December 2, 2006
Google Offering Nine Figures to Copyright Owners: The Negotiation of YouTube's Power

The drama surrounding YouTube and its copyright issues continues. BusinessWeek has written this week about plans to calm the waters between rights holders and YouTube, now that Google is "dangling nine-figure sums in front of major programming and network players," which it is calling "licensing fees," according to magazine contributor Jon Fine. He writes, "But some of them characterize the subtext like this: Don't sue us over copyrights. Take this (substantial) payment, and trust us to figure out how we'll all make serious money once we get advertising and revenue sharing worked out."

As Fine points out, the settlement to buy Google some time to figure out what to do with YouTube's copyright issues is quite a predicament for copyright holders:

"TO COMPLICATE MATTERS, no publicly traded media company today is in a position simply to dismiss, say, $100 million. Such a sum far exceeds what any single broadcast network can extract from the online world--and drops straight to the bottom line. But taking the dough fortifies an already threatening rival."

Fine points out that, try as they might, none of these media companies can join together to provide a site that is "as simple and compelling as YouTube." And he says it brings up "the YouTube version of the chicken-egg conundrum: Which party needs the other more?"

Conversely, Om Malik on GigaOM writes about the irony that, while YouTube is trying to work out these issues with copyright holders, they are cracking down on the use of their videos by competing sites, such as TinyTube. He writes, "Wow, we have come a full circle, and the notice from YouTube, a company built entirely on copyright infringement, and other people's content, seems like pot calling the kettle black. This indeed is strange, because for a minute I thought it was user generated content, not YouTube's content."

See our other related posts on recent YouTube issues here, here, and here.