyright law, and why I think YouTube is safe.

    Comment by Don Dodge -

  63. We thought that you might find our reply to Lee Gomes WSJ article on YouTube stats interesting:

    It raises questions on viewership, demographics , and bandwidth data.

    Comment by Nicholas Quixote -

  64. Only a moron would buy

    Comment by Kevin -

  65. Drama2.0: I gotta know, who are you? We’ve both been posting about YouTube for awhile now on various blogs and your comments are just too spot on and well articulared for you to just be some person out there spewing random opinions…

    I was talking with a friend the other day about this very problem you explain: people using YouTube as a launching platform but YouTube not being able to achieve value extraction at all. I *love* to see what the people are doing on YouTube: YouTube has shown 5 million streams of their show (25 minutes!!), and the Content Creators are – apparently – trying to sign people to advertise on their show. I guesstimate that YouTube just subsidized at least $100k worth of bandwidth/serving for (~100 million streaming minutes @ $0.001/minute which is crazy cheap). Clearly YouTube is not paying $100k in cash for that (they pay for the pipe, not usage), but it’s a clear example of failure to capitalize on value creation. cashes in. YouTube foots the entire bill. This is going to happen over and over again. Me thinks YouTube will have to crack down on that type of usage.

    Also, Forbes is running YouTube as their cover story in their next issue. Why is the media so obsessed about this?!? It almost is appearing to be conspiritorial…

    Comment by Chris D -

  66. You write: Think about it. In order for them to recognize a copyright violation in the bar mitvah tape, they first have to identify any and all songs, then they have apply that to a list of WMG songs. That aint going to be cheap to do.

    My response: Absolutely cheap! Just add a field or two in the upload page and have the user enter which music and artist are embedded in the video. Then all Youtube needs to do is cross-reference the songs with label’s catalog and allocate the advertising revenue between them. The ad revenue generated from the millions of pages is a NEW REVENUE CHANNEL that will produce more than if you shut the network down. Old school thinking vs. figure it out, man, it’s new and improved!

    Comment by Christopher Peterson -

  67. An earlier poster said it best: “It hasn’t been sued because it’s a great advertising tool and a great way to build brand identity and differentiation, and a great way to get to get fans of your product to invest more in the product and evangelize your product. No ones going to sit there and build a video playlist and minimize the screen to hear songs because:
    a) the quality ain’t there
    b) you can get high quality versions of those songs elsewhere for free (pirates) or for minimal cash (iTunes)”

    Adapt or die. Figure out how to exploit all the free exposure rather than kill it. It seems so obvious. Also, if I can find a neat way to link myspace content with youtube content, I’ve got a first class viral campaign going. I see it happening – I’m in the biz. Murdoch’s figuring out a new model. Time to start thinking outside the box.


    Comment by phil -

  68. Roger: technology is certainly reducing the costs of producing quality content, but I think you’re mistaken if you really believe that the costs are going to go so low that a guy in his garage can produce content of the same quality as a major studio. Big media isn’t “sinking” anytime soon. Clearly, you’re not familiar with the labor and financial resources required to produce even a simple TV commercial. There is good homemade content on YouTube, but you can easily tell that it’s homemade.

    Another point most people seem to be missing about content creation is economic incentive. There will be people who produce content for fun, but more often than not the person who is going to spend time and money producing something of quality is doing it for gain, whether it be financial or other (career/fame).
    Giving people a way to cash in on their work is something YouTube needs to do, but they don’t have a monetization model and it remains to be seen if there is one that is viable enough to create a business with revenues that would (in a sane world) justify the valuation they’re seeking. A few points on this:

    – After the LonelyGirl15 “series” became famous through YouTube, her creators switched over to Revver to (hopefully) cash in. Revver gives producers a cut of advertising revenue. Will their model succeed in the long run? Who knows, but in this case, you can see that YouTube provided a platform for the producer to gain attention and they then switched to another service that gives them a chance at cashing in once they achieved mass popularity. YouTube got some press, but lost out when you consider that they subsidized the hosting/bandwidth and helped bring LonelyGirl15 an audience – free of charge.

    2. Two popular YouTube “stars” just signed a 6-figure deal with NBC:

    Again, YouTube subsidized the platform that gave them the opportunity to become popular, and an evil media company swooped in to sign them. Contrary to what many people believe, big media isn’t necessarily slow and dumb. They will use services like YouTube to find new talent and recruit it. Look at it this way, Roger: let’s say you make quality video content that becomes very popular. You get a call from Time Warner offering you a 6-figure/year deal (with upside potential) to come work for them. They’ll pay you to do something that you love and that was costing you money, and you’ll have access to all the resources they have at their disposal that the average person just doesn’t have. It’s the career opportunity of a lifetime and most people will take it. YouTube can’t compete with that, and unless they develop a monetization model (or find somebody dumb enough to acquire them), before they go downhill they will be used as a stepping stone for budding talent to move on to bigger and better things. YouTube will probably create some new stars. The next Jon Stewart, Dane Cook or George Lucas is out there and they might very well use YouTube to make a name for themselves. And guess what: YouTube won’t make a cent from them.

    Comment by Drama 2.0 -

  69. A related development: Morpheus just lost its lawsuit that the Studios filed against it:

    Comment by Chris D -

  70. What is really going to sink big media is the increased capability of anyone to make videos and films of the same quality, so that big money will no longer have an edge, especially as ordinary people become more experienced at production, lighting, the latest video/film production technology, etc. “Copyrighted content” will become a redundant phrase, as well as irrelevant.

    And don’t forget the coming purely-digital video and film revolution. It’s already begun.

    Comment by Roger Wasson -

  71. The difference between the Grokster case and YouTube is that the court in Grokster found that Grokster didn’t have a substantial non-corpyright infringing uses, YouTube onviously does. Unlike Napster/Grokster, YouTube is actually being used right now to upload original content on a large scale. I think this fact will distinguish the two cases.

    Comment by SDLaw -

  72. If Youtube is forced to clean itself up, will other video hosting sites like Yahoo and Google be forced to do the same?

    Comment by Allan -

  73. I only have respect for Mark, but I think YouTube will not suffer the same fate as Napster. I truly think these are different times, plus the posting of videos with “background” music that may be infringing a copyright (I feel) is arguable.

    More thoughts here:

    Comment by Manny Hernandez -

  74. I never understood the problem an industry has with Youtube…

    For example, I saw a “Family Guy” clip posted that was absolutely hilarious. As a result, I went out and purchased the boxed DvD set and found other episodes I enjoyed.

    I saw a great music video, googled the artist and bought a CD. Simply for the fact that I saw it on Youtube.

    Sure, an arguement can be made about “how far is too far”. But in an age where MTV is no longer Music Television, Youtube serves a greater purpose.

    Comment by Scott Boswell -

  75. Mark may be right! Maybe not about the copyright issue but how do they monetize the posts on the social networking sites without embedding commercials in the video. The reason they are streaming 100M a day is because every myspace profile has a youtube clip on it that people play and never visit the site or see an impression. I thank Sequoia Capital everyday for picking up the bill for the videos in my myspace profile! Seems like a great marketing and statisitical stunt but can it sustain financially?

    Comment by Xonger -

  76. Hey Mark, I think it’s great how detailed you are in your blog entries. Really interesting thoughts on YouTube, I guess we can only wait to see how it all plays out.

    Go Mavs!

    Comment by Tony Chung -

  77. Hi i think you are not considering a VERY important point. Youtube + blogs are an awsome aportunity for Advertising. For example a new paris hilton video. shure a lot of people can see her in Mtv or something like that but millions and millions can see her all over the world for… FREE. Remember the contest ? they asked people to do a cool video for firefox, then thousends of bloggers pluged their favourite ad via youtube. firefox get millions of downloads. i work in a advertising agency and we are preparing celphone campain… its a very fun video , we are expecting a lot of people plug it in their blogs, and we`ll get massive distribution for free. —–
    is like software piracy… do they actualy whant to finish with that ?… i mean a lot of people use photoshop… kinds that have downloaded it. then those kids (some) love image editing and design so they study and when they are professionals which software will they use ? and BUY? PHOTOSHOP… jmho

    Comment by lolec -

  78. YouTube is the current firebrand for the legal system dealing with copyrighted content (remember Napster)? With the declining cost of bandwidth, are we ready for whatever Movie clone site pops up in the next 12 months?

    While YouTube needs to be worried about changing their business operations to deal with the increased copyright scrutiny, the next competitor is right around the corner, probably not even launched yet, only in someone’s mind.

    Comment by Taylor -

  79. 2Last

    Update: YouTube has made an official post about the deal and has said that use of the copyrighted music from Warner will be free to users.

    Comment by Ruslan -

  80. time will tell…

    Comment by firetear -

  81. He’s right….Or is he???

    Comment by Zach -

  82. The difference between YouTube and Napster is the downloading factor. With Napster, you could download any song and burn it to a cd, making it always accessible. The fact that you can’t download youtube videos (even if you could, what would you do with them?) makes it a whole lot less useful. I mean sure, you can stick it on your website, you can show all your friends. But if you really wanted to do that, you could do an mp3 search on altavista for the song. Youtube is not giving users ownership and the convenience of constant use, and that’s what will be the deciding factor.

    The only decent sites that aren’t made by some amateur web designer I have ever seen that use youtube for bandwidth are and I honestly think it’s tacky too, if you can’t pay to host your own video, then is your site really worth visiting?

    Can I have a thousand dollars?

    Comment by Ricky White -

  83. Isn’t there a chance that a lot of the videos could fall under the definition of pardoy and there by be considered fair use. Just a thought, also Mark great to see you are backing coach sampson at IU. Great things lie ahead for IU basketball

    Comment by Brian -

  84. Hey Mark,

    Didn’t you say the same thing about mp3’s during your keynote @ SXSW Interactive in 1999. You were spot on then, right? Certainly YouTube and MySpace aren’t pretty, but they are successful and will be around for awhile, even if its in the form of ripoffs like GoogleVideo.


    Comment by Matt -

  85. Very popular theme, and activity of users respective.

    Comment by Yura -

  86. I don’t think they’ll get sued. In advertising they do something called “Viral Marketing” where advertising is planted in a way to get to the average Joe in a more word-of-mouth fashion. If brands, music, whatever have any kind of brains they will see You Tube as a free form of viral marketing for their brands.

    Of course, most people in the entertainment industry are pretty light on the brain front, so yeah. You’re probably right 😉

    Comment by Ginny -

  87. Okay Mark, I’m sure this has been brought up in one of the 73 comments you’ve received. But unfortunately, the downloader will not be in any excess of copyright law. The uploader (as the sharer) will pay the consequences.

    Comment by Oskar Syahbana -

  88. Cuban might be right about YouTube, but what about independent TV on the internet? For example, check out what Tom Green is doing. He’s got a live nightly goofy internet call-in talk show, every night at 11PM EST.

    He’s trying to get sponsors at the moment, and currently he’s paying all the expenses himself, with some help from Mania TV. Is what he’s doing going to be successful? Will we see more of this kind of thing?

    Comment by John -

  89. “Youtube is TV’s big fear. It shows that people don’t need them.”

    This is flawed. The majority of the popular content on YouTube is professional/TV content (or created by media companies that own television interests). If you cause these media companies to suffer too much then there’s no money to produce this content anymore. The promise services like YouTube hold is great. Media on demand is the holy grail. I don’t think media companies are evil (they’re morally agnostic – they care about the bottom line) and if YouTube can make them money, they’ll eventually buy in even though they may not like not owning the distribution channel. But right now there’s no viable method for monetization, and so long as that’s the case the incentive for media companies to produce content will be reduced if they start feeling the pain. At the end of the day, the “laws” of economics still apply. The production of quality content costs money (even though this cost is decreasing), so the producers need to have an economic incentive to continue developing it. People that believe everything should be free don’t realize that for economies to work, the producers of goods and services have to be compensated properly.

    “It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.”

    – Adam Smith (Wealth of Nations)

    If YouTube can find a way to monetize, they might succeed. But they haven’t and no online video company has put forth a model that is generating the kinds of profits needed to sustain this long-term.

    The Wall Street Journal article Jon contributed has a very interesting comment:

    “People who work in the industry estimate Vivendi SA’s Universal Music Group, the world’s largest recorded music company, earns around $15 million a year, or less than 0.5% of its annual revenue, from hundreds of online video licensees.”

    This shows the significant challenge YouTube is facing. If hundreds of other video licensees are collectively generating only $15 million a year for Universal, that gives you some indication that this isn’t as easy to monetize as a lot of people seem to think it is. Obviously YouTube is the premiere online video site, but something Mark hinted at is that the advertising inventory YouTube has seems to be vastly greater than demand. I’ve run some various numbers and it looks like YouTube will not be able to fully capitalize on their popularity. One of the things many entrepreneurs forget to look at when doing revenue projections is the upper limit of the market’s size. If you project annual revenues of $2 billion but the current market is $1 billion and growing at even 25%, you have a problem with your projections. Do the math on the assumption that YouTube will insert short ads before the video plays (this seems like the most viable monetization strategy, although YouTube management insists they won’t do this). YouTube is serving up 100 million videos a day. How many of those videos are videos that brands would want to advertise in? Given the amount of money brands have allocated for online video advertising in their marketing mix and how much of that is earmarked for YouTube, what is the CPM YouTube could realistically charge? How effective will these advertisements be (i.e. how many brands will renew?). Obviously there are a lot of unknowns, but I think if you plug in realistic numbers, YouTube’s business looks a lot less lucrative. Another thing that one must consider is the number of brands that can participate in video advertising as contemplated here. One of the reasons Google AdWords and other PPC services are so successful is that everybody, from a Fortune 100 company to a mom and pop store on Main Street, can easily participate. That enables Google to tap into the tens of millions of small businesses around the world that may only spend $5-$10/month on PPC advertising. With video, the opportunity for smaller businesses to participate is reduced (they don’t have the money, resources or desire to produce compelling video ads), so YouTube will have to rely on larger brands (mostly consumer) for their advertising revenues.

    Comment by Drama 2.0 -

  90. mr. cuban, i disagree with your interpretation of copyright law. i agree that posting up high quality music videos or what not of the latest music is most likely illegal and actionable, but…

    “How are you going to tell Barry that he has to take down the video of Aunt Sally getting her groove on to Long Tall Sally, and Uncle Willie doing the Hand Jive at his Bar Mitvah ? That those are both copyrighted songs that Cousin Brucie, the DJ played, and we encouraged you to break the law when we made it so easy to post them and send links to your entire family ?”

    Aunt Sally getting her groove on to Long Tall Sally or Uncle Willie doing the Hand Jive — in my opinion — will not fly in a courthouse as an infringement of copyright protections. The audience who watches such videos are most likely not there for the music, but for a “derivative work” where the music is only incidental to the entertainment.

    It is akin more to a family get-together where the host plays music and Aunt Sally is dancing or going to a club where they play copyrighted popular music, but it’s not like the DJ must pay a royalty when an artist’s music is played in the club.

    youtube is NOT a motion picture production where, at the climax of a romantic comedy, two couples fall in love and frolic around the park to “my girl” and hence movie company must pay royalties to the artist and music company for permission to use the song.

    … mmm… your blog would be more on key if you concluded that a new business model needs to emerge such that youtube could somehow reconcile its differences from a major motion production using songs or other copyrighted materials in a blatantly commercial-use/setting VERSUS Aunt Sally dancing to “get your freak on” in a primarily recreational, non-commerical context.

    One is clearly for-profit, one is clearly not-for-profit. It doesn’t matter that youtube throws a banner in there and makes half a penny. The last thing the courts will do is rewind time and make the same mistakes they made in the first batch of internet file-sharing lawsuits…

    I dont think the courts will succumb to big business lobbyists the second time around. The fact of the matter is a new business model is emerging (has yet to emerge) and big, old entertainment industry companies who try to retroactively exploit the judicial system and simply call all this a violation of copyright law are vastly mistaken in their big picture interpretation of the law. (Or, they are not mistaken, they are simply fighting to keep their investments afloat… and milk the cow as much as it can before this thing collapses entirely.)

    One basic premise of copyright law, is only to protect rights to such property where it is conducive to a promotion of the sciences and useful arts. In other words, if it’s good for the economy and growth, it’s going to be legal… NO MATTER WHAT. It’s the economics and the law movement.

    Perhaps your attorney is making the same mistake and therefore you would write an opinion like this. Copyright law is changing as we speak. But the entrepreneurs (you guys) need to figure it out (the business model). Using old law to fend for one’s property rights is bad business and in fact is often a sign of a detoriating industry utilizing its last ditch resort.

    If your only argument is it’s a matter of time before the courts shutdown youtube, I don’t think it’s going to happen. Often times, there are casualties when progress is made. youtube is progress.

    Remember that blog you wrote about giving your relatives a 300 ipod loaded full of your vacation pictures and home videos? Well, yeah, here it is. Except it’s even better than an ipod. It’s all loaded on the internet. for free. Youtube.

    Comment by jason -

  91. Mark’s not right. He makes great points about the potential copyright liabilities that YouTube faces, but there are two reasons that YouTube won’t go the way of Napster: YouTube is backed by stronger people than Napster was and the infringing use of copyrighted material is not as blatant as Napster’s use was.

    It’s simple:

    Sequoia backs YouTube. They are much better equipped to advise and guide YouTube through any litigation or settlements than Bertelsmann was for Napster.

    People are incorporating the copyrighted material into original material which makes it harder to prove any types of damages since you can argue that there is no proof that the content producer would have used the copyrighted material if he or she had to pay for it. Similarly, YouTube is putting in into place processes to help remove copyrighted material if the owner asks them to. Napster never had that :-).

    Comment by Yossi Goldlust -

  92. That copyright bull shit is stupid, it should be a free world.

    Comment by Funny Commercials -

  93. Mark,

    I think it’s amazing how the blog you created here won you the WEBBY ENTREPRENEUR OF THE YEAR AWARD. Great Strategy!

    I am involved in a private equity, social networking business project, if you are interested to hear more?


    Comment by Mike Coppola -

  94. Looks like you were ahead of the curve on this report:

    Comment by Jon -

  95. As a previous poster pointed out, since the quality of the video is just barely suitable for a small window in your web browser, let along listening to as music, it’s more of vehicle to drive a show, brand or song and creative works owners will realize that.

    What’s baffling to me is the band width costs. I have heard different numbers, but does anyone have a fair range of what it costs a month for youtube?

    As an experiment, in February I wrote a website that shows videos (not hosts), allows images to be uploaded, then stamped by the website with the user name of the submitter, with RSS etc

    Very similar to youtbe with the big difference being hosting. I wrote the site in 1 1/2 weeks (see it at )

    Mark is dead on again. Youtube is a simple app like Napster was.

    Comment by RazorbaGuy -

  96. I hate that Bad Day song. Anyone who uses – even if they pay for the rights, should be sent to jail. It got annoying during American Idol when it was used for kicking folks off the show. But now it’s just used for any clip.

    Youtube is TV’s big fear. It shows that people don’t need them. Who needs MTV when I can see the video that I’ve been thinking about – instead of waiting through 12 straight episodes of Cribs to catch a butchered version on TRL. For years I’ve read about how the Japanese episode of Speed Racer is longer than the American. Thanks to Youtube, I was able to see it. Same with Serger Gainsbourg’s “Melody” TV special. Nobody in America was going to put that on the air or on DVD.

    The biggest problem at this moment is that the consumer is taking a larger role in the world of entertainment. They no longer have to just sit back and take it. With DVDs, the consumer now owns a picture that’s better than most of the stuff that your local TV station broadcasts. Who needs TBS if you own all the Friends, Seinfeld and Everybody Loves Raymond episodes? And it is possible to run a streaming video back through your cable modem so that your relatives can watch what’s running on your set. Groups of people will be able to set up their own mini-network. Or folks will just be able to set up their own X TV style channel.

    The sad part is that no one is looking at the reason why these alternatives have taken off – because TV programmers are lazy. I have 120 channels and at any time, at least 2/3rds of them are running marathons or an Adam Sandler film. Or Fifth Element (the 21st Century BeastMaster). I found a TV guide from 1975 in Boston and people actually cared about getting viewers on a Saturday afternoon instead of running infommericals, sports and marathons.

    Comment by Joe Corey -

  97. In my opinion no one can stop uploading/downloading different audio/video materials on Internet. Those who are in charge should reconsider the Copyright laws for the Internet.

    Comment by Christian bass player -

  98. This so reminds me of the early days of Napster. They were the first to tell you it wasnt illegal. They didnt host anything but an index to link to all the illegal downloaders. Youtube doesnt upload anything illegal and will take down whatever you ask them to. Sounds legit right ?
    that’s rihgt.

    Comment by otel ikayet -

  99. great analysis… this is definitely an unfortunate thunderstorm gathering on YouTube’s parade.


    can’t wait for your take on the Disney/iTune numbers after one week of business ($1 M in sales):


    Comment by Martin Rivard -

  100. well, this video is better than the “bad day” video, which is, I suppose, the heart of the matter:

    Comment by Michael Jensen -

  101. Man this is the most stupid and wrong assessment it could be possible to reach. Put your money into your mattress because you’re a victim of the conventional wisdom. Fortunately for the shareholders in Warner the old dinosaurs in the music biz are smarter. It may just save them. Music and vids are now free, get used to it or don’t, it won’t make a jot of difference.

    Equating youtube and torrents with the likes of napster shows a total lack of acumen.
    BTW ThePirateBay were down for less than a day, haven’t you heard, the internet routes around censorship, even in China.

    Comment by Sean -

  102. Mark,

    I got the following pitch from a PR agency for KickApps right after reading your thoughts on YouTube…I thot you & your readers might be interested:

    NBC has rolled out a redesign of its site with the addition of MyNBC- a MySpace-inspired feature that will add related videos or content to a members profile based on the members interests. This is an effort to retain users and increase the volume of traffic on the site.

    NBC isnt the first major network to consider the idea of a social networking community- both Fox and ABC have toyed with the idea, and niche networks like MTV have already created their own versions of online communities. In addition, top newspapers and magazines have debated how best to cater to their readership online.

    While the idea seems simple enough- create relevant communities so that users continue to visit your site and read your content- the implementation can be time consuming and expensive. However, a new company, Manhattan-based KickApps Corporation (, takes the hassle out of the process and creates communities for established websites quickly, efficiently, and for free.

    Comment by Elise Ackerman -

  103. Interesting article, as always. I think the one thing you overstated is the desire of consumers to use YouTube to save copyrighted material. I just don’t buy the fact that people are going to spend the time to rip YouTube streams. Its still too easy to get the content (especially audio) elsewhere.

    Now that issue is a much different issue than whether or not they will get sued. I think there is also a valid discussion to be had as to whether it helps or hurts James Blunt that there are a million self-edited videos using his song.

    Comment by Matt -

  104. You Tube is still a better business model than!!

    Comment by McMinn -

  105. YouTube will have additional problems when they try to license content. Because they are using progressive download flash they do not have access to any DRM protection and to top it off the content is stored in its entirety on the users computer. I cannot imagine that will go over well with the content providers. It is trivial to post the stored content to a fill sharing service or send it to your friends.

    Justin Madison

    Comment by Justin Madison -

  106. I disagree, and here is why – – I can go on Youtube and find anything I want. Whether it’s an old cartoon intro from when I was a kid, or John Stewart bringing the end of Tucker Carlson and Crossfire, it’s there. That coupled with original content is why people love it, and that’s why it will last.

    If it dies, it will only be because someone else is doing it better, and right now it’s not happening. and it’s not a hard thing to do for a company with resources, but everyone is dropping the ball. Yahoo, Google, and the new MSN video can’t hold a candle to youtube. It’s not as if they don’t have the resources to one-up them, so why isn’t it happening? You tell me . . . .

    Comment by Ben Parker -

  107. Like anything good on the internet. It will either go to the paying route or it will just fall off the map.

    It would be a shame for the RIAA to ruin yet another great service.


    Comment by Tom -

  108. Thank you for url. I thought for me that does not work.

    Comment by peop -

  109. All I know is that whenever there is a moment of television that I did not know was going to happen and want to see immediately, YouTube delivers. And no other media comes even close on that point. I couldn’t program TiVo to record the Zidane headbutt because i didn’t know it was going to happen. I also don’t want to wait until some random channel finally decides to play it. I want to see it right now. And YouTube shows it to me right now and as many times as I want. This should be a wake-up call to other forms of media.

    A quick comment on your movie challenge, I think people put more importance in the story of a movie than marketers would think, and it often leads to suprising box-office results. ‘Step up’ was a story that people wanted to be told. ‘Snakes on a Plane’ clearly wasn’t. I think that the gimmicks surrounding movie releases do not have as much impact as whether or not people are interested in the story. When the average moviegoer say: “Oh! I wanna see that”, they say that based on the story.

    I just think you need more appealing movie stories and people will come in masses. They do, once or twice a year when something’s actually worth seeing.

    Comment by Louis P. -

  110. Mark,

    I suspect it will be quite easy for YouTube to figure out which videos have WMG songs in them. Digital fingerprinting technology is pretty good at identifying specific recordings, so they just have to run uploaded videos through fingerprinting software. Similar to how ASCAP identifies songs played on the radio these days. The software may miss the cases when a song is playing ambiently in the background of a home video, but they’ll probably catch a lot of uses, especially the ones similar to your Daniel Powter example.

    Comment by Oren -

  111. I’m a little confused… and as another Mark pointed out before, wouldn’t copyright infingement law apply to other video streaming sites as well, and therefore also put the likes of google at risk from legal procedings? The same user generated content with copyrighted music is plastered over both Google and YouTube. For example the Shakira spoof video’s can be viewed on both, assuming Google exec’s haven’t haven’t been rushing around signing deals with Universal, both sites infringe the law.

    Comment by Mark -

    Thenks for URL

    Comment by Groov -

  113. For the most part I always find Mark to be an interesting read and more importantly highly accurate with his takes on technology. He has a high level view of technology and business and rightly so since he has made himself billions (and countless others millions.) This youtube blog however is to me a perfect example of how a high level view of these things is not always practical or even realistic. While I’m not able to argue the complexities of copyright law I can say without a doubt that a) copyright owners will not ever run a site with user modified content (one word: LAME) and b) the suggestion that people will or do visit youtube for audio content (and creating playlists or ripping the music) is laughable.

    It’s stuff like this that makes me realize how some things can sound great in a board room but flop with consumers and convinces me that there’s still a place for common people to be entreprenuers. I think mark forgot to put his consumer hat on for this one.

    Comment by brian -

  114. We also need to consider that YouTube is still a growing organisation. Just like Google, it will seek to find other areas in which to grow and this potentially could be very exciting. However, a word of caution, just because they hip at this moment in time does not mean that it will carry on. If they are going to start doing something different it should be soon. The more they link in with the large music groups, the more they are going to look like they are buying into corporate culture and the less interested some of the youth, who are their prime users, will be in them. It is very hard to be cool/hip when you become part of a multi-organisational buearocracy.

    Comment by Mark Claydon -

  115. Youtube has chosen a risky route to widespread adoption and is vulnerable to copyright claims. However, with Napster, it was about taking a specific discrete product and developing a separate illegal distribution channel for that product. Youtube has videos with songs used in a user generated context, resulting in a new product. So yes, the record companies can claim infringement and break up the party. But forward thinking record companies should analyze this beyond surface legal level. Some will look at this new space and say this is how consumers are using AND CELEBRATING our product — and that adds to its popularity (marketing our product — remember Mark, you were looking for cheaper ways to market your movie content product — you could put trailers on Youtube, or allow users to add content for your trailers). Youtube is too clunky to be a new distribution channel — users are thrilled with paying for itunes and Rhapsody and won’t suddenly drop them to scrounge for their music on Youtube. If someone had a party for 50 people and charged a buck at the door, a record company would not rush in say STOP playing our music — they would see it as a victory and positively growing the market and spreading the word of their great music product. If forward thinking record companies look at Youtube as the extension of the party — which is pretty accurate in for today’s digitally connected youth market — than they can take a fresh look at how to create an alliance with Youtube and leverage them in a positive manner. Looked at this way, their real risk is not on the distribution side, but the supply side — the artists. They are saying “why do I need a record company?” Every day we get closer to the day when we will see a new megastar that did it on their own or with a new digital community promoter through myspace/youtube and others. We also get closer to the day when a big name recording star says my name is bigger than any record company — a new digital promoter says he will take me higher without them.

    So the real question is — will Youtube be chopped down as an illegal pirate as was Napster, or will it grow strong in forest and change the ecosystem around it? Even if it falls, the forest is changed forever — Google/Microsoft video — although they are fully accountable to all copyright issues and have to tread more carefully — but Steve Jobs did it with itunes. Most likely scenario is that copyright risk factor will close in, and they will sell not to a top player like Google/Microsoft that will grow their own, but to a secondary player like AOL or News Corp. that wants to get into the game quickly.

    Comment by Jim -


    Comment by suhaim -

  117. Most sites can be reduced down to a “core” i.e., providing hosting space etc, and, as this blog shows, YouTube is like any other. The key thing with YouTube is the appetite for the music companies to litigate. Previously, they went for the likes of Napster since they were allowing digital copies of the music to be passed around for free. YouTube is different to a degree and Daniel Powter’s music is a good example – many of the individuals concerned have actually been creative with the music – combined it with artwork/images etc. It is no longer just about the music but the whole package. It does not make the infringement of the copyright disappear but it does change it, from a potentially moral perspective, to a personal representation of someones thoughts/feelings/emotions i.e., an artistic expression. Of course you can take legal action against the individuals, or YouTube, but surely the music in part is designed to impart/create feelings within individuals who purchased it? Of course, the use of Daniel Powter’s work to generate works of great artistic merit is, as they say, a debatable subject area!!……..

    Comment by Mark Claydon -

  118. We may be entering a period in which “big media” begins to recognize the futility of endless litigation. So, now, they may be more interested in partnering with the youtube’s of the world, as opposed to massacring them.

    Comment by Charles -

  119. The vast majority of clips I view on youtube are copyrighted material that shouldn’t be there. I don’t mean jailbait dancing to Shakira’s new song, but actual tv clips, music videos, or scenes from movies (search for the name of any show to see what I mean – Dateline interviews, bits from Conan, etc..). There’s also the endless viral homemade video clips for which the original creator either doesn’t have the means or desire to enforce copyright law.

    What remains to be seen is if there is a business in hosting original content. Video blogging, short movie clips created for the purpose of hosting on youtube.

    If there is a business in hosting such original content then at the very least when the copyrighted content train grinds to halt for youtube they will have that to fall back on…. and they’ll be doing it as a household name. Something they likely wouldn’t have achieved if they were to have enforced copyright law from the beginning.

    Youtube is a new company that has soared to internet super stardom in a short period of time. It’s only natural that they will still be trying to find out what part of this enormous monster they have created is useful and sustainable.

    Comment by Tom -

  120. Who’s is going to sue Youtube? NBC? showtime? Paris Hilton?
    they already have their own channels in the site

    Comment by Rafael -

  121. If this is true for youtube……..what about google and all the others?

    why are people only talking about suing the start-up? If this argument is to have any credibility, it has be talking about suing google.


    Comment by Tom -

  122. Warner Music Group’s deal with YouTube pretty much validates the platform and genre in general. True we don’t know the details but cooler heads are seeing the writing on the wall. I’m seeing video shared widely in my social group and I’m over 40.
    My kids like to share funny videos. No stopping it now!

    Comment by Mikem -

  123. You see, Mark, why you’re wrong is because the internets is a series of tubes, and whether it’s you tube or my tube, well, I mean, that’s a lot of tubes…and they’re all getting clogged up 😉

    You’re dead on on this one Mark . . . send me an internet, we’ll chat.

    Comment by Brian -

  124. The problem that I see is that those that are making these decisions to sue companies over “copyright infringement” are completely out of touch with the new world around them. In the frenzy to control copyrights, those in charge of the major media outlets forget that “free” access to music and video programming has been the staple on american life since the 1950’s.

    I can turn on the radio and for “free” (not counting commercials) I can hear someone in LA’s idea of the top 10 songs. Or I could turn on Rapshody on my computer and see what my circle of friends’ top 10 songs are. Which do you think will encourage me, the comsumer to purchace your product? I can tell you right now it isn’t going to be Justin Timberlake, Fergie or the Pussycat Dolls.

    As for, the media companies once again missed a great oppertunity to reach viewers. Instead of suing, here are two ways I can see a major media company utilizing youtube to their benefit:

    1. Music Videos. These are basically commercials for the album/single. They play on mtv for free, so why not youtube? Is it REALLY taking money out of Fergie’s pocket having her video up on youtube, or could it be an oppertunity to generate interest in her and her single? I imagine sending a link to her video to your friends or including a link to it in your blog will reach many more interested people than telling your friend “You gotta watch MTV and wait and then you’ll see it, it’s awesome!”. Word of mouth is the lifeblood of music, and no one can market you better than your fans.

    2. TV Show previews/premieres/Behind the Scenes. On Comcast on demand I can see the premiere of an episode of “The Wire” before it actually airs on HBO. I subscribe to that service, and would probably do the same if more content that I was interested in was available (hmm, subscriptions for additional/exclusive content? Nah, that’ll never work). How about offering a sneek peek at a new show, or interviews with the actors? Or, in the case of Saturday Night Live, why not allow users to spread that hilarious skit about “red vines and Narnia” to all their friends, exposing this hilarious skit to those (like me) who had written SNL off in recent years.

    Additionally, why not make the 100’s of cancelled shows available to the public via a site such as youtube? I’d pay a small fee to relive the days of “Mr. Belvedere” and “Automan” once in a while. ZDnet already does this with the “Max Headroom” series on YouTube.

    OK, so there’s two ideas. Mark, you have the pockets, make it happen and I’ll split the profits 50-50. Heh.

    Comment by Ian -

  125. For what it’s worth, 86 of the top 100 videos in July were user generated (thus it is assumed that there is no infringement).

    Comment by Tim Marman -

  126. Actually, an interesting side effect of legal action against YouTube and its users could be getting Fair Use laws and precident cleaned up. Right now, “clearing rights” when you create new content is a ridiculous process… one frame of copyrighted content could land you in court. If uncle Jim starts getting sued becuase there’s a snippet of The Simpsons playing on the TV in the background of his home movie, some outrage might result. And maybe even catch on.

    Comment by Erik Carlseen -

  127. Yes and yes. Finally someone said it. My money’s on google for this game.

    Comment by Arjun -

  128. Hi Mark,

    I am not convinced that someone is violating copyright law when they distribute a home video of grandma dancing to a song, because you can’t prove that people watch it because of the song.

    What happens when someone catches their grandma on film drinking a Coke and listening to Tricky, and there just happens to be a donkey show in the living room? And when grandma puts down the Coke on the table, the camera angle makes it look as if the Coke is resting on top of the donkey’s back.. And then the video become viral and millions of people start making viral Coke Donkey Show spoofs?

    Will Greenpeace sue on behalf of donkey’s because coke has a reputation of lewd viral videos? Will Coke sue because it should have been a polar bear? Will Tricky get sued because he used it as his next album cover. Pathetic.

    Thanks, nice article btw!

    Comment by Ben Long -

  129. This RIAA is killing everything, who wants to share something. They closed eDonkey! 🙁

    Comment by Hard Boiled -

  130. Maybe video and audio aren’t as closely married as we thought. Maybe will just grow and transform into something even better.

    Maybe not.

    I’m still all for youtube, but only because I have a tiny company that needs the help. If I didn’t need the traffic and sharing ability, I would go at my enterprises via a different route… I think youtube is infectious with the literary culture I’m trying to reach. So I use it.

    Just for posterity’s sake and so you can make a mental note. I found your blog from the book, Naked Conversations. -n.l.

    Comment by n.l. -

  131. Lame comparison to Napster. Doesn’t compare. If the recording companies had treated Napster like Hollywood is treating YouTube, everything would have turned out different. YouTube’s innovations within a traditional business model (advertising-supported) are without peer and in this regard they are also no comparison to Napster. YouTube is seen as a parasite and the large media co’s are the host, but I think you’ll start to see these roles reverse in a few years.

    Comment by Michael Martine -

  132. “So just search for the songs, create a playlist, minimize the window and play all your favorite songs as often as you want. For free. And of course if you have no fear for the copyright police, you can use tuberaider and keep a copy.”

    Do you have any evidence that this actually happens? Kids are way more sophisticated than this. It sounds like something a lawyer or over-40 came up with (maybe even an over-40 lawyer!). It’s completely bassackwards and about as user friendly as a punch in the face. MySpace and PureVolume have way more music at much better quality and with a real searching interface.

    This sounds like about as big of a problem as people DVRing MTV so they don’t have to buy CDs… I’m calling bullshit on this one.

    Comment by Jon Gales -

  133. I don’t have too much knowledge about youtube, but the few times I’ve visited it has been for the short home videos, those are far more entertaining than any professionally produced anyways. Even if the copyright owners sue I don’t think it would hit them too hard.

    Comment by chainsaw -

  134. I’m just curious, since lots of people have weighed in on this, but does anyone have an on-point, unequivocal legal precedent that says “If I make a minute long video of me dancing to a portion of a copyrighted work, I’m violating that copyright” I’m not saying this facetiously, because I wouldn’t be at all surprised if no such precedent doesn’t actually exist. This isn’t to say that a court WOULDN’T find it a violation, or that the attrition argument of copyright ligitation isn’t significan’t. But people are overlooking the fact that with Napster virtually ALL of the copyright infringement was on complete works: songs, albums, movies, etc. I’m not sure that the law is as clear on what happens if you take a portion of a copyrighted work, add content/repurpose it and create something original.

    I can’t go into a library, borrow a book, type the whole thing into my word processor and then post it wholesale on the Internet. If I’m writing a paper, however, and take a portion of the work for other purposes, the law becomes much less clear. So while posting an entire episode of a TV show may be infringment, posting a short clip for the purposes of public commentary/review may fall under some version of Fair Use. I’m not a legal scholar, but I’d be interested to hear the counterarguments to my statements.

    Comment by Ali Nagib -

  135. Here is my off the cuff reaction: I think that the Time-Warner deal will make it unlikely that Time-Warner will sue, for obvious reasons. However, if I were a Time-Warner competitor I would sue YouTube.comespecially nownot to protect my own content but to take a pot shot at Time-Warner.

    Comment by TMS -

  136. Mark, blogs such as this show how it is that we are moving towards a corporate-ruled society. I mean the problem, the thing that you failed to touch upon, is the notion that there is nothing Nefarious about YouTube, at least not in the sense of community. Yes, there is rampant copyright infringement going on, but I don’t believe that it will move to the extent that you prophesize here.

    YouTube IS THE REASON THE INTERWEB EXISTS! This collection of tubes that make up the internets is a conduit to bring our world closer. Since the proliferation of the World Wide Web, the world has indeed become that much closer. Having fanmade videos using music we all know and love sets a sense of kinship between people regardless of culture, nationality or anything else you can think of. THIS is why YouTube is so popular.

    I am sick of having to deal with the reality that corporations are actively putting a price on community. But at the same time, I realize how all this can be returned to piracy, because it’s all about the dollars, I know and accept that.

    At this point, I would rather have the Internet be collapsed than have to deal with the commercialism of it. DRM and the RIAA make me hate loving music. Soon, if we sing our favorite song, we will have to pay for the right to do so. The idea of enjoyment has been eclipsed by turning a buck.

    If YouTube falls, something will take its place, and people will still follow.

    Honestly, and this is something for everyone to ponder: Do we listen to music and watch video because we are to enjoy it, or because we need to make sure to make sure that commerce flows uninterrupted? I think the answer to this got lost in translation long, long ago…

    Comment by Hashim Hathaway -

  137. YouTube and Warner Music sign a licensing deal.

    Comment by B Kresge -

  138. is turning into, a very large cesspool. There’s the occasional original funny video on there, but for the most part, it’s junk. And with people having the ability to change their profile page, it’s going to attract all those that can’t design a web page if their life depended on it.

    It’s a fad that will surely and slowly die off..

    Comment by Drew -

  139. Oops.

    Had you waited one more day, you might view things a tad differently…

    “Video-sharing site YouTube has signed a deal with media giant Warner Music to allow its material to be used legally.”

    Comment by MD -

  140. I don’t know about the whole Youtube thing, but I agree with the guy’s video on the Pirates. SAVE US MARK!

    Comment by Chris Brass -

  141. Agree with some of the others — they won’t be sued. Why? It’s a great ad/promotion location. Yes, companies could put these videos on their own sites but they don’t because people aren’t on *their* site – they are on YouTube.

    Comment by Alexa Smith -

  142. Burden of copyright enforcement is on the copyright owner. That said, there may be contention surrounding any technology which encourages (or looks the other way) when it comes to infringement. But this issue is less of a problem of technology (which is bounded by the laws of physics) and more a general problem with the system of copyright. Sites like YouTube will force re-examination of copyright enforcement, exploration of the boundaries of “fair use,” and the consideration of alternative models of monetization or compensation. Basically it forces the untenable hand of an industry which has relied on impractical mechanisms for far too long, and taken old world market successes for granted.

    Go YouTube! The following articles explain why I think that YouTube is part of a revolution, not a “bubble” which will be burst by copyright issues:

    Rip, mix and burn culture:

    Mashups – beyond “fair use”:

    Internet freedom:

    Comment by Ian Rae -

  143. youtube may have been foreseen that issue. so, they have already a “defense” against lawsuits

    but as a viewer/user in youtube, it says “broadcast yourself”(filming yourself, your buddies, your pets, etc using your own)so it does make sense that youtube assumes that any uploaded files made by the user was user’s copyright, license, owned.
    and as long as it is not offensive it’s safe.

    Comment by ikabon -

  144. Damn it Mark. Why do have to be so right all the time?

    Comment by Rebeccalee Coventry -

  145. Chris Tew: Frankly, I’m tired of hearing everybody talk about how companies like Google didn’t have a monetization model when they started. Most companies that are unable to develop a proper business model fail. Companies like Google are the exception, not the rule. If you start a business without any semblance of a business model and think that you’re going to eventually figure it out because Google did, you’re in for a surprise. In YouTube’s case, they have less time to figure out how to monetize because their operational costs are so high. As Mark noted, they are basically a hosting company that is offering to host the most bandwidth-intensive content for free. Great deal for me!

    You are absolutely correct that YouTube has a massive audience, but when publicly-traded companies make major acquisitions their valuations aren’t based on Alexa traffic rankings. They’re based on revenues and earnings. Anybody want to guess what revenue multiple it would take to get YouTube $1 billion? Do note that Viacoms new CEO Phillipe Dauman recently told the Financial Times that Viacom will not be pursuing any major acquisitions because of fears that they will overpay and hurt shareholder value. There appears to be a shift in the thinking out there. Media companies are going to be looking to acquire smaller, promising startups earlier on in their development when they can be bought cheaply.

    Let’s not forget that YouTube hasn’t done anything remarkable. Any business that gives stuff (like massive bandwidth) away for free can easily become quite popular. How hard was it for Napster to become popular? Giving away something that people want and normally have to pay for is a good road to follow if you want to get popular, but it’s typically a bad road to follow if you want to build a real business.

    Somebody might buy YouTube, but I think it’d be a huge mistake. Part of YouTube’s popularity is due to the fact that it’s independent. If anything, I think the media companies will do deals like the one Warner just announced, which forces YouTube to pay them and puts the burden on YouTube to monetize. It’s ideal for the media companies: they get paid for their content, YouTube still has to foot the bandwidth bill and the media company incurs none of the risk that would come with actually acquiring YouTube. YouTube becomes another distribution platform for their content, just like their homegrown online video services. They don’t have to acquire to get what they want.

    Comment by Drama 2.0 -

  146. This is old news

    LOS ANGELES Universal Music Group, the world’s largest record company, contends the wildly popular Web sites YouTube and MySpace are violating copyright laws by allowing users to post music videos and other content involving Universal artists.,2933,214005,00.html

    Who cares about Youtube.
    The question is how is Rupert Murdoch going to answer this.

    Comment by Dirty Muffin -

  147. YouTube is certainly interesting: 100 million free daily downloads, and as Mark says, many without legit copyright.

    But iPod had 45 million legitimate paid TV-show downloads in the past 11 months and cumulative 1.5 billion legitimate paid song downloads. And 60 million paid iPod sales. Apparently, you can compete against free pirated services if you make your service simple to use and streamlined to a single function.

    If you watch what people pay for and how they are using iPods, Apple’s new iTV wireless video system looks like a disruptor of cable TV and broadcast networks.

    Apple’s iTV system rated an A- on our Disruption Score… Details:

    Comment by Michael Urlocker -

  148. Wrong URL, the correct one is:


    Comment by Mike Radigan -

  149. More on Warner licensing music in YouTube videos

    Comment by Mike Radigan -

  150. I just read that article too Thomas. It does make the sueing argument a much weaker one. I think we can pretty much guarentee will get sued by someone, and probably more than once. But I dont see it bringing them down.

    Quote from Commentor Drama 2.0: “How would they justify to their shareholders spending $1 billion on something that could be cloned for less than $100,000 and that introduces the company to potentially huge legal liabilities?”
    The answer is simple, they as of today the 14th biggest site on the internet (millions of users everyday). Just Reproducing the technology will not get that sort of branding and popularity.

    The cost of bandwidth and YouTube showing no way to monetize on the traffic just yet is still the biggest issue.
    But lets not remember when Google first started they had no proper idea on how to monetize on their technology.

    Comment by Chris Tew -

  151. Hey Mark

    I just read the following article about how Warner will actually be sending its own videos through YouTube, instead of taking legal actions. Apparently this also includes licencing their music for any homemade videos. If this is indeed true, then it will be a fantastic first step in the right direction. Maybe the record and movie studios are finally learning…

    Comment by Thomas -

  152. Interesting thoughts on youtube.

    What do you think about the Chinese youtube Clone site, I imagine that site will have way more traffic than youtube eventually.

    And far less restrictions.

    Comment by The Redneck -

  153. Legal action will come the way to Youtube just like it did with Napster, but their brand links viewing videos on the Web commonplace, and its becoming stronger as each day goes by. I would suspect the new media companies who own the writes to these videos will figure out a way to purchase Youtube, instead of killing it off as was did with Napster. When Bertelsmann eventually bought Napster the brand was being tarnished and new file sharing programs came about. Mark, Youtubes brand and service will not just disappear!

    Comment by Andrew Beckman -

  154. Hey… just a question here, but how is any different?

    It would seem that Sergey and Larry have left the door wide open to litigation with this too.

    What about Google Current TV and their View Created Content?

    Comment by Mark -

  155. Mark’s assessment is spot on. The copyright issue may be one of the primary reasons that no major media company has purchased YouTube. If News Corp. purchased YouTube, for example, do you think a competitor like Viacom (which owns MTV), would not seize the opportunity to sue? It would be costly for both companies, but the fear that it could happen is probably one of the reasons nobody has acquired YouTube. Instead, media companies seem to be building their own online video services (see AOL Uncut). And why not? They already own huge content catalogs and the YouTube technology is a commodity that can be duplicated very cheaply. How would they justify to their shareholders spending $1 billion on something that could be cloned for less than $100,000 and that introduces the company to potentially huge legal liabilities?

    The DCMA is not as black and white as some posters here have stated. In the Napster case, a lot hinged on whether or not the court believed that there were enough non-infringing uses of the service. The court was of the belief that Napster was filled with infringing content and non-infringing content was minimal. It also wanted Napster to implement other technology that would be more proactive in preventing abuse.

    YouTube, in my opinion, certainly has non-infringing uses and might eventually successfully defend a lawsuit, but this ignores the real point, which is that a lawsuit will force YouTube to spend millions of dollars on legal fees. In the American legal system, “justice” doesn’t always prevail. The party that has the financial resources to bleed the other party dry typically does.

    YouTube is already burning through money providing hosting/bandwidth free of charge. If one or two major media companies sue them, it could put them out of business. Do you think there will be any VCs willing to invest millions of dollars in YouTube at what is surely an outrageous valuation, knowing that those millions of dollars will go straight into the pockets of attorneys? At that point the business loses all appeal to investors and potential acquirers and you know the rest.

    Comment by Drama 2.0 -

  156. Mark, you’re just jealous and angry that YOU didn’t think of YouTube. With all your billions and your experience in broadcasting over the Internets, you missed the opportunity of a lifetime to add a few more billion to your name and you just can’t stand it can you Mark? Hmmmmmmm?

    But, I’ll do you a favour Mark (probably the last time I do a billionaire a favour, so I hope you read the responses to your “blog”) and explain why YouTube is not getting sued. It hasn’t been sued because it’s a great advertising tool and a great way to build brand identity and differentiation, and a great way to get to get fans of your product to invest more in the product and evangelize your product. No ones going to sit there and build a video playlist and minimize the screen to hear songs because:
    a) the quality ain’t there
    b) you can get high quality versions of those songs elsewhere for free (pirates) or for minimal cash (iTunes)

    What will happen is that you’ll hear a cool song in a fan video and check it out and get the album. Which I have done twice already! Yes, that’s right, YouTube videos featured cool songs that I tracked down and purchased. And that Mark, is why YouTube has not been sued and why you are fuming.

    Comment by Jacob -

  157. Mark,

    One of the reasons why Youtube caught on so quickly is that their videos play VERY quickly. It’s like night and day between youtube videos and those on mtv overdrive, cbs, aol, etc. Most people don’t have the patience or the know how to figure out how to get videos to work. Youtube made it obscenely easy.

    I don’t think the site is going to be around in it’s current form in the next few years. There’s too many copyrighted videos, its growing too fast, there’s alot of money at stake and the old line media companies are going to continue to think to themselves..(but we’re losing money here!).

    I’m suprised there’s still so much copyrighted material on there. The rules can be changed. Some of these clips have more views than on cable. How long can that last? As the TV world continues to fracture and splinter into a thousand pieces, some executive is going to say….”what a minute! What about that #$& youtube?!? They’re ruining this channel…”

    And there goes the party….

    Comment by John -

  158. what next? i can’t host a picture of me standing in fron of mcdolalds in flickr?

    Comment by i-ming -


    Google is going to win this one.

    Comment by Sam Purtill -

  160. I’ve often wondered about the presence of copyrighted material that I’ve seen on YouTube. I’ve seen some uploads that appeared to be posted by the ZDNet and other copyright holders. As you mentioned, “Bad Day” has undoubtedly been used without proper compensation more than its share. One question might be whether pursuing whatever settlement could be had for these violations outweighs the benefit to the copyright holder of having millions of people potentially exposed to the snippets.

    (Especially given that this is not lost revenue for use that would have otherwise been paid for. If the user would have found another song to use, or woukd have chosen not to post a video because of the licensing rather than have paid for the rights if presented with that business model, it’s not fair to count that as lost revenue.

    Given the complexity of music licensing, unless that model were introduced (again, the industry is behind the technology) and ignored, it seems a stretch to call in the FBI again on this one.

    What should be very interesting to watch is what derivative works are introduced from YouTube content. While the T&Cs are clear in communicating the expectation that all copyright issues are the responsibility of the poster, they also explain that YouTube has virtually unlimited free use of the posted content without the obligation to compensate the poster of the content.

    According to the T&Cs, ” by submitting the User Submissions to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website and YouTube’s (and its successor’s) business, including without limitation for promoting and redistributing part or all of the YouTube Website (and derivative works thereof) in any media formats and through any media channels.”

    Compiling a huge library of content for distribution in other media, similar to its recent projects with MTv may be one of the ways that we will see youtube profit while balancing the concerns of artists while still meeting the customer demand for a free and easy to use service that lets them share videos.

    Here’s a radical thought: If copyright holders police the use of their own content themselves, they could make the individual business decisions about the use of their work for themselves. The likely scenario then could be that the users end up being the ones without a share of the profit from those “derivative works.”

    Best regards,


    BTW, I saw The Jacket last night. Very impressive!

    Susan :^)

    Comment by Susan F. Heywood -

  161. If you remove the hyperized hyperbole from your argument, the fact…I said fact…remains that YouTube is not primarily copyright violating content. If every video that actually – note I said actually, not “potentially” – violated copyright was removed, there would still be millions of videos to watch and embed and have fun with.

    The real reason YouTube may die is that bandwidth bill. They still haven’t figured out a way to monetize it.

    Comment by JimK -

  162. Because YouTube does have a DMCA takedown policy in place, most legal experts have opined that YouTube, as a hosting service, is not liable for copyright infringement of its users unless the copyright owner does not ask them to take it down. They have statutory protection from liability of their users’ activities (under the DMCA, I believe). Any lawyers who know, feel free to clarify/correct as necessary.

    Of course, just because YouTube would win a case does not mean that it couldn’t be sued, and defending such cases could become expensive.

    You also bring up a good point about copyrighted material being illegally used. It’s technically illegal for me to sing “Happy Birthday” to my mom and then post said video on Youtube (or anywhere on the internet, for that matter) without a license with “Happy Birthday”‘s copyright owner. Of course, this is ridiculous, and an example of how the specifics of intellectual property law have not appropriately adapted to the changes in today’s society. Like the Sony Betamax in the 1970’s, Youtube is a technology which facilitates copyright infringement as interpreted by current copyright law, but should be recognized for its value for creating new markets that will benefit even the original copyright owners, and copyright law should evolve to better fit the information age. After all, the purpose of IP law as spelled out in our Constitution is to promote the progress of science and the arts, not to squeeze the maximum profit for the rights owner at the expense of society.

    Comment by Shane -

  163. I guess time will tell if you are right or not Mark. Personally I am rooting for YouTube to make it.

    Comment by Antonio Howell -

  164. YouTube will fall under the same ruling that the P2P networks have in recent months. YouTube has less ground to stand on than the P2P networks in that they actually host the video in question, its on their servers, whereas P2P networks just bridge users together whom are looking for similar content, no data is stored on the network’s servers.

    Mark is right on this one (as if he’s really ever wrong).

    Comment by Sean Foushee -

  165. ahem. youtube is, really, even not noticed by many of the practical users. I even think sometimes there is no use making such a fuss out of them, even for telling them “goodbye”, because many didn’t even say “hello”

    Comment by fisher -

  166. Nobody is going to sue youtube. All the copyright holder has to do is complain to youtube and they take down the copyrighted material.

    A clever policy which relives them of the chore of monitoring content . . . putting chore upon the copyright holder.

    Comment by Norm Gregory -

  167. Mark, I’m not exactly sure about the DMCA act but doesn’t the law shift the burden of legality/illegality on the users. I see Youtube on the same line as Ebay. They both have illegal content on them but any lawsuits or charges are wholly shifted to the user.

    Comment by Chelsea Brandon -

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