As predicted… YouTube becoming less relevant after being acquired by Google

UPDATE 10/24/2006:
Whoa.  This whole thing about YouTube tacitly allowing the publication of copyrighted video content just got a LOT more interesting.  Why? 

YouTube/Google just gave a movie studio the name and details of one of its users to Paramount Pictures to file a lawsuit against.

That’s right.  Apparently the DMCA protects YouTube/Google for prosecution.  But it sure as hell doesn’t protect anyone that posts copyrighted content.  Remember – now that YouTube is part of Google, Google is effectively "turning over it’s users" for prosecution. 

Ars Technica writes:

MarketWatch says that "YouTube’s decision to help Paramount track down Moukarbel stands in stark contrast to the philosophy of Google, which has fought the U.S. Justice Department over attempts to access data about consumers who use its search services." The author all but comes out and calls upon YouTube to fight such subpoenas—just like Google did! Unfortunately, the two cases are so dissimilar as to invalidate the comparison.

When Google fought to keep its users’ search information private, it was not being served DMCA subpoenas. No copyright violation had taken place. That case, in fact, was about pornography, and people’s access to it. The subpoenas were also issued by the US government, not by the copyright holder. In fact, it’s difficult to see why the comparison was even made in the first place, except for the fact that Google just bought YouTube; mentioning the two companies in the same sentence is apparently required now, even when it makes no sense.

In an elogquently put conclusion, Ars Technica writes that, "The real surprise here is how much idealism YouTube has inspired in people, people who convinced themselves that ripping off a script to a major Hollywood film and releasing a different version onto the Internet was somehow a legitimate venture, and that YouTube would stand up for the right to do it. They did not. It doesn’t mean that they sold out or "went corporate" (all of this happened before Google was interested). It simply means they followed the law."

Sounds like some users of YouTube seriously need to "check themselves".


UPDATE 10/23/2006:
Steve Ballmer, in a conversation with BusinessWeek, nailed this on the head, and while a skeptic might say that he’s "anti-Google" biased, I’d be interested in someone contesting the accuracy of his statements.  Here’s a few choice quotes from the article:

Steve Ballmer on the value of YouTube:

[You’ve got to ask] could Google do whatever it is they’re hoping to buy without paying $1.6 billion? Is YouTube really some permanent, long-term thing, or is it a fashion? I’m not saying it is a fashion. But every time we do valuations, I wonder if we can afford to keep this hot for 10 years. I’m sure somebody at Google has got to do the same analysis, because even $1.6 billion is more than 1% of their market cap.

Is there a business model? Right now, there’s no business model for YouTube that would justify $1.6 billion. And what about the rights holders? At the end of the day, a lot of the content that’s up there is owned by somebody else.

And here’s a choice quote that everyone’s talking about on Google’s usage of funds:

“The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google. So media companies around the world are all threatened by Google. Why? Because basically Google is telling you how much of your ad revenue you get to keep.  They better get some competition.  Us.  Yahoo!.  Somebody better break through or you can short all media stocks right now. As long as there are two, you can hold onto media stocks.”


ORIGINAL POST 10/20/2006:

Mark Cuban has taken a lot of heat for stating something along the lines that "Anyone that buys YouTube is an idiot" but everyone knows deep down that he’s right.

For the folks that haven’t figured it out, YouTube wasn’t viewed as worth suing prior to it’s acquisition by Google.  After all, they really didn’t have any money – they were a start up that happened to make a lot of money by having users voluntarily break the law and upload other people’s intellectual property.

And let’s not kid ourselves:  This is the reason YouTube really has been as popular as it is.  For every "Free Hugs" video or legitimately published video that owners effectively released their IP rights by publishing the content online, there are 100’s of videos that are the property of other companies and individuals that never authorized it’s distribution, and it’s these videos that really draws people to YouTube.  From Weird Al Yankovic’s "White & Nerdy" video to the "Bill Gates’ Napoleon Dynamite" sketch… all of this stuff draws viewers and all this stuff is protected by copyright.  And this copyright is being violated.

But there really wasn’t much room to every litigate against YouTube.  After all, there wasn’t much money to be had.

Follow the money
Until Google acquired them.

Now, with YouTube’s valuation sitting at $1.6B through its acquisition and its parent company, Google, having a market capitalization of $139 BILLION DOLLARS, it becomes very attractive to target YouTube’s IP rights violations and attempt to quantify the losses associated with illegally posted IP rights violations.

Witness the first major culling of content from YouTube:

As more professionally-developed or privately-held content that is posted on YouTube is contested, YouTube will be seen as a more and more restrictive location for "sharing" content that people want and content pirates will move on to other illicit locations on the web.

Napster Redux
Gee – this sounds a lot like Napster doesn’t it?

While some might argue that "independent publishing" is still very valuable and how people get good small production types (kids with webcams for example) can get some exposure.  I’m sorry but of the millions upon millions of multimedia posts out there on YouTube, I’ve found personally that only a small subset of the independent videos out there are really "golden" relative to the rest of the garbage posted.  And trying to find those "gold nuggets" is getting harder and harder.  And boy… there are just some people that shouldn’t be allowed to own webcams.

Of course this is all subjective but the proof will be in the pudding:  If viewership drops off of YouTube, and if publishers stop using YouTube in deference to Putfile and other multimedia publishing services that aren’t placed under the same level of scrutiny as YouTube is right now, then you can bet that there are a lot of other people that feel the same way as I do.

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