YouTube riches: Social video production or social video pirating?

How did Chad and Steve get rich?
Written by Donna Bogatin, Contributor on
Nicholas Carr underscores that YouTube founders Chad Hurley and Steve Chen each pulled down about a third of a billion dollars in selling their video-sharing company to the search giant Google, asserting they “came by their windfall fair and square.”

How so? “They built a better mousetrap,” says Carr.

Perhaps, but what video mice does YouTube trap?

CARR: Software is becoming increasingly more adept at taking over work that has traditionally required relatively high skills - or even, in YouTube's case, enabling the creation of sophisticated goods through the large-scale and automated harvesting of free labor.

What is the value that YouTube is really harvesting and using for “free,” though?

Is the YouTube magic really the enabling of a “creation of sophisticated goods,” or do the YouTube riches stem from the facilitation of the theft of others’ already created sophisticated goods?

Carr posits that “running a digital sharecropping operation…can be very lucrative.” But is it really the “broadcast yourself” video crop at YouTube that enticed Google to give up $1.65 billion worth of GOOG?

Is Berkman Center for Internet & Society at Harvard Law School’s former Senior Fellow Jim Moore’s now infamous “Sunday nite dinner at Redbones in Somerville, Mass” “broadcast yourself” video evidence of YouTube’s bountiful social production harvest?

(See “YouTube: Is Viacom hurting innocent YouTubers?”)

Moore is actually getting more value from YouTube in the free hosting of his “fiends and family” clip-culture video than he provides to YouTube in exchange.

Why? Moore’s video is of extremely limited appeal and can only command “junk” CPMs for the small number of views it engenders.

Moore’s colleague, John Palfrey, Executive Director of the Center, acknowledges the non-interest, economic or otherwise, of the “home video,” but nevertheless is vigorously defending Moore’s “right” to broadcast it, for free, at YouTube. 

PALFREY: I love Jim, but the video’s pretty bad. Highly unlikely to be affecting any market that Viacom cares about, among other things. 

(See YouTube: Are YouTubers at risk?”)

Moore’s “Sunday nite dinner at Redbones in Somerville, Mass” may be “pretty bad,” but the personal, “pretty bad” friends and family fare is representative of YouTube’s “broadcast yourself” video uploads. 

Palfrey knows that Moore’s “home video” is of minimal import in the YouTube economic world, and so does Google. 

What videos are of prime economic importance then to Google’s YouTube future? The high production value, supposedly copyright protected video libraries of television networks such as Viacom, NBC, Fox…

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

(See “Why Google will lose its multi-billion dollar video bet”)

I underscore that Google needs television network content to feed its YouTubers the clip-culture snacks they want and conclude: Google’s days of “ignoring conventional wisdom in designing its business” are numbered. 

Why? NBC, Viacom, Fox…are not running sharecropping operations, they must pay premium wages for the production of their premium video content. 

Television networks must therefore obtain premium compensation for the use of their copyright video content, even if Google doesn’t agree, yet. 

ALSO: "Who needs Google? CBS vs. Viacom vs. NBC” and “YouTube: Will TV networks call Google’s bluff?” and "Can Google buy its way to future success?"

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