YouTube and media companies locking artists out of their piece of the pie??

October 31, 2006

There’s so much speculation flying around after Google’s acquisition of YouTube. How will they make money from it? How will they deal with copyright? When will the lawsuits come flooding in? How will they compensate media companies? And ultimately; How will they compensate the artists?

I haven’t seen a decent explanation of the whole deal and the thinking behind it until just now. Mark Cuban has a piece posted on his blog detailing the thinking behind the deal, both from GooTube and the media owners points of view. It makes for quite scary reading! The gist of it reads that the media companies have no intention to pay artists and thats why they opted for equity prior to the buyout (to lock the profit in as an investment, and to make a profit once the buyout happened).

Quite how much is true I’m unsure. Some of it certainly rings true with me, such as the reasons for getting the media companies on board and the manner in which that has been achieved. I would wonder when the SEC will get involved though…

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