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Friday, October 20, 2006

YouTube Cost Skyrocketing

Google's purchase price for YouTube is getting higher by the minute. According to the New York Times, the record labels all got a cut of the transaction and will share in future ad revenue when their music and or videos displayed on YouTube.

So having a licensing deal in place with the labels is good for GooTube, and they need to sign similar deals with the movie and television producers to avoid lawsuits. YouTube reportedly had to remove 30,000 videos made from copyrighted Japanese TV, and that's just the tip of the iceberg in copyrighted content.

YouTube also agreed to add technology for identifying copyrighted content, which will be a costly and time consuming endeavor. When you include the cost of monitoring the site, paying off the lawyers on both sides of copyright cases and the licensing fees, Google's tab sharply increases. And if the contributors start asking for a share of the ad revenue from when their videos are posted, YouTube's revenue stream could end up being a trickle.

By John Gartner at 11:06 AM | Comments (0)

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