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FC NOW: The Fast Company Weblog

February 21, 2007

Troubling Times For YouTube

A fortnight after Viacom flooded YouTube with 100,000 Digital Millennium Copyright Act (DMCA) notices its problems continue unabated. In the past two weeks Viacom has chosen to hitch a ride with Joost. Copyrighted content from the Viacom stable of shows will be up on the site soon and in return Joost will share revenue with Viacom.

And now, talks between YouTube and CBS have ended without an agreement.

This may be a sign of further trouble for YouTube. Media companies are becoming increasingly wary of dealing with the hottest video site on the Internet –- one that has a near monopoly over video content on the Web. While negotiating with media companies YouTube speaks from a position of strength. Talks with CBS appear to have broken down as YouTube wanted a five year revenue sharing agreement while CBS wanted a deal with a shorter time frame.

In the Internet world a year can often make or break fortunes, and for CBS, signing a five year agreement would have been extremely foolhardy. Who knows in five years YouTube could potentially cease to exist.

It will be interesting to see whether there is another site (maybe Joost) that will be as popular as YouTube. In the past, with the odds of succeeding stacked against them, media companies had been diffident in setting up their own offerings. (Can any of you remember going to the AOL site to watch video? I tried it out recently and the quality was far better than YouTube’s.) Viacom’s latest move could embolden others as well.

Meanwhile, as YouTube’s troubles increase so do Google’s. After all the $1.6 billion they paid for the company isn’t exactly small change.