Why Google will lose its multi-billion dollar video bet

In the immortal words of presidential candidate Ronald Regan to President Jimmy Carter “There you go again.” 

Google is at it again, big time, $1.65 billion worth. 

Google’s YouTube copyright owner be damned DMCA umbrella philosophy inspires a YouTuber “broadcast yourself” by uploading pirated videos owned by television networks mentality.

I have oft stated that the Google magic is fueled by its uncanny ability to wantonly sell ads against “the world’s information” even though it has not compensated the content owners for the information and it has no explicit legal right to exploit the information commercially. 

Google is one upping itself, however, as the proud new corporate parent of YouTube. Not only does Google allow any piece of video content in the world to be uploaded to YouTube irregardless of ownership rights, it chastises any content owner that dares to interfere with the Google plan of never paying for content that drives its $150 billion market cap:

It is unfortunate that Viacom will no longer be able to benefit from YouTube's passionate audience which has helped to promote many of Viacom's shows...The biggest feeling we have now is regret that Viacom may miss out on the chance to interact with the YouTube community (see “Google vs. Viacom: Good cop, bad cop?”).

Google is undoubtedly not displeased that YouTubers are also happily in the anti-Viacom camp, threatening to “go after Viacom” (see “YouTube: Is Viacom hurting innocent YouTubers?”).

Google CEO Eric Schmidt at the company’s 2006 Q4 earnings call:

We are encouraging copyright owners to submit content to us and then to measure how many fans, how many tremendous viewers, what that community is… that's a very, very qualified viewer.

Google is NOT encouraging content owners to expect compensation from Google, however, for its for-profit use of their copyright content.

Google’s you need us more than we need you position towards television networks is untenable. The YouTube clip-culture fare in demand from YouTubers is television network content, not “friends and family” broadcast yourself videos.

Viacom’s MTV underscored its content supremacy at the Davos World Economic Forum (see "Who needs Google? CBS vs. Viacom vs. NBC”):

We’ve seen that our content has remained very popular and that the majority of page views on social networking sites are for professionally produced content.

Google needs television network content to feed its YouTubers the clip-culture snacks they want, more than television networks need YouTube for “free” promos.

 

Google’s days of “ignoring conventional wisdom in designing its business” are numbered.