Warner Music Group just announced that it has signed a deal with YouTube to make the music videos of artists like Madonna, Sean Paul, and the Red Hot Chili Peppers available through the online video sharing site - legally. This isn’t much of a surprise - YouTube gets over 100 million page views a day and Warner is the fourth largest record company. If you’re a businessperson on either side, this is a sweet deal.
However, the partnership seems somewhat funny to me, given that videos of these artists are already available in the site, albeit illegally. I’m all for doing things by the book, but I don’t think this will be that much of a draw to consumers as users have already been getting their download on.
Even more, I look at this as a “sell out” situation from both sides: the Recording Industry is giving away free access to its media library. While this may potentially be the next generation business model (revenue sharing with these pervasive sites like YouTube and MySpace to grab advertising dollars), it undermines the other record labels that are looking to protect their content. I mean, just last week, Universal Media Group accused YouTube and Msypace of being Napster-like copyright infringers.
On the YouTube side, the community thrives on user generated content and I believe that the users will frown upon getting big business officially involved. It’s unavoidable that the copyrighted content will have to go at some point, but it begs the question of what else can YouTube legally integrate into its site. If YouTube alters its focus from what made it successful, then we may see people jump ship to the next hot thing.
The bigger issue at hand here is the new paradigm for media companies - compromising their existing strategy to fit into the new user-generated age. The explosion of social media is undeniable, but I’m not sure if this free access approach will be good for the consumer long term. With more and more media moving to closer to the home PC, we may see a lot of studios and labels that don’t have access to large distribution networks and capital reserves fall by the wayside.
