|YouTube and Warner in 'landmark' music deal|
|It means interviews and videos by Warner's artists can be used in return for a slice of advertising revenue. |
The agreement also covers the use of material in homemade videos, which form a large part of YouTube's content.
Both companies hailed it as a landmark agreement, coming days after Universal Music said it was considering legal action over sites such as YouTube.
Will they make peace with Universal and end the lawsuit?
[edited by: Birdman at 5:51 am (utc) on Sep. 19, 2006]
|The technology would also enable Warner to review homemade videos and decide whether to approve or reject them. |
youtube buys copyrighted warner content with its adsense money. indeed, an interesting deal.
Apparently, Warner has not done the math: Take a video that is being shown 100,000 times. Let's assume a CTR of 1%, which is still on the high side because peoplecome to YouTube to watch videos - not to click ads. That's 1,000 clicks. With Adsense they might be getting 0.02 to 0.05 $ per click (the Adsense ads are quite untargeted, a clear sign for low EPC). So the overall turnover for these 100,000 views is $50 - yes, fifty dollars! And this shall be SHARED? Warner will be surprised to see how little they actually will be getting from this "landmark deal".
mzanzig's math looks right to me. But, I think the deal is just to establish that $ must be paid. At this stage of the game, it's sweet exposure for the artists to build audience--little is lost is terms of income now.
You think newspapers have had trouble making the ad model work on the web? Video is really going to be tough. You want to read it or see it or listen to it--pay will be the only way soon.
More information in the press release [investors.wmg.com].
|Warner will be surprised to see how little they actually will be getting from this "landmark deal". |
hehehe, if you calc with a click-through of 5%, the whole thing is not getting any better...
from the other home page thread about MS/youtube:
"YouTube had 34 million visitors last month, according to Nielsen/NetRatings, while MSN Video attracts about 12m."
34M visits - lets be nice and say 50M pageviews, and all of these pageviews carry blockbuster converting AdSense with a 3% CTR?
= 1.5 Million AdClicks... per month with a 10 cent per click
= 150.000 US$ revenue per month
Sorry, but I know at least 3 WebmasterWorld members doing more ALONE or with 2-3 interns!
Where is my calculation error? Even if you double everything - we are back in BS new economy calculations?
|34M visits - lets be nice and say 50M pageviews, and all of these pageviews carry blockbuster converting AdSense with a 3% CTR? |
I admit that their service is quite sticky. Thus I would rather assume that they are in the 150M-200M pageviews area. However, because their site is so sticky, I would argue that their visitors do not even SEE the ads. Their visitors are so focused on seeing the videos that complete ad blindness sets is. The ads not being on target (BTW, why is that?) does not help. Thus I regard a 1% CTR as optimistic. Funnily enough, 150 M x 1% is again 1.5 M clicks.
Again, I think this is very optimistic.
|150.000 US$ revenue per month |
Yeah, that's hardly an amount that will make Warner happy, especially as they are getting just a share of this. :-) I bet these moguls are used to higher amounts.
One thought stroke me though - what if YouTube works on video ads played before the video file? OK, they would be even deeper in the copyright discussion (in this case they would be benefiting directly from any copyright protected content). But then again, they might be able to get rid of Adsense and charge much higher CPMs comparable to real TV stations, possibly even higher because the ads would be (hopefully) targeted.
But as I said, in this case the copyright owners will be after YouTube and sue the hell out of them.
|Even if you double everything - we are back in BS new economy calculations? |
Yes, you are right. Some guys in a Garage build a business around stolen content and free hosting and hope to monetize their service while the seed money lasts. Sounds very much like Web (Bubble) 2.0 to me.
I always thought that they were hoping for acquisition, but this is unlikely to happen, especially with all the copyright infringement that's going on there.
imho the fact that youtube seems to almost exclusively use adsense demonstrates how difficult it must be to monetize their site.
- how incompetent they are in approaching other advertising partners
- how insufficient the whole online advertising market still operates
huge brand name showing ridiculously targeted ads from a bread-and-butter network.
and 100.000$/month would be my estimation.
[edited by: moTi at 3:18 pm (utc) on Sep. 20, 2006]
Advertising and content are not mutually exclusive here. YouTube is not an MFA, so you really shouldn't evaluate it as such.
Why focus on the AdSense, when they're only getting a "slice?"
I'm sure Warner isn't focusing on the Google money.
That video (or interview, or movie clip) with a Warner artist (or from Warner's catalogue) that was viewed 100,000 times and only made 50$? Most of the advertisers are probably selling mp3s, CDs, DVDs... of that same Warner artist. AND, more importantly, the content is building up the brand of the artist (or movie), creating new fans in the process.
I highly doubt that this agreement did not take into account the massive exposure that YT offers to fledgling major label artists (and indie flicks distributed by the big guns).
In my opinion, this deal slights YT, since Warner will get a cut of all advertising, regardless of where the content comes from. This almost prohibits YT from displaying video owned by other media.
Although, I would have thought that YT got more like 3 million hits a day (100m/month), not 1 million (34m monthly as has been stated).
|In my opinion, this deal slights YT, since Warner will get a cut of all advertising, regardless of where the content comes from. This almost prohibits YT from displaying video owned by other media. |
Let me rephrase that:
YouTube is currently prohibited from displaying copyrighted works by law (as are you and I). This is a licensing deal whereby YT can legally display works in the Warner catalogue, because Warner is getting a slice of their revenue.
The problem will arise when YT tries to display works owned by, say, Sony or BMI. BMI or Sony will not likely cut a deal with YT because part of its revenues are already siphoned off to Warner (more importantly, part of the ad revenue generated by said Sony/BMI artist will be going to their competitors).
Unless the Warner cut of the advertising is exceedingly small (~10%), it leaves YT little room to negotiate with other content providers, thus creating an opening for a competitor.