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CNET and others are reporting that YouTube and major labels are having conversations regarding the posting and archiving of music videos on the YouTube site. The business model would allow consumers to view videos for free while paying the labels a share of advertising revenue–the opportunity for YouTube, labels and advertisers is enormous if this groundbreaking deal comes to pass.
To fully realize it however, there are two things that should be considered in the context of the deal:
1. What about amateur videos that use music from major labels? So many karaoke, parody and other homegrown videos use music that hasn’t been licensed. There are too many to police which would be an enormous burden on labels and YouTube alike—it would behoove the labels and YouTube to work this in as part of the deal.
2. It’s time to dig into the vaults and get that content out there. There is so much unofficially released video on YouTube that is absolute gold to music fans. For instance, my prog rock proclivities over the years have played out in staring at 11th generation VHS tapes to see performances by obscure bands like Camel or poorly converted PAL tapes of Chris Squire in the studio miming to “Hold Out Your Hand”. Both of these clips are now up on YouTube—in better quality than what has circulated among collectors for the last 20 years. While there are certainly questions that would need to be addressed regarding ownership and/or licensing of this footage, it isn’t doing anyone any good where it is now which is rotting in a storage facility somewhere while fans spend millions of dollars buying crappy homemade DVDs of this stuff on eBay. With a well implemented ad targeting algorithm, YouTube could sell ads targeted to thousands of niches at a huge premium.