• by Josh Lovison , November 10, 2006

The other day in MediaPost's "Section 2: Around the Net in Online Marketing," there was an interesting juxtaposition of articles. Heading up two stories about Google's legal issues with YouTube was a link to another: "YouTube: Better ROI Than Super Bowl."

Over the past few weeks, what felt like a googol of articles about YouTube have been written. The surprising part was the total lack of coherence in any of them. The best coverage of the video phenomenon I've seen was "Rip Off," a bit done on "The Colbert Report" on Nov. 1. The segment focused on an aspect of the story that too few articles seem to have remembered: the users who create user-generated content, who are not receiving ad revenue despite contributing popular content. This is the real "Rip Off," suggested the "Colbert" segment, "The Word"--which should be required viewing for anyone discussing the topic.

There's been an oft-repeated comparison between YouTube--if rights deals are not secured--and post-litigation Napster. YouTube is not Napster. The P2P networks had almost no user-generated content, and what little they did have was impossible to find because it operated on a search--as opposed to a portal--interface. If you look at the most-watched videos on YouTube, a handful are clips pulled from the offerings of the big media companies. However, a large number of the other most-watched clips, and especially the "long tail" of watched clips, are videos that the user base puts up for other users to see and comment upon. For every popular clip of "The Daily Show," there's an even more popular clip of a teenage driver crashing his dad's new car through the garage wall.

YouTube's greatest asset is its audience. While it may be true that access to illegally posted content aided its rapid rise to fame, at this point it holds control over enough of the online video market share that even if the illegal content were removed, much of the user base will remain--because, simply, that's where the other eyeballs are. This looks to be a very likely possibility with the emergence of Brightcove, which is tailored to the control of Big Media. YouTube was created with a focus on the ease of uploading and syndication of its content for use by the masses, and as such isn't really suited for the needs of TV networks.

YouTube does still have threats to its market dominance. The biggest threat is a loss of its audience to competitors. Companies like Revver, which have profit-sharing ad models that split revenue with content creators and syndicates, could pull a number of the UGC uploaders and posters from YouTube--and with them, its audience.

The other issue still revolves around copyrights. While reposting segments of TV shows is a clear-cut infringement, the more complex issue revolves around rights management in UGC. The famous "Guma Guma" video's creator likely did not obtain synchronization rights from the publisher and from the recording owner, nor did the video really fall under the stipulations of "fair use."

Regarding market share, YouTube is looking into pushing content to mobile handsets. If this is launched, and especially if uploading from video on the phone is enabled, YouTube will cement itself in the UGC market for the youth demographic.

As for the second issue of rights clearance, there is a solution, but it would require Big Media to come to terms with its hubris.

Content owners should really be viewing UGC that utilizes works under copyrights they own as an untapped "long tail" market. Under current rights clearance methods, things are too complex, too costly, and take too long for users uploading content to be expected to clear rights. If the burden was on the "Guma Guma" creator to research who owned both required rights, pay an estimated $5,000 for the distribution rights, and wait for up to a month to clear the rights, the video would never have been posted.

If content owners can revise rights clearance for the UGC age, plugging it into YouTube's uploading step would be a no-brainer. Also, Google reigns king with tracking and catering to long-tail business. It would be fairly simple for Google to track views and ad revenue of content tagged with rights belonging to content owners and give them their fair share.

YouTube and Google are not in trouble. There isn't yet a legal precedent to allow them to be sued for hosting copyright content, as long as they take it down if requested. If the posting of copyright content is controlled and removed, the core audience remains for what YouTube offers as a portal to user-generated content--much like a modern-day "Funniest Home Videos."

YouTube could help cement its position in this area by moving into mobile phone uploading and streaming, profit-sharing with uploaders of original content, and working with content owners to streamline rights management and clearances. However, it is crucial to note that despite what has been said in recent weeks, YouTube's core business is not based upon copyright infringement. YouTube's core business is tailoring to the long tail of content creation--or, as it's more popularly called, "user-generated content."