Friday Poll ON TOUR! YouPayTube?

[Rob McCow]

Google have pulled music videos off from their (fairly recent) purchase, YouTube, because they were asked to pay to host them.

From The Register:

A financial analyst has cast a new light on Google's ongoing battle with the music business. According to Credit Suisse's Spencer Wang, YouTube will lose parent Google $470m this year, because it can't generate worthwhile income from advertising.

This is interesting, because Google is no tuppeny startup. It's the world's biggest, most innovative and most successful online advertising powerhouse. Which means Google's failure to "monetize" YouTube is down to one of two things. Either there's potential ad revenue for online video, and Google can't capture it yet...or there isn't, and the economics of YouTube means it will always be a liability on the wrong half of the balance sheet.

Wang points out that most ad inventory is unsold. But that's because most of it isn't really worth anything. For every Charlie bit my finger - again! - a royalty-free hit helpfully provided by a sharecropper which clocked up 90m views - there are hundreds of thousands of unwatched video snippets. Advertising on YouTube merely irritates, and the attention wanders between views.

So what's the knock-on for music?

Last year, the UK's performing rights society the PRS[*] was the first major collection society to strike a deal with YouTube, but the two have fallen out over payments, with Google unilaterally removing music videos as a bargaining ploy. Google said it couldn't afford to pay a rate of 0.22p per song. A similar standoff with GEMA, the German performing rights society, means German videos are also currently blocked.

So can they ever make money from a 'free' video site? If they can, then the multi-billion dollar question is HOW?

Any ideas from this corner of the net?

[Si Hunt]

They make money of it from me, it's just invisible. I use Youtube to try out new songs before I buy them - but obviously they can't tell that every week I legitimately purchase 3-4 tracks after using Youtube to make sure I like them. It is common sense though - Youtube itself is a form of advertising the music, but they don't seem to count this.

I would suggest that rather than fret about their LOSS by videos appearing on Youtube (because that's ridiculous - as a user, I can't do anything WITH the videos; they're too poor quality), the record companies should be paying Youtube for allowing them to be hosted. They are, after all, as valuable by being there as airtime on the Radio (which is considerably easier to rip and steal). And no-one minds songs being beamed out all over the country that way!

Si.

[cyberchris35]

I don't see the problem with music on YouTube because if people don't want to pay for songs there are a lot more easier ways to get it then getting it off YouTube.

[Dirk Gently]

I can't see how Youtube can be making money & I can't see how it could make money short of having adverts everywhere.