YouTube Content Pacts Likely To Avert Lawsuits
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YouTube Inc. averted copyright infringement woes when it inked content sharing pacts with media companies the same day it was bought by Google Inc.
The social networking website was considered a target for lawsuits by music, movie studios and network companies based on copyright violations for unauthorized content transferred on its site.
The company signed agreements with two major record labels and CBS Corp. Monday, a sign the two industries prefer to form profitable alliances in lieu of costly battles in the courts.
“It’s an indication that the creative community and YouTube want to be in business, not fighting,”a copyright attorney in Los Angeles, Lawrence Iser, said.
“What you are going to see is the rest of the creative community entering into similar agreements with YouTube and Google,” he said. “It’s the smart thing to do. Look at the power of YouTube. It is a tremendous marketing tool.”
Indeed, YouTube’s growth has stupefied the industry.The site was launched less than a year ago and quickly developed a large and committed network of users who create, share and blog about video content. YouTube says 100 million of its videos are viewed each day, and the site accounts for 46% of online video traffic, according to Hitwise.
“This is a really crucial step in the development of advertiser-funded music on the Internet,” an analyst at Jupiter, Mark Mulligan, said of the copyright agreements.
“This is a recognition that the Internet is a discovery channel first and a distribution channel second,” he added.
The percentage of Internet users who pay for music digitally is less than 10%, and the percentage of music available online is between 15% and 20%, according to Mulligan. In addition, he said consumers in the 15 to 24 age bracket who listen to free digital music are five times greater than those who pay.
Google said Monday it agreed to buy YouTube in an all-stock deal worth $1.65 billion, marking the company’s largest acquisition. The deal integrates Google’s technical resources and advertising distribution system with YouTube’s vast user-generated content and audience.
