Goodbye Warner Music! A step back in the evolution of YouTube

Written on 22nd December 2008                                                                                                              3 COMMENTS
Ernst-Jan Pfauth, editor in chief

Last August, we celebrated companies like Lionsgate, CBS, Universal Music, and Electronic Arts who realized that people using their products for YouTube videos weren’t pirates, but just fans. Instead of hurting their brands, the mash-ups are boosting the company’s brand experience. Therefore, these major companies have been enrolled in an YouTube advertising program.

Whenever somebody uploads a movie which violates one of these companies’ copyright, YouTube offers them the possibility to view the video stats and to run ads. Yeah! A classic win-win model. Media company profits, user has an outlet for his creativity, and YouTube remains the video platform.

No more Madonna on YouTube?

Unfortunately, one of the major players lost faith in this construction and abandoned the program. We’re talking about Warner Music, and therefore about superstars like Led Zeppelin, Madonna, TI, Eric Clapton, REM, Red Hot Chili Peppers, and the Grateful Dead. None of them will be able to use YouTube as a platform for their music.

Details are undisclosed, but it sure is a pity. A step back, really. Here’s Warner Music’s explanation:

“We are working actively to find a resolution with YouTube that would enable the return of our artists’ content to the site. [..] Until then, we simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide.”

Surprisingly enough, Universal Music’s digital chief Rio Caraeff recently raved about how much revenue the YouTube deal generated. He talked in terms of “tens of millions of dollars” and a rise of 80 percent compared to last year. Stories like this one are stimulating, which makes the withdraw of Warner Music even more painful. Let’s just hope it’s part of the negotiations.

[Via Cnet News]

CNET Networks, electronic arts, Universal Music Group, Warner Music Group, youtube

3 Comments »

Some media companies finally get it and profit from illegal YouTube movies

Written on 18th August 2008                                                                                                              2 COMMENTS
Ernst-Jan Pfauth, editor in chief

“For the most part, people who are uploading videos are fans of our movies. They’re not trying to be evil pirates, and they’re not trying to get revenue from it.”

There you go! See? It isn’t that hard to say goodbye to that negative “the digital revolution is gonna kill us” attitude. The man who said the above words to The New York Times really gets it: Curt Marvis, the president of digital media at Lionsgate Entertainment. His company doesn’t remove illegal YouTube movies, but prefers to profit from it. YouTube offers them the possibility to profit from the advertisements on the video page and shows a little banner, saying Lionsgate Entertainment owns the movie.

Indirect profit

CBS, Universal Music, Electronic Arts and some other participating companies won’t make millions of dollars from this unconventional advertising program. Since the ads only appear on a fraction of all the YouTube videos and most of them hardly track a hundred views. But it’s not so much about direct profit here, but more about indirect profit.

With the media companies allowing mash-ups of content they own the copyright of, fan subcultures can flourish. Every YouTube user can create his own trailer of his favorite movie or give the storyline a twist. Some become real hits. So while the media companies are making a few pennies from the ads directly, they indirectly boost sales via web hypes.

Not everybody is convinced

Not all of world’s media giants are convinced by YouTube. Time Warner and Murdoch’s News Corporation are willing, since they acknowledge testing the new advertisement model, but still a bit afraid. Disney and NBC Universal prefer to see visitors of illegal movie pages automatically forward to their own videos.

But the worst and most old-fashioned of all is Viacom. They’re still busy lining up the 1 billion dollars copyright infringement case against YouTube. If the company wins, the billion dollars might compensate some of Viacom’s losses on sales. But what about the future? How will they boost sales in five years? They’d better start to get used to the new age and profit from it, just like some of their competitors do.

cbs, disney, electronic arts, lionsgate, nbc universal, news corporation, time warner, Viacom, youtube

2 Comments »