Shouldn't The Labels Be Paying YouTube For All The 'Free' Service They Provide?

from the because-free-is-bad,-right? dept

I recently wrote about Simon Cowell's conflicting statements expressing anger that YouTube didn't pay him for showing the Susan Boyle video millions of times, while then being happy that the same video will result in 10 million album sales. In my latest column for The Telegraph, I explore how the legacy music industry made a huge mistake in attacking YouTube and having videos pulled down off the site for not getting "paid" enough, when just a few years ago if they had wanted to put up music videos of their bands, they would have paid an arm and a leg for software, hosting and bandwidth -- and the consumer experience would have been a hell of a lot worse (RealNetworks media player, anyone?).

In thinking more about this, I was realizing how hypocritical the recording industry is on this particular topic. After all, they go on and on about how bad "free" is, and how they must get paid for any use of their content or they can't survive. And, yet, when someone gives them something for free (and YouTube provides free software, free bandwidth, free community and a bunch of other benefits), they complain that they're not getting paid. It's an incredible double standard. If the recording industry were actually being intellectually honest (I know, I know...), wouldn't they be demanding to pay Google for providing such a service, since (as they claim) you "can't make money from free"?

Separately, I had wanted to mention this in the Telegraph column, but ran out of room. It is worth noting that at least some of the industry has, in some ways, "embraced" YouTube with the launch of Vevo a couple weeks ago (though, that launch was completely bungled by apparently not expecting anyone to actually visit the site). I still haven't quite figured out what Vevo is, however. It's a joint venture of Google and Universal Music, with EMI and Sony Music as partners (Warner remains the major label holdout). As far as I can tell, though, it just seeks to be a separate platform to give the labels some more "control" over videos on YouTube. I still can't figure out why this needs to be a separate company, other than to play financial games. Isn't this just a feature of YouTube?

Filed Under: business models, free, hosting, video, youtube
Companies: google, vevo, youtube


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  1. identicon
    Joseph, 17 Dec 2009 @ 1:03pm

    come on...

    Simon's comments were stupid. For one, I seriously doubt she will sell 10 mil, even though the album is off to a fantastic start. I think after the holiday season we will see the sales drop sharply, and eventually taper off. 10 Mil these days is almost unheard of and I really don't think Susan is going to be that 1 in a million artist.

    Also, her sales aren't all attributed to YouTube, so again... silly comment. Unless he's just trying to provoke them or something.

    If you look at YouTube in the same light as a tv network (Mtv for example), YouTube broadcasts content, and then they attract viewers and advertising dollars based on the popularity of that content. So thats how YouTube gets paid - via advertisers. Now what about the providers of the content? Isn't it fair that they get something, either a percentage of the ad revenue or a small flat fee for every airing of their content?

    If this were network or cable tv it would be the same thing. The content creators aren't paid by the advertisers. The company that broadcasts the show pays them.

    If you're about to say "well the music artists get the benefit of promotion via YouTube and it helps drive the sales of their album", you would be right, but so does anything else being broadcast on tv, radio, or anything else you can think of - and they still get paid a set fee on top of that. It should be the same on YouTube.

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