YouTube buy lends more weight to media deals

The deals between record companies and YouTube take on new meaning since Google's acquisition of the video sharing site

Just hours before Google announced a US$1.6 billion acquisition of YouTube on Monday, both companies separately revealed agreements with major music labels for offering music videos on their respective sites. The deals, especially those between YouTube and the record companies, take on new significance since the acquisition, says one leading industry analyst.

That's because without Google, YouTube would have likely faced a potentially impossible task in negotiating similar deals with all of the major content producers, said Josh Bernoff, an analyst with Forrester Research.

Google and YouTube both must work with content producers to either prevent copyright content from appearing on their video Web sites or to pay for the right to host the content, said Bernoff. Without such deals in place, the content companies are likely to sue the Web site operators for copyright infringement, much like they've done with most of the early digital music sites.

"Let's assume for the sake of argument that 80 of the top 100 content companies make deals with YouTube. The remaining 20 are sufficient to cause YouTube to go out of existence," Bernoff said. Even a single company like The Walt Disney, for example, might have been enough to put YouTube out of business through costly litigation.

However, under Google, YouTube has a better chance of avoiding such potentially crippling lawsuits. "The difference now is that Google brings both incredible technical resources and deal-making resources to this negotiation," Bernoff said.

On the technical side, the content producers are likely to trust Google's ability to create and deploy a sturdy filtering system that could remove unauthorized content from the sites. YouTube has been working on such a solution, but it's a smaller company and the technology still needs to be proven, he noted.

In addition, Google's wide range of offerings puts it in a strong negotiating position with content producers. "If you think of all the different assets that Google brings to a negotiation like that, it's a whole lot easier for Google to come to a solution with Disney then a YouTube," he said.

The record company deals include separate YouTube announcements with Sony BMG Music Entertainment and Universal Music group to show music videos from the labels on YouTube. Google also announced on Monday similar deals with Sony BMG and Warner Music Group. All the agreements include the potential for YouTube and Google Video customers to license content from the relevant music companies to include in their own video creations.

Google said it expects the acquisition of YouTube will improve the user experience on the video sharing site and help advertisers by allowing more video ads on the site. The companies stressed that YouTube will operate independently within Google in an attempt to preserve the site's spirit and brand.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Nancy Gohring

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers


This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang


It really doesn’t get more “gaming laptop” than this.

Jack Jeffries


As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr


The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?