Google’s motto may be “do no evil”, but the company can do no wrong in the eyes of tech investors and the mainsteam media. However, I suspect the day it decided to lavish some of its pocket money on YouTube may prove to be one of the biggest mistakes the company ever makes.
The $1.65 billion it paid for YouTube may be small beans to the search monolith, but Google has publicly admitted that it can’t find a way to turn a profit from the millions of eyeballs that are watching video on its site every day. Hosting terabyte upon terabyte of video doesn’t come cheaply. Charging users to watch videos is a non-starter, so either Google finds a way to make YouTube more attractive to advertisers, or it’s going to continue to bleed money.
However, the hosting costs are nothing compared to the damage the copyright owners could inflict. A federal judge has forced Google to hand over its viewer logs to Viacom, which is suing Google for $1bn (60% of what it paid for YouTube in the first place) for alleged copyright infringement. Those logs should prove beyond doubt how much copyrighted material is being viewed on the site.
My guess is that it will be a pretty substantial proportion. The vast majority of clips I’m sent links to have being scraped from TV, be it Premiership football highlights, clips from BBC comedies, or music videos. The Guardian’s Sport section regularly lists clips of classic sport events that could only have come from copyrighted sources.
If the judge grants Viacom its $1 billion bounty, it will be open season on YouTube. And then we’ll discover just how deep Google’s pockets really are…
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