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Speculation on Google / YouTube "Hardball"

Posted by kdawson on Tue Oct 31, 2006 04:39 PM
from the stream-no-evil dept.
Businesses Google The Internet
An anonymous reader writes, "Interesting speculation on the 'GooTube' deal, oozing with corporate intrigue. Based on Mark Cuban's blog and a subsequent ZDNet blog posting, it seems as though there might have been some dodgy goings-on just prior to the deal. In short, YouTube may have handed the major labels approximately $50M so that the labels would turn a blind eye to the copyright infringements AND go after the competition to cement YouTube's position in the market. Universal started the ball rolling a week after the deal by suing Bolt and Grouper." Cuban's blog does not identify the author of the speculation, who calls himself "an experienced veteran in the digital media business." Cuban writes that this is someone he "respects and trusts."
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Speculation on Google / YouTube "Hardball" 50 Comments More /

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  • ...as in record labels? There isn't all that much music on YouTube, last time I checked...
    • Where have you checked?

      There are a ton of music videos on YouTube!

      I have over 100 bookmarked and watch them all the time!

  • The artist formally known as.. (Score:4, Funny)

    by QuantumG (50515) <qg@biodome.org> on Tuesday October 31 2006, @04:45PM (#16665005) Homepage Journal
    "an experienced veteran in the digital media business."

    Oh my god, it's Prince!

  • "GooTube" (Score:4, Insightful)

    by hsmith (818216) on Tuesday October 31 2006, @04:46PM (#16665019)
    is fucking obnoxious.

    that is all

  • Translation: (Score:5, Insightful)

    by Anonymous Coward on Tuesday October 31 2006, @04:46PM (#16665023)
    "In short, YouTube may have handed the major labels approximately $50M so that the labels would turn a blind eye to the copyright infringements AND go after the competition to cement YouTube's position in the market."

    You mean... like... pay licensing fees? And encourage them to prosecute those who don't?

    • Re: (Score:2, Insightful)

      by multisync (218450)
      You mean... like... pay licensing fees? And encourage them to prosecute those who don't?


      Oh, you mean like how Microsoft paid "licensing fees" to SCO around the time the lawsuit was filed against IBM?
    • Ah, but licensing fees would be royalties which they'd have to split with artists. Clearly you can see that these are not licensing fees. They are instead getting $50 million dollar investment stakes, which Google is buying them out of.

      The implication is that the contract giving them the money actually said "You only get the $50 million if you sue our competitors".

    • Re:Translation: (Score:4, Insightful)

      by Anonymous Coward on Tuesday October 31 2006, @05:29PM (#16665567)
      You mean... like... pay licensing fees? And encourage them to prosecute those who don't?

      From TFA: The media companies had their typical challenges. Specifically, how to get money from Youtube without being required to give any to the talent (musicians and actors)? If monies were received as part of a license to Youtube then they would contractually obligated to share a substantial portion of the proceeds with others. For example most record label contracts call for artists to get 50% of all license deals. It was decided the media companies would receive an equity position as an investor in Youtube which Google would buy from them. This shelters all the up front monies from any royalty demands by allowing them to classify it as gains from an investment position.

      • To continue the above quote: "A few savvy agents might complain about receiving nothing and get a token amount, but most will be unaware of what transpired."

        Copyright here is being used as a weapon by the big companies (Google and the entertainment conglomerates) to crush their competition while doing nothing for artists. The conglomorates get more money while cutting off the air supply to YouTube's competitors (the article mentions how suits against other sharing sites will scare off venture capital).

        • To continue the above quote: "A few savvy agents might complain about receiving nothing and get a token amount, but most will be unaware of what transpired.

          They'd do a class action if they have any sense.

    • Translating the translation;

      "In short, YouTube may have handed the major labels approximately $50M so that the labels would turn a blind eye to the copyright infringements AND go after the competition to cement YouTube's position in the market."

      "You mean... like... pay licensing fees? And encourage them to prosecute those who don't?"

      You mean... like... pay extortion fees? And encourage them to kill those who don't?
    • It's more of give the labels the money up front, AND agree to start cleaning up so the new owner Google with it's huge amounts of profit isn't immediately a target! Who wouldn't want a clean cut case against Google, or a part of that 1.5 BILLION with a "B" that Google paid. Now that MONEY$ are in the air, the RIAA is going to start being more harsh on the next company to get sold for lots of loot. Kinda like how each case after Napster the RIAA went for more money each time, the title to the company, not

  • Wouldn't it be cool (Score:3, Insightful)

    by SQLz (564901) on Tuesday October 31 2006, @04:48PM (#16665045) Homepage Journal
    If there was a web site where you could download free clips of your favorite shows, movies, videos, etc, and that the copyright holders would recieve free advertising and same basic control over content of the site?
  • I won't preface this with my usual "Mark Cuban is an idiot" response to anything he says, since it is an interesting question what Google plans to do with this thing so it's more of a money-maker than a liability.

    But it would have been helpful if his informant had distinguished a little between what part is secondhand gossip and what is pure fantasy.

    • Actually, I think after this, Mark Cuban has proved himself to be quite brilliant. He said YouTube was a bad investment, saw a post detailing shady dealings behind the acquisition, made it very public, and will probably MAKE YouTube a bad investment after all. I believe the original post (on pho) was possibly meant to alert artist-rights folks to the swindle-in-progress, but once he got his hands on it... wow.

      From the sounds of it, one particular part is specualtion, and the rest is probably true... but I
      • I was wondering how Google was going to avoid the major lawsuit liablity that youtube has become. Google will just buy off the lawsuits

        I fail to see how this is illegal or immoral. (Or fattening.)

        YouTube had a lot of lawsuit liability because they were a party to redistribution of copyrighted content without consent of the copyright holders. They made a licensing deal with several of the copyright holders. Now they have substantially less liability -- they have "gone legit".

        Assuming that the core concept
        • I fail to see how this is illegal or immoral. (Or fattening.)
          It causes cancer in rats...

        • Assuming that the core concept of Intellectual Property is legitimate (which one can never assume on Slashdot, so let's just pretend it is for the sake of argument), what's wrong with that? Isn't that how the system is supposed to work?

          It is, but not in an exclusionary way (as the email implies). I believe that's an antri-trust sorta thing.

          The most astounding part is the claim that the labels structured the deal so that they wouldn't have to pay the artists any of the settlement money. For a bunch of

          • Don't underestimate Google. I think they paid off the RIAA just to be safe, Google has A LOT more cash to be sued over than YOUTube ever did. The fact that the RIAA may have scammed the artists is moot. If anything it makes Google's purchase of YouTube more adventageous, because they now have a ready-made channel to start putting LEGAL stuff they aquire on there. Remember, they already have Google Video, but that needs work, perhaps they're trying to springboard off Blogger, and other user generated con
        • So when you call your kid over the flippin' Ma' Bell and sing happy birthday to him, AT&T is "a party to redistribution of copyrighted content without consent of the copyright holders"? Nope, common carrier. How is this any different, so long as they comply with any DMCA takedown notices?
  • For example, there's one show that can't be found on YouTube by typing in its name. All you get is the odd clip. However, if you type in the first initials of the words that make up the shows name, you find a load of full episode. It'll be like the creators of Doctor Who's revival series who used 'Torchwood' to label tapes so no-one would nick and pirate them. All people will do is to give each show an alias name and put that up.
    • And as long as that remains a secret, the networks won't much care. Yeah, it represents lost money to them, but it's lost in the same noise that swallows up commercials that go unwatched because you're in the bathroom. Effectively, it's like sharing the video with a few of your friends: not the network's favorite solution, but not intolerable.

      When any alias convention becomes well-known enough that anybody can download any TV show they want to, then it becomes big enough for them to issue a blanket request
  • why would youtube shell out a dime when the DMCA protects them?

    cuban's take on youtube has been insane from day one
    • The law also protects honest businesses from the mafia, but that doesn't stop them from paying for extra "protection". And this isn't Cuban's take... this is an email that he reprinted that verified his take. Much more so than I think most people would have guessed...

  • So, (Score:2, Insightful)

    by Threni (635302)
    No source then? Just rumour? $50,000,000 isn't much to pirate anything you want. I mean, if that's all it takes, www.piratebay.org could probably get every user to stick in a £1 each and make the site legal.
    • If I make $1 from every 1000 Chinese I have a million dollar.

      If every 1 in 100 PS2 owner buys a Playstation 2 game I made, I'd have sold a million copies of the game.

      Therefore it must be easy to make a million dollar or for anyone to sell a million copies of a PS2 game.

    • No source then? Just rumour? $50,000,000 isn't much to pirate anything you want. I mean, if that's all it takes, www.piratebay.org could probably get every user to stick in a £1 each and make the site legal.

      I admit that does sound like a low figure to buy out a voracious profit making machine like the Industry, but it doesn't have to be a straight up cash payment.

      If it was truly an investment position, as some have speculated, then payment may have been in stock, or a loan, or some sort of othe

  • You're supposed to pay license fees or whatever you want to call it because it gives you legitmacy, and it's supposed to be an advantage. If only you have to pay the said fees while other pirates are allowed to ignore it, then you're simply losing money for nothing. It is perfectly acceptable that if Google/YouTube paid the copyright holders a bunch of money to establish legitmacy that it'd be in their interest to get rid of other illegitmate sources. Otherwise they'd have wasted all that money for nothi
  • If YouTube gave the labels only $50 million, and Google gave YouTube $1.6 BILLION, no matter what the relative value, rights, or agreements, the labels are going to renege on the agreement.

    They might not get away with it. Whatever happened to their attempts to wrestle out of their <$0.99 deal with Jobs on iTunes?

    They're dumb, but they're strong. $50M is a drop in the bucket, even with the CD sales biz down to something like $10-12B a year.

    It will be interesting to see how much Google eventually winds up

  • Interesting enough to maybe be true. Certainly paints Google in a far worse light than anything else I've heard of, though, so that makes it a bit suspicious.

    And I'm not exactly a Google fan...

  • The single main reason why I felt so ambivalent about Google's digestion of YouTube is because I knew it'd kill it. Barely 12 hours after the initial news of the acquisition hit, we were also hearing reports of how Universal and the other usual parasites were already circling.

    Time to go back to the BT darknets or Kad, guys. "Mainstream," means "chewed up, with anything even remotely resembling worthwhile or genuinely meaningful material filtered, and spat out," where this type of thing is concerned.

    I hope
    • How is this be a scandal anyways? It was in the open press just before the acquisition that youtube had negotiated a license with the copyright holders to publish music videos. Of course, that would not cover other video sharing sites, so they would continue to get sued, giving youtube an advantage in the market. How is that backhanded? Is it a conspiracy when Microsoft gives me preferential treatment by allowing me to use Windows XP because I bribed them with $199, whereas those who use XP without payi
      • Pretty much what I was going for. But I'm apparently trolling, so ah well. Don't criticize those who choose which stories to post! Even if they are being idiots! Whoohoo!
    • I can think of a few conflicts on Cuban's part. 1) He has interest in media companies, namely HDnet. 2) He helped bankroll Grokster in their failed legal attempts. 3) His interest in IceRocket, a search engine for blogs. Since attacking YouTube is basically attacking Google, this is a conflict too. 4) He is a partner in Red Swoosh, which apparently is using peer-to-peer tech to deliver media to PCs.

      So, to say he has a conflict here might be an understatement. Also, Mark Cuban has a tendancy to open hi
    • How is this evil on Google's part? As it sounds, they took a small part of their massive advertising income, paid it as a licensing fee to record labels, and can now offer a web site where their customers can freely and legally post content containing copyrighted music and video clips. That's a tremendous legal service offered to their customers at no charge. It should protect a large number of people from lawsuit who might have otherwise been at risk.

      The only potentially "evil" thing is if the record la
        • Perhaps that's true. I don't understand why any artist signs away the rights to their work so completely in order to be a "signed" artist. But, if the artist has given away the right to control where and how their work is posted on the internet to their record label, then the record label is the correct person to control that usage.

          I don't know that legislation further dictating allowed terms in recording contracts is the correct answer here. I'm a proponent of using the government to do something when t
        • Mod up! Good point.

    • I don't know if Cuban has an axe to grind here

      Cuban is the guy who very publically announced that "only a moron would buy YouTube", literally weeks before Google - not famous for being morons - did exactly that. So of course he has an axe to grind ... he was made to look like an idiot in public by his own predictions. Why am I not at all surprised that a conviently detailed "insider" is now spinning a story to the very guy who needs it to salvage his reputation?

    • How you do you know he's NOT doing all of that plus the BLOG... After all, he OWNS a pro basketball team amongst other things... I'm pretty sure if he's not married, he's definitely not without in the nookie department either.
    • If I remember well, the IPO didn't give share holders controling portion of Google, so while it would affect Google, it probably doesn't affect it SO much.
      That being said, from what I've seen in the slashdot articles about Google's "evil doings", 99% of them tend to be FUD, like this one. Rarely, if ever, were they actualy "real" evil, but usualy just people flipping over nothing. This case is a prime example. Youtube pays money to calm down copyright holders. If they pay (as they should by law, as far as
    • Au contraire, it is the best merger name ever. It made you laugh - how often do you get that kind of value out of company names?

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