Big Media Companies Embracing YouTube As An Advertising Opportunity

Posted Aug 17, 2008

Google Inc. (NASDAQ:GOOG) subsidiary, YouTube has been making friends out of their enemies recently.  Big shot movie companies like CBS Corporation (NYSE:CBS), General Electric Company (NYSE:GE) NBC, and News Corporation (NYSE:NWS.A) FOX are now embracing YouTube as a medium for advertising. 

Hulu, an online video destination featuring television shows from CBS, NBC, and FOX, is starting to catch-up in terms of market-share for online video.  But YouTube is still the leader in online streaming video.

Other companies that have started to embrace YouTube as an advertising medium includes Universal Music, Lionsgate, and Electronic Arts.  However, Viacom is still after YouTube in a billion dollar lawsuit. 

?We don?t want to condone people taking our intellectual property and using it without our permission,? stated Curt Marvis, President of Digital Media of  Lionsgate Entertainment.  ?But we also don?t like the idea of keeping fans of our products from being able to engage with our content.?

?For the most part, people who are uploading videos are fans of our movies. They?re not trying to be evil pirates, and they?re not trying to get revenue from it,? added Mavis.

Those who upload copyright content will not be able to share revenue with YouTube.  But the video content copyright holders and YouTube will share in the revenue.  YouTube will also promote the brand of the copyright holder in items such as movie clips and music videos.

An example that The New York Times provides is that a video by Rihanna called Disturbia was uploaded by a random user about 3 weeks ago.  The video has over a million views and now the video has an ad on the video that states that Universal Music Group is the owner. 

Last year YouTube invented a technology called Video ID.  Video ID allows the media companies to use digital fingerprints to determine whether some of their copyright material was uploaded to YouTube.  Then the media companies can flag the videos for removal.  This makes it easier for the media companies to find content quick because over 13 hours of video is uploaded to YouTube every minute.

Even though YouTube is one of the most visited websites in the world, finding ways to make the company profitable has been a challenge for Google.  The fact that big media companies are compromising with YouTube rather than constantly asking for copyright take-downs is a big win for Google.