YouTube / Google Commentary
by DT - October 18th, 2006 11:59 am
Google’s extraordinarily costly acquisition of YouTube.com has disturbed many communications industry observers.
“Just a vast collection of three-minute-and-under amateur videosâ€
was how the expensive purchase was decried to me by one professional cynic
The not-quite-one-year-old site’s video-sharing platform is undoubtedly impressive. It’s clean, fast and easy to use, just like its new parent’s search engine. But is it worth $1.65 billion? Merrill Lynch, who we might expect to know the value of everything, have estimated that Google wouldn’t have paid more than $100 million for the technology alone. It’s the vast audience, about 34 million, that Google was clearly coughing up for.
To many, Rupert Murdoch’s News International seemed profligate when last year it paid $580 million (now a rather paltry sum, don’t you think?) for MySpace.com. I recall an oddly slow-witted British reporter asking Murdoch how he possibly intended to make money out of a web venue where young people simply hung out virtually and shared their interests. There was a memorable pause before the down-to-earth magnate said simply: “Selling advertisingâ€. (emphasis added by Admin)
So look out for Google placing 15- and 30-second pre-roll commercials onto those otherwise commercially innocent videos at YouTube. And for the largely youthful audience deciding whether it’s riled or entertained by this intrusion.
But meanwhile, another dimension to YouTube, less appealing than its vast user-base, continues to stimulate skepticism. “Remember Napster†is the negative cry being heard. That turn-of the-century music-sharing site was of course beaten into retreat – only to be copied later by the corporate music giants, in an insincere, and naturally fee-charging, form of flattery). And the beating came in the shape of aggressive copyright suits.
Now Google is being similarly threatened, and by no less a figure than the gargantuan Time Warner’s boss, Dick Parsons. He told the British newspaper The Guardian that his group of traditional media companies would pursue its copyright complaints against the video- sharing that YouTube practices.
The Google acquisition has not altered TW’s stance, previously expressed to You Tube before the purchase, according to Mr Parsons.
“We were going to pursue it anyway,” he said. “If you let one thing ignore your rights as an owner it makes it much more difficult to defend those rights when the next guy comes along.”
But Parsons expressed a rather more moderate tone than we heard last month from Doug Morris, the chief executive of Universal Music, who attacked YouTube (and also MySpace) as “copyright infringers” during an investors’ conference. Time Warner’s man said:
“We’d like to have our content displayed on these platforms, but on a basis that it respects our rights as the owner of that content.”
Incidentally, Warner Music, which is no longer part of Time Warner, agreed to make its music video library available to YouTube this month in one of the site’s earliest commercial agreements. The deal was followed by agreements with Sony BMG and CBS television.
And all the while, naturally enough, YouTube founder Chad Hurley is seeking to downplay people’s copyright fears.
“We’re committed to developing tools to identify the content and monetize it so they [that is, content owners] can have a new outlet for their content.”
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