If you’ve ever used the Internet before, the chances are you have been to YouTube.com or received one of their many videos in your e-mail inbox. YouTube is one of the greatest success stories of Internet entrepreneurship. It was founded in February of 2005, received funding from Sequoia Capital later that year and launched by the end of the year. Within a year after its launch, YouTube was basically a household name. In November of 2006, less than a year after its launch, YouTube was purchased in one of the most talked about acquisitions ever for a whopping $1.65 billion. YouTube CEO Chad Hurley said, “By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners. I’m confident that with this partnership we’ll have the flexibility and resources needed to pursue our goal of building the next-generation platform for serving media worldwide.”
One of the great features and issues with YouTube that has made it so popular and frequently visited is the ability of any user to upload the videos they want. While this seems like a great idea to most people, some users abuse this ability by uploading copyrighted materials. YouTube does display a Terms of Use screen that lists different rules such as: In connection with User Submissions, you further agree that you will not: (i) submit material that is copyrighted, protected by trade secret or otherwise subject to third party proprietary rights, including privacy and publicity rights, unless you are the owner of such rights or have permission from their rightful owner to post the material and to grant YouTube all of the license rights granted herein.
Within a week of Google’s acquisition of YouTube, the lawsuits over copyright infringement had already begun just as many had speculated. Time Warner was the first to file a complaint against YouTube. YouTube’s acquisition by the corporate giant, Google, made it a prime target for copyright lawsuits. YouTube co-founder Chad Hurley states that they are looking to make this site profitable for all who are involved: “We’re committed to developing tools to identify the content and monetize it so content owners can have a new outlet for their content.”
Many business and Internet analysts are predicting YouTube is doomed and will not make it very far due to copyright infringement lawsuits. One possibility is that YouTube will be forced to remove all the copyrighted material which is one of the main draws of their web site. If this was to happen, it would leave very little interesting content, and the amount of users would sharply decline. Many comparisons are being made about YouTube to Napster, the file sharing giant that was eventually shut down due to copyright infringement lawsuits.
Just like Napster, YouTube is fighting their copyright cases with similar arguments. Some of the material posted to their web site is homemade but a large majority of it violates copyright law by sharing video of copyrighted materials like movies, music and TV shows. YouTube is quick to remove any videos that violate copyright laws or their own Terms of Service once they are made aware of it.
One advantage that YouTube has going for them already is the great business and technology minds at Google. YouTube has made partnership deals with large content providers such as CBS, BBC, Universal Music Group, Sony Music Group, Warner Music Group, the NBA, The Sundance Channel and many more. Although these agreements are great for business and may prolong the life of YouTube, it may only take company to stop this progress. Greg Sandoval states: “It only takes one unhappy media company – Disney, Sony, CBS or News Corp for example – to force the company’s hand. And the cases on this point, from Napster to Grokster at the Supreme Court, are clear.”
YouTube is undoubtedly one of the most visited and most entertaining web site available today. There will definitely be some lawsuits over content in the future that may risk the existence of this site. The acquisition of YouTube may be one of the greatest business deals to ever survive or fail; only time will tell.
