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Why YouTube is the new ClearChannel

A few days ago YouTube said it was creating a program that would pay content providers for their content. That's great news for content providers. But it puts the Google unit in the position of being the new Clear Channel, with crucial programming decisions made by the corporate office. Commentary by Mark Cuban, owner of the Dallas Mavericks and HDNet.
/ Source: Special to

A few days ago YouTube said it was creating a program that would pay content providers for their content. That's obviously great news for content providers, regardless of platform. It helps set a market for content not only for Internet video, but it provides a barometer for content value relative to other mediums.

There obviously will be a lot of money available in aggregate for content providers. It will be interesting to see how much individual creators make, not only for their most popular works, which will be trumpeted in the media, but for their follow-up works. What percentage of participants will be the "long tailers" in the program and what will their earnings look like?

It's not really a question. I already know how its going to play out. It will be just like the music business.

The music business has few barriers to entry. Anyone can put their music up for sale on the Net. Few barriers to content creation. It costs next to nothing for low-end music creation.

Marketing, however, is another story. It costs a lot of money to create visibility, unless of course you find yourself on the front page of a YouTube category page, or its home page. Which puts Youtube in a position of acting just like your typical big market radio station or music radio network.

Paying for content, which is good in so many different ways, also has a downside. YouTube immediately went from a small but interesting community for its original content, to basically being just like Clear Channel, responsible for programming its different "formats" with the "best" possible content that creates the greatest number of eyeballs and maximizes advertising revenue. It's big business, just like Clear Channel.

I'm sure community will be involved in selecting content for their "playlists" which they will feature, but the reality is that YouTube corporate will select the videos it promotes just as music is selected to play on the radio or to be featured on radio station and related Web sites. Ask bands and artists how they feel about the programming skills of for-profit radio stations these days — satellite or terrestrial.

How long do you think it will be before videos appear on YouTube slamming them for which content is selected to participate in the for pay program? Milliseconds? And how long after that will it be before those who do provide content complain that they aren't getting the same level of promotion as others and that YouTube has gone corporate? Instantaneously?

But that won't even be the most interesting issue to rear its head.

As we all know, YouTube doesn't stream its videos, it uses progressive download as its method of delivery (presumably because its saves bandwidth costs and speeds up follow-up viewing), which means it delivers a copy of every video to every viewer. As reported recently, it knows of 23 ways for end users to retain an easily usable copy of that video.

How long will it be until we see content that is on YouTube expressly to earn a living for its creator posted to other video hosting sites (with pre-roll ads, if any, edited out)? You just know that the minute someone starts to make real money, that video will be on Veoh, YahooVideo, AOL Video, Daily motion and every Tom, Dick and Harry video hosting site across the world. If YouTube goes the way of pre-roll advertising, YouTube's best videos, without the ads, will pop up on hosting sites and even in Google results and ads within minutes of their posting on YouTube.

Which leads to the question of who is going to do something about it? Who is going to take the responsibility of protecting that content that YouTube is paying for?

Will YouTube just tell the content creators to ignore the videos on those other sites because it's great promotion? That more people will see the video, so what do you care? So what if you are losing a few dollars, it's the Internet, fool, that's the way it works?

Or will YouTube tell the content creators they are responsible for monitoring all those sites and sending takedown notices? Will YouTube explain to the content creators it has just partnered with that it's conceivable that the same video can be uploaded many times, a day, and even though you have a day job, you need to monitor those sites and pay for the attorney costs and filing costs of the DMCA Takedown Notices? It's your problem if those fees are more than we pay you?

Or will Youtube add digital rights management? The Net would love that.

Or maybe YouTube will do the monitoring itself and will find itself playing Viacom and sending takedown notices to the many Web sites hosting videos? That would be interesting. Even more interesting would be if YouTube charged back the legal costs to the content providers and whether they would make the 99 percent of partners for whom the legal costs exceed their payment from YouTube pay the difference and turn it into a profit center.

But wait, there is more! What will Google Video do when people start uploading the videos that are getting a share of revenue up onto Google Video? Will they "pre-enroll" all YouTube partner videos into their filter program to prevent it from being available, or just let them be uploaded, thereby effectively ending the separation of Google Video and YouTube?