Google snaps up Youtube for $1.65 billion

November 2006


As Video-sharing Web site YouTube Inc announced that it had struck content deals with Universal Music Group, Sony BMG Music Entertainment and CBS, Google announced, after several days of rumours, that it would buy YouTube for $1.65 billion. Google say the two companies will, for the time being at least, continue to operate independently – but Google also added that it had also directly dealt with Sony BMG and Warner Music for Google music video content. Vivendi’s Universal Music Group said on Monday it had agreed to give YouTube viewers access to thousands of music videos. The company said it and its artists will be compensated not just for the official videos, but also for user-generated content that incorporates Universal’s music. Universal Music Group said it will also use technology to filter out copyrighted content not authorized to appear on the YouTube site. Sony BMG has it will make video content available on YouTube – and will also let YouTube users include some catalogue songs in their own amateur video uploads. Warner Music had already said it had an agreement with the site. Sony BMG said it will share advertising revenue with YouTube for all music videos that incorporate audio or video works from the Sony BMG library. So three out of four of the majors seem to have adopted a new business model for online video content – just EMI needs to say what it wants to do. But what of the smaller fish – those who own small catalogues but whose work might still be up on YouTube without permission. “I’m sure that the big content providers will all be queuing up to do deals with Google,” said Kim Walker, an intellectual property lawyer with Pinsent Masons, the law firm behind the excellent OUT-LAW website. “I guess the smaller operators who perhaps haven’t got the negotiating clout that Universal and EMI and so on have got I guess if they can’t do a deal or don’t do a deal they are going to be more likely to look for recompense in some other way by threatening legal proceedings.” Its still a massive task – and administrative jungle – for YouTube if it wants to operate as a legal platform. YouTube does take down material as soon as it is notified of this but the fact remains that a large percentage of the material on the site has been uploaded and is placed there without permission and YouTube had had to delete nearly 30,000 files off its system in one go after The Japanese Society For Rights Of Authors, Composers And Publishers (JASRAC) submitted a document to YouTube listing 29,549 videos that feature music owned by its members which the society say are being hosted illegally. According to an article in the New York Times, SonyBMG, Universal Music Group and Warner Music Group have also all won stakes in YouTube as part of their licensing deals with the video sharing website. The three majors confirmed they had reached an agreement over the distribution of their content on the YouTube platform just ahead of Google’s previously reported acquisition of the site.

Universal has also announced launched lawsuits against two video sharing websites accusing them of violating their copyrights. and both offer services similar to that of YouTube, where members can upload their own videos to share with other people. However, just like YouTube, a lot of members actually upload other people’s videos, including many pop videos, without the permission of the people who own that content. Bolt already have a notice on the site asking members not to do this stating it respects copyright law. Universal says the actions were brought after they failed to agree licensing terms with these two sites. (news)

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