RealTime IT News

Google's Counter-Punch For Cuban

Might Google have another copyright problem? Some say yes; some say no.

It started Monday with the YouTube acquisition.

Analysts think Google's best bet to monetize YouTube is through contextually oriented, click-to-play video ads.

But those same analysts say big-money brand advertisers won't buy those video ads till they can be sure the ads won't run next to illegal, copyright-infringing content.

And many, including Internet entrepreneur and Dallas Maverick's owner Mark Cuban, don't think YouTube has the stomach to cut that content.

"They don't want to because they know half their traffic will go away," Cuban said during a Q&A session at an Online News Association conference last week.

Cuban has a point. YouTube is filled with teens lip-synching to copyrighted music. And if the labels wanted to, they could stop millions of YouTube viewers from ever hearing the copyrighted music.

But Google doesn't think the music labels are likely to adopt a kind of litigious attitude.

And a Google spokesperson told internetnews.com why.

The spokesperson said its starts with viral marketing.

Google feels that having millions of users use your content and share it with their friends and viewers helps increase its popularity.

They feel that the more popular music becomes, the more likely listeners will buy albums and attend concerts.

And while all this may seem like obvious logic, the spokesperson said, at least one major record-label, EMI, hasn't caught on yet.

But, the spokesperson said, Sony BMG and Warner Music have.

Both labels signed deals to split advertising revenue earned from YouTube pages featuring their copyrighted content.

The spokesperson acknowledged that while there might not be all that much revenue to split at this point, the deals keep the labels in nominal control of their copyrighted material while the free viral marketing does its work.

They are officially getting a piece of the pie, and that looks good for antsy shareholders.

And what's more, the spokesperson confirmed that Google is optimistic its massive dark-fiber infrastructure can lower the distribution costs that once cut so deeply into YouTube's profits.

JupiterKagan research director Joseph Laszlo told internetnews.com he estimates those costs are somewhere between $4 million and $8 million.

Lower that and there's more advertising revenue to share.

That way, the Google spokesperson said, even if a label doesn't understand that viral marketing on YouTube will help in the long term, there's more up-front cash to keep its lawyers at bay.