Record Labels Learning They Have Little Leverage On YouTube

from the well,-look-at-that... dept

Over the weekend, the story made the rounds about Warner Music’s dispute with Google over getting money from YouTube videos. As we discussed in our post on the topic, it seemed like Warner had very little leverage here: Google has no legal responsibility to pay anything, and removing the videos from YouTube seemed a lot more likely to harm Warner Music and its artists than Google. As noted by some folks, for many kids these days, YouTube is how they find and listen to music these days. Forcing your songs off YouTube would be like demanding their removal from the radio twenty years ago.

Yet, more details are coming out on this story, and it appears that both Warner Music and Google may recognize Warner Music’s precarious position here. In fact, it appears that it wasn’t Warner Music that demanded its music be taken down. Instead, reports are coming out saying that Warner instead went to Google with higher monetary demands, and it was Google’s response to start pulling the music down, to demonstrate to Warner Music that YouTube is a lot more valuable to Warner Music than Warner Music is to YouTube (a lesson that Warner Music execs desperately need to learn).

Warner Music’s response, apparently, has been to try to pretend it has some leverage, supposedly leaking a somewhat questionable story that it, and other major record labels, are preparing to launch a “Hulu for music.” However, as Greg Sandoval notes in the link in the paragraph above, this seems like little more than idle speculation by the labels. They had talked about this months ago, and have done nothing since. Instead, it was a bluff by the record labels in a weak attempt to convince Google that it needs to play ball or face competition. Google is likely to call the bluff — because Google still recognizes what the record labels seem to have trouble recognizing. The power of YouTube isn’t in having a site that plays videos, it’s in the audience — and you don’t recreate that overnight.

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Companies: google, warner music group, youtube

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Comments on “Record Labels Learning They Have Little Leverage On YouTube”

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Matt says:

hulu is complete crap, and sponsored by the labels crap. We all know it. If it gets popular enough, we’ll just start ripping videos off of it instead of youtube. Why? We want to be able to watch our videos everywhere.

Hulu’s basic premise is: “we’ll host shows for you to watch, but only the current season. Join our site!” Meanwhile, season after, you can’t pull up anything anymore. Oh, and the videos take about 10 seconds longer to download (different software).

Good job music/video industries, I wonder how much of your proverbial feet you have left since you’ve been shooting at both of them for so long.

Jon says:

The Trouble with Hulu

The Hulu service is only able to stream within the United States. This means that if someone outside the U.S. wants to watch a show, they’re likely just going to torrent it (commercial free). A “Music-Hulu” will be just as ineffective for the rest of the world.

How about the music industry demand free advertising space on any YouTube page containing an “illegal” video? That way they could freely promote their artists, not anger the fans, and get the music out to the widest possible audience.

bjc (profile) says:

Re: The Trouble with Hulu

Jon wrote “How about the music industry demand free advertising space on any YouTube page containing an “illegal” video?”

Youtube already has something like that. Content owners are allowed to flag illegally uploaded copies of their material on Youtube. Rather than taking it down, they can instead share in Google’s ad revenue from those pages. It’s a nice simple solution that benefits everyone.

Xiera says:

Re: Re: The Trouble with Hulu

This is true. I can’t tell you how many bands I’ve started to like just because their songs were playing as background music for a video I was watching. From there, I try to find more of their music to sample. And if I continue to enjoy their music, I purchase it. The artists win; I win (I get to hear new music that I like); YouTube wins; hell, even the labels win.

Andy says:

compared to payola

The labels don’t know what to do with any of this because the “business model” doesn’t fit how they’ve been doing business for the last 20 or 30 (or longer?) years — there’s no one to pay who has a captive audience to force to play what they want. Clearchannel doesn’t have a lock up on the Internet, and never could. YouTube essentially came in the back door, with an audience based on content that wasn’t designed to be “consumption-only” (even the name, YouTube, screams “participation”). The labels are used to having the distribution channel in their back pocket, that without licensing the channel would go out of business.

Anonymous Coward says:

I like Hulu. It’s a decent attempt to offer customers convenient and current video streams. Certainly it isn’t ideal, but the quality is higher than youtube, so it’s watchable on a tv.

If the record labels launch a music hulu, it probably won’t work as well.

Music is portable, so it won’t meet that need. It’s just a different animal from TV. The record companies will still need to add value beyond the music.

Xiera says:

Re: "the economics of entertainment"

The economics of entertainment, eh? You mean the least needed industry? The one that provides no tangible value?

Let’s take a look at the various aspects of the entertainment industry. Athletes and professional sports teams: do pretty damn well for themselves and STILL feel the need charge ridiculous prices and restrict their content (I’m looking at you, NFL). Actors and the rest of Hollywood: doing excessively well also, and then they whine when they don’t get everything they want. Bands and the music industry: most bands do well for themselves despite their labels and despite “illegal” activities. The list goes on…

The economics of entertainment are simple: you provide a service (ie, a game, a performance, a concert) and I pay for that service. That service itself cannot be reproduced by anyone else; it’s simply impossible because then it’s not the real thing. (This is what branding is all about.)

The audio-video effects of said service can be reproduced ad nauseum, but because such reproduction requires infinitesimal amounts of resources, time, and effort, there is essentially no cost to reproduce the material and therefore no justification for charging for the reproduced material.

Mark Regan says:

Free Download Sites?

The RIAA is furnishing the ISPs with a long list of sites they claim are authorized to provide free downloads of their music.

I went to many of those sites. They SELL music but do not provide free downloads to anyone unless you first REGISTER with them, and then they play only a snippet and try to get you to buy the song without hearing it. (At least on the radio you can hear the whole song.)

Back to YouTube I went. There, you can hear the whole song. YouTube is the radio station and jukebox of THIS generation. After I listen to and fall in love with a song, THEN I will make a purchase decision — not before.

The RIAA wants to make us music lovers buy first, and listen afterwards. It simply doesn’t work that way. And the “snippets” their sites play are computer generated and do NOT feature the music in a positive manner. They arbitrarily pick a selection that does not accurately reflect the attributes of the song.

That would be like trying to sell a toilet bowl cleaner on TV by showing the business end of the brush instead of a picture of the gleaming bowl afterwards.

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