Google and YouTube set to revolutionize online media

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In a relatively short timespan, the online video repository YouTube has become a haven for Internet denizens looking for a quick entertainment fix.

Miss the great interview on last night’s The Colbert Report? Looking for a sneak preview of the next big blockbuster? Searching out news on the newest computer games? Desperate to see the next chapter of R. Kelly’s patently ridiculous rap-melodrama “Trapped in the Closet”? Curious about the plight of Lonelygirl15, a starlet who carved out a devoted viewership of millions before it was revealed that her story, a teen drama about religious parents and secret love interest, was all conceived as a pitch for a movie?

YouTube offers a virtually unrivaled breadth of video content, but more importantly, that breadth drew 29 percent of all online video traffic — amounting to more than 100 million videos viewed every day — according to statistics released in mid-July. The number has surely increased since then, but its future is starting to come into question.

As many of you have probably heard by now, October 9 saw the purchase of YouTube by everyone’s favorite wonder corporation, Google. Rumors had been flying for days regarding the purchase, but no one expected the price: $1.65 billion. Google’s video service had been an also-ran when compared to YouTube, with a smaller selection of content but the capability to sell video online.

Google’s influence on YouTube will likely be minimal; they are keeping the company’s headquarters where it has been since its founding, and YouTube employees (all 60 of them) are keeping their jobs. What Google’s shopping spree has resulted in, though, is a very strong financial backing for years to come.

That cash will prove to be a useful asset when arguably one of the biggest sources of YouTube’s popularity continues to come under fire. The white elephant in the room is the question of copyright. YouTube is known as the place to go to track down any video clip you want to see; unfortunately, plenty of people want to see material that they don’t own the rights to. And of course Big Content won’t have any of that.

Or will they? On the eve of the deal with Google, YouTube inked contracts with three major content providers — Universal, CBS, and everyone’s favorite whipping boy: Sony BMG. These companies have agreed to provide content to YouTube’s users free of charge. The primary focus of many of these deals, including the one made with Warner Music several weeks back, is music videos. Four-minute clips that are essentially advertising for a new CD are a perfect fit for online consumption, and the labels are realizing this.

The whole world of online video has been growing quite rapidly. Along with YouTube and Google Video’s rise to prominence, the digital media juggernaut known as iTunes has branched out heavily into video content. A year ago Apple announced television shows were available online for purchase, and just last month the company added full-length movies to their repertoire. The service has been a huge success, even though they are charging between $2 and $15 for downloads. The market is there for video content without screwing over the producers — and the producers of that content are finally getting the idea.

The deals with major content producers have virtually ensured that YouTube is in the clear for the time being. What has real potential to change the way the online video business works, though, is new software YouTube is developing to help copyright owners find copyrighted videos being shared on the website. The software will scan a video, determine who owns the rights to it, and hopefully then begin giving the copyright owner revenue whenever the video is viewed.

It’s a rare situation where everyone wins: Copyright owners, the ones who are so desperately clamoring to nickel-and-dime users over every piece of content they control, get a guaranteed revenue stream for their precious intellectual property. Users get to watch free videos with little to no interference. And YouTube keeps its users happy, and in time gains more users, making their own revenue stream grow.

YouTube is in a prime position to redefine how copyright holders think about their content. No longer is the content industry a dictatorship. YouTube has the capability to force content providers to play on our terms. Now that the contracts have been signed, the chips are in play — and YouTube’s killer cards are just starting to hit the table. For a company whose motto is “Broadcast Yourself,” its user base is its greatest weapon. If the users stray because the content producers are cracking down too hard, the content producers will have no way to make their money; everybody loses, and YouTube will become one more footnote in the industry’s history lesson of how not to play.