How does anyone expect the record industry to get their head around YouTube and the nine-month old online video revolution when, in the same week, Forbes does a major, glowing cover-spread on YouTube and ubiquitous billionaire Mark Cuban says that any prospective YouTube buyer is "a moron"? (For Cuban's most recent reasoning see here and for a counterpoint, see here).
From the outside, you only need look at the dichotomy between Warner deal with YouTube and the inflammatory comments from Universal head Doug Morris to see a industry schism and struggle to figure out the best way to react and benefit from this new frontier. If there were unanimity, after all, the RIAA would be jumping into the conversation.
But, we wonder, what the depths are of the intra-industry dispute? We've heard that they are pretty significant and that the object of anger is squarely directed toward Warner Music. This was supported by the following blurb in a HITS rumor column last week (via Coolfer)...
Warner Music’s pact with YouTube appears to be yet another ploy on the part of Edgar Bronfman Jr. to be seen as a leader of the digital revolution in the eyes of Wall Street, in an effort to boost WMG stock. Music biz veterans find this self-spinning laughable, asking how an executive with his history of making bad business decisions could lead anyone anywhere. They further note that Bronfman, who was clearly in a big hurry to get a deal done, is taking short money for PR purposes—and possibly mortgaging his company’s future in the process
It will be very interesting to see what SonyBMG and EMI do in the weeks ahead. Good luck. As the New York Times put it another YouTube piece that ran Saturday:
...even Hollywood executives interested in finding a way to work with YouTube are perplexed about how to go about it
BTW, it might just be that we don't have any skin in this game, so we view YouTube, as the tip of the spear of a big trend and focus less on the near-term travails of the company. I do not think "YouTube is Napster". Using this analogy would mean that YouTube would get quashed and then online video distribution would largely go underground and get actually harder to use by the average consumer. I seriously doubt that in two years time it will be harder to gain access to video content online than it is now. The economics of label, studio and broadcast outlets, will go a long way to shaping this reality -- presumably more so than who buys YouTube and for what.
-S. Garrett
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