Call it reverse blackmail, call it a crafty business move, but whatever you call it, you can’t be so sure YouTube’s increasingly cozy relationship with the big broadcasting companies will be beneficial in the long run.
According to an interesting and quite speculative piece from Jon Fine in the latest issue of Business Week:
Google (GOOG ) and YouTube are dangling nine-figure sums in front of major programming and network players–that is, the Time Warners, News Corp (NWS )s, and NBC Universals of the world. Google calls these monies licensing fees, according to executives who’ve been involved in the discussions. 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.
Fine and his sources posit a couple possibilities here. One, if we’re really talkin’ a minimum $100 million “hey, lay off” pay-off, why not take it? That, however, only bolsters YouTube’s legitimacy and dominance in the Web video world. Which leads to another scenario: the network heavies (pun intended? Hmmm….) working together to create one big online hub for their stuff in an effort to knock YouTube off its pedestal.
Yeah, right, that’ll happen. Fine’s pretty skeptical, too: “believing that 5 or 10 of them can grind through nightmarish cross-corporate decision-making and emerge with something as simple and compelling as YouTube is nuts,” he writes. Of course it is. The newspaper industry is cracking under the pressure of shifting media consumption and can no longer rely upon strong print ad revenues like they used to. The closest they’ve gotten recently to banding together is aligning with Yahoo to distribute classifieds. Baby steps. These rivalries go way back.
But at the rate things are going, I can’t help but wonder if YouTube could end up morphing into just such a place, now that it’s in-bed with NBC, CBS, Sony BMG Music Entertainment, Universal Music Group, and Warner, not to mention MTV and agency Deep Focus, which works with entertainment firms like HBO and Dimension Films.
And not only is the video powerhouse housing and helping distribute big entertainment company productions, it’s supposedly giving them access to its content filtering system, enabling the DRM-obsessed content producers to nix YouTube videos featuring their TV shows, music, film clips, etc. if they’re not happy with how they’re used.
Fact is, what made YouTube cool is its rule-flouting attitude. Put whatever you want here, share it with whomever you want, we don’t care! It took less than a year for them to go from affirming their street cred by pissing off NBC over the Lazy Sunday brouhaha to opening their Tubularms wide to embrace the stodgy old media suits when they finally came around, tails between legs.
How long will it take before YouTube becomes the DRM Gestapo? Sure, there’s a chance that working together with the big entertainment firms will help to loosen their grips more than tighten YouTube’s, but now that the company is beholden to advertisers (sometimes those very entertainment firms) and its newly-adoptive public parent, YouTube’s easy-going ‘tude is bound to change. That’s when the wilier unchained guys swoop in.
Yes, YouTube is today’s online video giant, but there are plenty of beaten Brobdingnagians cluttering up the Web graveyard, and most of ’em tumbled while looking upwards to the cash gods rather than watching their behinds.