News: YouTube continues to generate tremendous buzz. This week, as I’ll recap in the next few posts, was amazing. The New York Times wrote a feature article on YouTube here. Besides the standard fare about YouTube’s growth, the article discusses some of the IP issues:
“YouTube is relying on the Digital Millennium Copyright Act, which in general does not require Internet companies to screen material they store in advance. Rather, the law says Web sites must remove content when a copyright holder informs them of a violation.
“But there are many who wonder how safe YouTube’s position is. The Supreme Court ruled in the MGM v. Grokster case that music file sharing systems could be held liable for inducing users to violate copyrights. That said, many other mainstream sites, like MySpace and Yahoo, also post videos without trying to screen out copyrighted material. (Most do scan for pornography, though.)
“Yet even Hollywood executives interested in finding a way to work with YouTube are perplexed about how to go about it. They are happy to use YouTube as a free place to distribute movie trailers and TV clips, but users prefer the very best bits of hit shows.
“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.”
“[YouTube CEO] Mr. Hurley hopes to be able to solve this concern by offering studios a share of ad revenue as it has for Warner Music. But for now YouTube does not have much advertising revenue. It displays graphical banner ads on some pages and text ads on its search pages. But Mr. Hurley rejects inserting commercials in front of video segments, an increasingly common advertising format.”
Analysis: I’ll have more to say later on the copyright issues. YouTube CEO Hurley’s stance on the front ads is commendable for consumers, although YouTube will have to figure out alternative ways to increase ad space just as Google eventually did with its sponsored links, which are separated from search results on the right hand column.