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That seems to have been most people's gleeful reaction earlier this week when Google announced its acquisition of YouTube for $1.65 billion. That and "They paid too much." Anyone would think you'd never heard of a site with user-submitted content before. Or stock swaps.

First, the lawsuit prospects. YouTube isn't a file-sharing network; it's not Napster, KaZAa, BitTorrent, Gnutella, or eDonkey. It has more in common with free Web site services. Except for "Director" accounts, videos posted to YouTube are limited to ten minutes. That certainly doesn't stop anyone from posting something that's copyright, but it does mean that YouTube isn't the most convenient way to share a feature film, hour-long TV drama, or even, really, a sitcom unless you get a director account, which requires you to indemnify YouTube in case of your misuse and supply a bunch of personal details. A ten-minute video clip from, say, a five-hour tennis match (or from an old comedy show) still violates someone's copyright, but there's less point to suing over it. The prediction that it will be individuals and "little guys" who sue YouTube rather than large rightsholders seems to me to be the right one; the little guys have more to lose in this situation. And also: a little guy will sue a big guy hoping for a nice settlement; a big guy will squash a little guy like Bambi Meets Godzilla; but two big guys make a deal.

The bigger copyright issue is to do with music, since you can easily upload a single DVD album cut and stay within the time/file size limits. But the purchase announcement was accompanied by the news of licensing agreements with Sony BMG and Warner Music Group. That's so smart it's almost unbelievable, given the recent history of the copyright wars: the easiest way to get people not to violate your copyrights is to do it yourself. If you can readily access good, official copies of something, why would you bother with illegal, less good ones unless those had some creative added value of their own (or the official ones were really expensive)?

There's also the point that although you can download YouTube videos doing so is the kind of hack that most mainstream watchers probably won't bother with.

It would be really helpful if someone of a statistical bent and possessed of a lot of patience would go in and do a survey of YouTube to determine what percentage of the content is in violation of copyright, what percentage of the violating material is not available commercially, and what percentage could actually damage anyone's sales. My own guess is that the answer to those are: a lot, most, and hardly any. But in any case, we've gone through this same thing with online file libraries and free home pages, and we know how it's going to come out: YouTube will operate, as it does now, a notice and takedown policy, and courts will eventually agree that as long as it operates that policy consistently and promptly it can't be held responsible for the sins of its users.

Even longer term, probably two other things will happen. Backed by Google's clout, YouTube should be able to sign long-term licensing deals with the major rightsholders that will cover a lot of the copyrighted material (though clearly not that of the "little guys"). Second, fair use could be extended to cover video and music; Google is currently arguing that its book scanning project (reminiscent of MP3.com's failed MyMP3 service) qualifies as fair use, although the publishers involved disagree violently.

The second thing, the paying too much, ignores the fact that Google paid entirely in stock. It's still a lot of money – or would be, if the YouTube guys could sell it and leave – but in real terms last year's $1 billion investment for a 5 percent stake in AOL cost the company more and ultimately will probably profit it less. But the fact is the price didn't matter: Google had to buy YouTube to keep it out of the hands of Yahoo! and MSN. With YouTube in the hands of one of those other companies, Google Video was dead in the water. Google makes its money on advertising; advertising goes where the people go and in direct proportion. People have known for a long time that video would eventually be successful on the Net; they just weren't sure how. In combining a video service with social networking, YouTube seems to have found the answer.

To the suggestion that YouTube is a flash-in-the-Net fad, I say nerts. YouTube has all the same characteristics as such passing fads as eBay, mobile phones, the Internet in general, and Google itself not so long ago. Individual videos will flash in and out of popularity, to be sure, just as you don't hear a whole lot any more about the Hampster Dance, booth in the Mojave Desert, or "I kiss you!" Mahir Cagri, all Net stars in their time. But as video channels proliferate, a networking site where you can watch just the good bits by word-of-Net is as valuable as Google News.

Wendy M. Grossman’s Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series. Readers are welcome to post here, at net.wars home, at her personal blog, or by email to netwars@skeptic.demon.co.uk (but please turn off HTML).


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