Perspective: The promise and peril of video sharing

The other day a friend sent me a YouTube link to an incredible music video featuring the 1940s gospel singer Sister Rosetta Tharpe singing "Down by the Riverside." That's why some folks think YouTube may become the next billion-dollar Internet company.

Unfortunately, there's also a chance the video is still under copyright and put up on YouTube without the permission of the owner. That's why other folks think Hollywood's legal guns may turn YouTube into Internet roadkill, a la Napster.

If that happened, it would be a shame. Video sharing, still in its infancy, is turning into the most exciting Internet phenomenon since the emergence of digital music downloading a decade ago. People simply dig posting videos, no matter whether they are great or goofy. I know I've received and passed around any number of links of flying cats and outrageously bad Elvis impersonators.

To be sure, this vintage Tharp video might have long ago passed into the public domain. But with thousands of videos uploaded each day, the challenge for YouTube and other video file-sharing sites is to avoid repeating the obvious missteps that forced Napster out of business.

The eerily familiar argument is that this is about eyeballs and traffic and generating a user base. Profits will come later.

Sony thinks video sharing has the makings of a respectable business--and then some. Earlier in the week it agreed to spend $65 million to buy Grouper. File this under the heading of "Everybody wants to be like Rupert (Murdoch, of course)," whose $580 million acquisition of MySpace last year is looking smarter by the moment. If Sony is right about Grouper's growth prospects, the acquisition will more than offset management's current embarrassment over the exploding laptop battery fiasco that's led to big product recalls by Dell and Apple Computer.

No doubt Grouper puts up impressive numbers. The traffic tracking firm HitWise rates it No. 8 in the category. But Grouper has never turned a dime of profit. Similarly, YouTube, which was founded 18 months ago, remains in the red.

That has not fazed entertainment industry analysts from predicting YouTube could fetch as much as $1 billion in a buyout. The eerily familiar argument is that this is about eyeballs and traffic and generating a user base. Profits will come later. (For YouTube's sake, I hope so. The company's reportedly burning through $1 million a month.) With a 43 percent share of the online video market, the company commands the kind of reach that makes advertisers drool.

But might they also be drooling because they're taking hits of leftover dope from 1999? The fear is that this is just Napster redux, a case of a successful Web site ringing up enormous traffic on the strength of infringing content. Remember that at the zenith of Napster's popularity, nearly 2.8 billion files were being traded on the service by more than 26 million people globally. (Insiders say the real number was closer to 40 million.)

So far, YouTube's owners have proved to be a lot more clever than the people who ran Napster. The Napster crew did a poor job negotiating to bridge differences with the music industry. Hard to say whether it would have made any difference. Though we'll never know, we do know the story ended with a successful copyright infringement lawsuit by the Recording Industry Association of America that forced Napster to shut down in 2001.

Instead of repeating history, YouTube has cooperated with the Motion Picture Association of America. A representative of the MPAA told me that YouTube has acted like a "good corporate citizen" and worked with the trade group to take down copyright content.

All the while, YouTube continues to play for time and wait for that big payday to turn up.

Biography
Charles Cooper is CNET News.com's executive editor of commentary.

More Perspectives

[deanhoveysmith]

YouTube move to Canada?

Well, since sharing music is legal in Canada, why not have YouTube move to Canada? I really doubt they will have any legal issues once move! YouTube is wonderful site, and I am sure Canada would welcome the company with open arms!

[chris11-1]

Music/Video sharing might not be legal in Canada

There is some controversy over music sharings legality in canada. As a Canadian myself, I have never been bothered by the feds about music sharing, but some of my friends have. The CRIA, the Canadian version of the RIAA, is becoming a net Nazi also, i find the fact that these groups are suing people for downloading music outrageous, when the artists are getting, what, 0% of the profits from the lawsuit! It just shows the greed of the record labels! With the profit that the artists make per "legal" download is $0.10 more than what they would make from you just getting the song from a P2P site! So why are the record labels suing claiming that the P2P networks are ruining them? It's the artists that are doing all the grunt work and are barely even getting paid! I say that people should stand up to these groups, what they are doing is wrong and unfair to the artists!

[Don_Dodge]

YouTube has four challenges

YouTube reminds me a lot of Napster more than 5 years ago. YouTube is doing for video what Napster did for music, but they have the advantage of hindsight.

YouTube has four challenges, all of them can be overcome, and I think they will. First, copyrighted material must be removed from the site as quickly as possible, and filtered out in the first place if possible.

Second, YouTube needs to identify and filter porn so that it is not easily accessible to minors, or adults who don't want to see it.

Third, YouTube needs to create several revenue streams that can scale with the business.

Fourth, they need to continue to innovate and build a strong brand relationship with their users. They need to build a community so that as new competitors come along the users will stay with YouTube.

I think they can do all four of these things and become a very successful company. At Napster we were not able to do this, but most importantly we were just too far ahead of the market.

Don Dodge
http://dondodge.typepad.com/the_next_big_thing/2005/10/napster_the_ins.html

[Daniel-San]

Screw copyright for the right size

If I told a mate of mine that he should check a movie out, and gav ehim a trailer of the movie, should I be shaken down in court for not paying Sony or WB their profit from promoting THEIR movie?

Fair use for fecks sake.

I promote certain companies brands by posting their shows or clips from shows online, why should I pay them for getting people to buy their content?

For instance, over here in the UK, and Europe as a whole for that matter, Lost premiered about six or so months after its US release. I downloaded the first couple of episodes and just recently bought the boxset of season One. It is a good show, worth paying for, and basically racked up sales for their producers in the end, because a thoughtful soul shared their contet. I do not watch TV as such. I buy DVDs of shows I like. Without video sharing I would miss out on such gems as Heroes, Lost, Battlestar Galactica, Smallville, etc, because I do not watch the usual channels.

In Sweden, where I am from, I will vote for the Pirate Party, which promotes free filesharing and fair use, that companies hate. Will be fun to see what the MPAA does of that.

[chris11-1]

W00T, now if canada had one of those parties....

YEAH! Show those people who say filesharing is wrong!

[chris11-1]

W00T, now if canada had one of those parties....

YEAH! Show those people who say filesharing is wrong!

[Dave_Brown]

The Pirate Party

I hear that the Pirate Party has now come to the US. Nice idea. I wish them luck getting recognized. The 2 party system bureaucracy is hard to overcome.

Dave

[Daniel-San]

Instead

"Second, YouTube needs to identify and filter porn so that it is not easily accessible to minors, or adults who don't want to see it."

How about in your profile, you can untick boxes that states "I object to offensible content".

I like all the garbage that I find on there. I like offensible content.

Why let a MINORITY of people run what the general masses see? Let them opt out and let people decide for themselves.

An opt-out should let YOu tube cover its rear end so to speak. Basically showing people, IF YOU ARE OFFENDED BY CERTAIN ISSUES, DON'T BLEEDIN WATCH THEM.

It is kinda like, if you are a pacificst you don't watch wrestling or boxing.

Freedom of information and freedom of speech for petes sake.

[ssparish]

There is a difference

Not that this matters much now that this article is no longer news, but there is a significant difference between Napster and YouTube: user generated content.

I would dare say that 99.9% of Napster music was not posted or shared by the original owner or was not user generated. It was all ripped from some artists CD. YouTube has significant, nay, HUGE, amounts of content shared by individual users. Any legal manuvering by the MPAA to shut down YouTube or any other video sharing site, is going to meet a tough burden of proving that YouTube doesn't have significant non-infringing uses.

The other prong of attack by MPAA is apparently already being blunted by YouTube trying to be a "good corporate citizen".

I think the video industry (MPAA) has learned from the hard knocks and missteps of the recording industry (RIAA).