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 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 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.

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