Slate’s got a nice article discussing how YouTube may have fewer legal problems than many think they’ll have. The gist is that YouTube and other user content is protected under “Safe Harbor” provisions demanded by Telcos to protect…themselves.
Business week is fretting over how Google will monetize the YouTube content and whether they’ll share with Myspace owners News Corp. Myspace users have embedded tons of YouTube video content in their personal pages so this is potentially a big stream of cash for somebody. Poor Rupert Murdoch doesn’t have enough money as it is, so heaven forbid that the content producers or the users would be put first in line for a piece of the action that *they generate*.
Business Week:
Google could soon have the ability to stream ads to MySpace users who are viewing YouTube videos embedded onto their MySpace pages. The question is whether News Corp. will get a slice of that revenue, and if so, how much …
I think a more relevant question is how much of that revenue should go to those generating the content and the billion daily page views.
Sites (like Google) are doing a fine job of making it possible for Average Joe’s to find the web pages of other Average Joe’s over at Myspace who in turn does a fine job helping people build silly pages filled with videos and images from other infrastructure sites like Flickr and Youtube. They should be well compensated for this and I think 25% is a good number, with 75% of the total revenue generated going to the “users” who are generating all that content and all those page views.
“Professional” users like me already get a piece of the action from Google – about 60-70% of the ad revenue I generate at my websites comes back to me via Google Adsense payments, and I think that’s probably a fine relationship. At least until Yahoo or MSN wake up to the fact they can jump start their contextual advertising services with a temporary 100% revenue share with publishers. Then I, and a large chunk of the 43% of Google’s Adsense Revenue, will be jumping ship. Booking services only give me about 50% of the commissions I generate but that’ll trend upwards over time (ha – it used to be only 20% revenue sharing).
However it’s very intriguing how the big players in the mega money deals leave out the key people in the equation – the Average Joe user. Part of that is simply scale. An average myspace user is only generating nickels and dimes (literally) per month in ad revenue. Collectively it’s a truckload of money but individually not much and Myspace does provide a good service to the user. Win Win? Maybe, but I think the trend will be towards people valuing their own content and their eyeball time more selfishly than they do right now.
The problem with all this great people-generated content — clearly the heart and soul of the new internet — is that the people generating it are getting left in the revenue dust. There are exceptions who manage to turn a few bucks here and there from the crumbs dropped by the mega monetizers like Google, but the average Joe who blogs and posts pictures and has a Myspace page with his Youtube videos gets nothing but the use of the online tools. That searchability and infrastructure is worth something. Arguably it’s worth a lot and clearly Average Joe is happy so far getting sh** for all his content effort.
However, I think over time Average Joe will become more demanding, perhaps even having the audacity to suggest that the collective fruits of all that online labor should be shared not just among Google and friends, but shared with those who watch it all and who make it all worth watching.
John Battelle thinks Time Warner is mistaken to attack Google on copyright, writing over at Searchblog:
a shot across the bow may bring a broadside from the other side
I usually agree with John Battelle but I don’t really follow his logic here. I agree with him and Bob Dylan that “The Times They are a Changin”“, and that we need a new song to show how the old media empires don’t get the internet. I’d call that song “The Time Warner’s .. They Aren’t a Changin’ “.
However, I don’t see how bringing out the big legal beasts will hurt Time Warner. Frankly, I think they just want Google to throw money at them. As the Napster buyout proved all this has little to do with “rights”, it’s a money grab, sung as usual to the tune of that great O’Jay’s tune of years and years ago “The Love of Money” :
Money money money money ….. money!
The HUGE winners in this are the clever YouTube founders who really just created a very clever distribution system at an opportune time. The user community, and then the GoogleBucks, followed. One thing that irks me about all these mega deals – including Google itself – is that they are built on the backs of the swelling supply of (mostly) user generated content and in the case of YouTube a lot of illegally obtained copyrighted stuff. There will be little or no compensation to the *key components* of the YouTube environment other than a distribution vehicle. Now, one might argue that that exposure is enough compensation for an average YouTube uploader but it still seems…”wrong” to me.
I’d agree that those who create and then monetize these efforts should make a lot, but it’s unfortunate that people, like sheep, choose not to aggressively explore all our online alternatives. I think if we did do more exploring and innovative thinking we’d have a stronger ecosystem of companies rather than a few big players and a plethora of “also rans” standing around drooling at the prospect of a Google or Yahoo buyout.
Mark Cuban must be snickering “I told you” even though he’s already posted a note suggesting the initial lawsuits will be against small video players to set precedent for an attack on Google.
However Time Warner is already threatening to sue over videos at YouTube. Presumably Google knew all this was coming and I’m guessing they think they can sweeten the advertising revenue pot enough to keep all the copyright hounds at bay. As the best monetizer of online content I think Google will be able to buy their way out of almost all the lawsuits simply by offering to either 1) remove the offending videos, which are currently making nothing or 2) monetize the content and give the copyright holder 70% of the revenues. In most cases Google’s 70% is going to be more than 100% of what the producer could get with their own efforts.
That said, many producers are going to see this as a great legal way to shoot for Google’s deep, deep pockets. They’ll have no interest in small payouts per download or ads or anything related to their own content, though they’ll disguise that in the complaints.
I’d be very interested to know how the Google team factored this cost into the YouTube equation.
Irrational exuberance in the dot com shopping aisles?
No, it’s a chess game and Google’s winning….again.
I’m really starting to understand what seems like irrational exuberance on the part of Google and the major players. A Google aquisition of Facebook would be consistent with what Robert Scoble suggested is happening: Google is building a moat around it’s advertising business.
Steve Ballmer also suggested this notion in his recent BusinessWeek interview, ironically fretting that Google could monopolize the media business. Yikes, Steve would really run out of chairs then?
I can almost hear Ballmer to Schmidt:
“Hey Cowboy, there’s only enough room in this here internet for ONE monopoly you, you, you dirty monopolistic sonofabitch BASTARDS!”
Schmidt to Ballmer:
“HEY! DROP that chair and step AWAY from the Vista Browser!”
Google, with tons of cash to burn and a staggering market cap, has far less to lose in the high stakes internet poker game than Yahoo, Ebay, or even Microsoft. Microsoft is bigger than Google and theoretically richer, but unlike Google Microsoft has yet to figure out good ways to monetize their (improving) search services and (not improving) content services.
Ballmer’s juggling how to preserve his big ticket MS Office and Vista projects. Yahoo’s worried about plunging valuations and people leaving and the fact that a billion represents a lot more to them than it does to Google. This is almost certainly complicating the Yahoo Facebook negotiations right now. Ebay’s pretty fat and happy where they are. Meanwhile, Google can focus in laser-like fashion on keeping Google in the driver’s seat with it’s superb contextual advertising monetization.
The best defense is a good offense, so they are buying up properties to increase their control over the advertising space and keep those hundreds of millions of eyeballs out of the hands of MS and Yahoo.
Will this work? I say probably not for similar reasons it was stupid for Yahoo to buy Broadcast.com years ago. Video is junky and won’t monetize well. It’ll be more of an encumbrance to Google’s core competencies than an asset. But … things change, and in the meantime it’s fun to watch this high stakes game of chess unfold.
It’s a show you won’t see on YouTube.
Here’s a good summary of the Google YouTube deal from the New York Times. They note that one analyst suggests this is not a spreadsheet valuation as much as a way to keep competitors away from all the juicy eyeballs at YouTube.
I still just don’t understand how any big player could not put the money to better use and grow their own. I was under the impression that many used YouTube rather than Google Video because the latter took longer to post – presumably because they screened content more aggressively -I would have thought that Google Video would have tried the same configuration as YouTube before spending so much, but this also supports the idea that this was a way to keep MS and Yahoo (who is currently the video stream leader), from gaining the market share Youtube will now provide to the Google family of sites.
I don’t think this is a shark jump by Google, but I think this may go down as the most expensive “junk content” site aquisition in history.
Danny Sullivan says he does not have much to say about it over here at Search Engine Watch. (Hey, I thought you left SEW Mr. King ‘o Search Optimization?!)
It’s now almost official that Google will buy Youtube for a whopping 1.6 billion. They’ll announce it after the close today. Here’s the NYT take on things. I’d have listened to Mark Cuban because it seems to me he’s in a very unique position to analyze the prospects here, but they didn’t and soon Google will have a huge video footprint. Google Video has about 1/4 the traffic of Youtube. Combined I think they’ll dwarf the competition – at least initially, though this market, which should really be called “American’s stupidist and most mundane home videos” is still in it’s infancy.
It’s not clear to me that people will continue to spend hours and hours surfing and watching for the few gems in an ocean of crappy short clips but Google seems to think so, and it’s also true that there is an enormous amount of advertising money now spent on network TV that may flow to this venue. Google’s recent talk about NOT producing their own content and moving into offline advertising venues may relate to this decision – they want to become a key source to soak up as much of the dumb money now spent on extravagant, low ROI offline campaigns.
Over at Battelle’s House ‘o Search info he’s summarized Google Zeitgeist conference, where Google’s big news appears to be “We will NOT do content” and “We WILL do offline media advertising”.
I don’t agree with John that this means the YouTube purchase is a good idea. In fact I think Google will see the light of the dimly flickering videos and realize that monetizing this type of content won’t be worth the trouble of publishing it. But I wouldn’t bet much on my prediction they’ll pass on the deal since the cost of publishing video is dropping very fast, and Google probably has a great idea of the bottom point in terms of these costs, they may see something I can’t. Also, so much is currently wasted on traditional TV campaigns that there is a lot of “dumb money” floating around. If even a fraction of this flows to YouTube it might make that company worth it to Google.
As those of us making a living online know well the money comes from optimal monetization of content rather than the creation of the content. Google, as usual and brilliantly, is working to keep themselves in the driver’s seat as the premier way to monetize content online and moving to offline optimization.
They have the technology to optimize ROI on offline spends that (hopefully and probably) will blow many agencies out of the water. Traditional media campaigns and traditional ad agencies are a garbage dump of bad decisions and no research fueled by the ignorance of math-illiterate clients. Google has the power to change that and I’m glad they are looking in that direction.
This great sports drama follows Santiago Munez, an illegal Mexican in Los Angeles whose ability and persistence land him in tryouts for professional UK Football (soccer). The film is strong on family drama and does a great job of balancing sports scenes and the storyline. An excellent family movie with only a few implied sexual situations with secondary characters.
This is actually a pretty good “bad” science fiction film that follows the unfortunate adventures of a mosquito scientist who is infected along with a bad guy by mosquito inducing drugs. The film answers the age old question “What do you get when you combine mosquitos, radiation, humans, and blue goop”.
Joe Duck 