Will YouTube ever be a cash cow?

It’s hard not to get excited by a brand and service that people use every day. You can find anything on YouTube and more videos are uploaded all the time. I even heard a statistic that every second 5 new minutes of video are added.

But is this a great business?

First off come the realities of their business model:

• Content owners will protect their rights.
• Google cannot possibly hire enough IP lawyers or trained staff to keep up with the flood of submissions
• Unfortunately people want high quality content, which tends to be professional done
• The users of YouTube do not respect copyrights

These are some glaring issues so how did YouTube & Google decide to handle this? They hide behind the Digital Millennium Copyright Act. The safe-harbor provisions in the act were put in place to guard ISPs from litigation since they were providing the bandwidth but couldn’t (and shouldn’t) be policing Internet usage. Google is offering a service though, and additionally houses infringing content on their servers which is a step beyond what the provision was intended for.

With Google stretching this legislation to it’s limits, there is no room for error now. So when it comes to monetizing movies on YouTube there becomes a major issue: If its on your server and you make money off of it, you’re no longer simply providing the bandwidth you’re exploiting the content.

So the only way Google is going to be able to monetize is through the low production value videos, or doing deals with content holders who are already antagonized by how Google has treated copyright laws previously.

So yes YouTube is an amazing service, and yes there’s some potential for a breakout business, but boy are there some glaring weaknesses for Google.