I had the pleasure of seeing Mark Cuban speak recently at BlogWorld Expo. One of the topics he covered was an interesting assessment on why YouTube hasn’t yet fully monetized the potential ad space on the site. Fortunately Mark has laid out his point previously in a blog post.
The fundamental business issue in claiming protection behind the DMCA is that it requires Youtube to not know what videos are on its site. Unless an uploader is copyright owner that has signed a deal with Youtube giving them knowledge of the videos they will be uploading, by law Youtube can’t have any idea what videos are on the site or where.
Think about that for a minute.
How hard is it to sell advertising around content when you have no idea what the content is ? Its impossible. Its like selling advertisers a lottery ticket , and we all know how good an investment a lottery ticket is for the ticket buyer. For some reason the media seems to think that there isn’t advertising on Youtube because of advertisers fear of User Generated Content. Thats not it. Volume impressions are still sellable. As is volume video. There is a huge market for mass video. Unfortunately for Google, they take a huge risk of liability from the DMCA in generating revenue next to copyrighted materials they don’t have permission for. So to play it safe , they don’t sell advertising around videos they don’t have licenses for.
Interesting. Always seems that the real story is so much deeper than what we tend to hear, eh?