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YouTube's New Deep Pockets
October 10, 2006 11:33 AM
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YouTube has become a cultural phenomenon that is as addicting as it is outrageous. By definition, it is a Web site where members post videos of everything under the sun onto a page where other members can easily view them with a click of a mouse. The site features everything from pornographic videos to artistic visuals, and has recently become educational with the latest addition of a campus section. SF State is one of the school groups that are featured, but with more than 70 members and growing, it is still is in its infancy. “I use YouTube just to watch videos that my friends post up… I also watch videos of other people’s creativity,” said industrial arts major Jeoffrey Batangan. Overall YouTube makes up for 57 percent of all videos viewed online, according to CNNmoney.com. The competition spurred tension between the two Internet giants when MySpace once tried to block YouTube for copyright issues. Copyright infringement has been YouTube's biggest nemesis and was the problem that most critics thought would cause its demise. The pact enables YouTube to avoid any copyright infringements and Warner will be reimbursed for the videos that were already streaming through the Web site for free. Universal Records made harsh comments regarding the Web site just days before the signing, stating that YouTube and MySpace are "copyright infringers" who are said to owe the music industry "tens of millions of dollars," according to a New York Times article. It is safe to say Warner Music Group is catching some heat from its colleagues. "I think it is going to be interesting," Ho said. "YouTube is charting new territory and I think the music industry will be interested to see how the legal issue plays out." The two groups will share the advertising revenues that will be generated by advertisements viewed along with videos. Advertising is YouTube's primary source of income, though their annual income from advertising is a number founders Chad Hurley and Steve Chen will not disclose. The big changes for the popular site have students at SF State excited, but not without worry. “I think Google buying YouTube is just another example of a big corporation buying out an independent company," 18-year-old music major Zach Parks said. "I hope it doesn’t change the content on it because it’s a great site.” As far as the Warner contract, Ho says he hasn’t heard a lot of enthusiasm about the change. When he mentioned the transition to a class of 150 students, no one made a remark. Ho said iTunes is still a big competitor for YouTube as far as the music market goes, but sees great potential in the video aspect. "All of us don't have a Hollywood studio to make videos and to produce them for us, so that is why I think people are attracted to YouTube," Ho said.
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