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Google pays the price to capture online video zeitgeist

  • 30 October 2006

The take-over of YouTube by Google has profound implications for the online video market. It follows the announcement by Warner Music Group that they will be providing their entire library of music videos to YouTube, free to watch and download. The company will share the advertising revenue with YouTube.

The democratisation of video making, and sharing, that has been driven by the growth of YouTube is astounding. The primary users of the site—and they are providers of content as much as they are its consumers—are 12 to 17-year-olds, the younger half of "Gen Y".

The site has grown, on the back of this audience, to the point where more than a hundred million clips are watched on the site every day, and further, around 65,000 videos are added daily. The numbers are staggering. The proliferation of camera phones, cheap digital cameras, and broadband internet connections has facilitated this growth. Now everyone can be an auteur, and share their work with the world.

Other media organisations, such as the American TV network NBC, have also started seeding the site with promotional videos. The logic seems to be, if they can’t stop the copyright infringements, they may as well make some money from it, and get some free promotion into the bargain. The decision marks a major shift in the way media organisations are thinking about content provision.

The deal that allowed Apple to provide video content on its fifth generation iPods was seen as revolutionary in itself—an opening of the flood gates for legal video online. The model was still user-pays, though; with YouTube, a new model is being used.

Online distribution of entertainment content will continue to grow. The moments in the sun enjoyed by Napster, then Kazaa, currently iTunes, and increasingly by YouTube, demonstrates that, as new technologies become more sophisticated and pervasive, people become accustomed to deciding how and when they consume.

The take-over has stirred particular interest as some analysts have warned that any take-over would be fraught with difficulty. The reason for this is clear. Many have warned that “big media organisations” have been waiting for a company with deep pockets to take over YouTube, and once this purchase was completed, the lawsuits would begin.

YouTube operates on a client-server model, which places much responsibility on the shoulders of the owners of the site to vet copyrighted material, and leaves it vulnerable to such lawsuits.

The so-called "viral" nature