The Backroom Dealings in Google-YouTube

I came across some interesting anonymous information the other day that seems like a plausiblealbeit very speculative discussion on how the music labels worked with Google and YouTube to hammer out the particulars in Google’s purchase of the video sharing site. Fortunately Mark Cuban reposted the comment on his blog so you can judge for yourself.

A couple interesting tidbits that I found fascinating: the first is that each major label company essentially got a stake in YouTube which was subsequently bought out by Google to the tune of $50 million per label. Further, according to the source, this scheme allows the label to pocket the money rather than pay out much of the money back to artists via the licensing deal that would traditionally apply. If true, hypocrisy would be a good word to describe this backroom deal versus the RIAA’s public stance of protecting the artists.

The other fascinating part of this commentary comes into play with Google’s future interest in YouTube. The media companies each received the $50M payout and in return they will give 6 months for Google to develop tools to identify and track media uploaded to YouTube; this strategy essentially means copyright infringement, the honey pot of YouTube’s popularity, thrives while other media sharing sites are reeled in by the labels (see Universal’s lawsuit against Grouper and Bolt).

The above recount is an interesting analysis and the conspiracy theorist side of me is disturbed that such tawdry tactics would be employed for the protection of a few large corporations at the expense of artists and fans alike. However, I’m cynical by nature and would question where the facts end and the speculation begins. Especially when we’re talking about an anonymous source who hasn’t been independently verified like an investigative journalist would have done…

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~ by Som on October 31, 2006.

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