IP Democracy: How Do You Solve a Problem Like YouTube?

The New York Times’ Saul Hansell has this piece today about YouTube, its meteroic popularity and the difficulty in finding a business model that will allow YouTube to sufficiently monetize itself. The hot site cuts across so many boundaries, with unauthorized copyrighted material vying for viewers’ attention right alongside homemade viral videos.

Because of its resemblance to music file-sharing Napster in its early days, many people think YouTube is going to go down in flames, making any forward progression of the site’s business development impossible.

“It is absolutely reminiscent of Napster,” Mr. [billionaire and web video pioneer Mark] Cuban said in an interview. “It’s nice that they say ‘it’s different this time,’ but it’s not.”

While it continually amasses millions of new users each month, YouTube is trying to find a path to profitability. The company hopes that its recent deal with Warner Music, under which YouTube will share ad revenue with the record company based on a new tool that allows it to detect Warner’s copyrighted material, will blaze a new trail. Warner seems to agree.

Alex Zubillaga, Warner’s executive vice president for digital strategy, said in an interview that these problems could be solved. “This is a framework that allows us to monetize our assets while we unleash the creativity of the user,” he said.

Warner, he said, is reaching out to other major media companies to negotiate how royalties from YouTube will be split in cases where more than one song or video program is included on one clip.

And yet, most traditional media companies are torn about the video mega-force.

“The yin and yang of working with YouTube is you want to use them as a way to promote our programs but we don’t want to give away the store,” said John Miller, the chief marketing officer of NBC Universal television. NBC has bought advertising on YouTube and uploaded clips promoting shows like “The Office.” And it has also actively demanded that the site take down clips from “Saturday Night Live.”

Posted by Cynthia Brumfield on September 30, 2006 5:20 PM to IP Democracy