About a week back I wrote a post called When Does MSN Get Upset with YouTube and it was about finding MSNBC content on YouTube. My little theory went like this: Why should a website like MSN or Disney with their own significant web traffic allow YouTube to host their own copyrighted material and make advertising revenue off of the YouTube traffic?
Well, it looks like someone over at Comedy Central read my post (probably not, but I can dream right?) and sent a request to Google-YouTube asking them to remove all copyrighted material including SouthPark, The Daily Show, and The Colbert Report. The material can be found over at Comedy Central's Motherload site but a quick browse through the site shows that it is not the same as the YouTube interface or other video sharing sites. However, there is a nice ad placement in the right that you must watch before the video launches. (BTW - I watched a SouthPark video of the boys playing World of Warcraft.) So my question is why should content owners let YouTube get their traffic and Google monetize it to get revenue? Obviously, Google is/was worried about that answer too.
On the heels of this announcement, comes a post from Mark Cuban called Some intimate details on the Google YouTube deal in which he gets some potential behind the scene details on the deal. As Mark says "I cant say this has been fact checked. It hasnt. I cant say its 100 pct accurate, I dont know. But it rings true, and as I said, I trust the source" but the potential behind the scenes look has some interesting points if they are true. The post is long, but here are the highlights:
- YouTube offered the media companies a straight revenue deal if the copyright issues went away. It didn't fly with them.
- As part of the Google deal, $500 million of the $1.65 billion purchase price was to be set aside for potential settlements. However, Google was still worried.
- The media companies negotiated a most favored nation clause with YouTube so they each got $50 million; however, they didn't want to pay talent fees so opted for equity positions.
- Google needed two other key points - a 6 month pause on copyright lawsuits from the media companies in the deal and lawsuits on YouTube competitors like Bolt and Grouper.
The key to a lot of what Mark wrote about is that we, Google, and anyone else involved in the video space knows is that the real money will be made on content professionally produced. That's why the traffic is being generated on these sites.
That's not to say that often a consumer generated video won't be a homerun, because it will happen. However, if you are an advertiser you'll need to know where your ads are appearing, especially if you are spending serious money - like they do with TV spending today.
Companies still spend big bucks on TV shows- if you are an advertiser where would you want your money spent? Monday Night Football or a video of a 3 year old throwing his first pass? For every great Mentos ad there is another homegrown video that will be hard to monetize. This battle is far from over. Just follow the content to see who wins.