Interesting article on Read/WriteWeb about how YouTube is thriving despite the fact that much of its content is copyrighted by others. The basic business model is simple: if a content owner finds its content on YouTube, it can ask for the content to be removed — or it can choose what ads should be shown next to it, and presumably take a profit from the ads. Apparently many content owners are choosing to let YouTube keep their content live, because they benefit more by having it seen by the YouTube crowd than be preventing its borader sharing.
This development is exciting for the file-sharing crowd, because it offers a potential path for broad sharing of information, in increasingly creative ways. However, there are important limits to the potential benefit. The simplest to understand is that mashups are likely to not thrive under the advertising business model. In most collaborations everyone thinks they’re pulling more than their share of the load. Thus, the owners of the content in a mashup are likely to each individually want more than their share of the advertising profits. (This problem is exacerbated by the fact that profits in this model are mostly shared after the popularity of a video is known; as founders of startup companies know, doing a deal before you know how much value you’re splitting is easier.)
The deeper problem is that this approach to enabling creativity only works in an ad-supported content model. There are cultural risks to offering large companies the most access to people’s attention. Over the long term, it might be healthier for people to directly pay for the media they wish to consume, but the YouTube approach is continuing us along the ad-supported path.