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October 09, 2006

Mark Cuban: Not backing down on YouTube

Steve Rosenbush

Last week, billionaire Internet entrepreneur and Dallas Mavericks owner Mark Cuban said he thought anyone who bought YouTube was a moron. link. Now that Google has agreed to pay $1.65 billion, is Cuban standing by last week's assessment? "Of course I do. I think they put themselves in a small upside, big downside position. But that's what makes talking about this fun. Congrats to the YouTube guys," he said in an email to be earlier today. The issue, Cuban says, is that YouTube faces some of the some legal pitfalls that destroyed Napster. The company ran afoul of copyright law.

YouTube and Google management insisted Monday that all copyrights will be respected. But Cuban says that could be part of the problem. "If all copyrights are going to be respected, they are going to have to take down millions of videos. There is also the question of whether YouTube can really be YouTube if every video has to be checked, even if electronically, for copyrights and then approved by the copyright owner."

Cuban also raises the point that content owners are are willing to live with online distribution of their programming may balk when it comes to digital manipulation of their work by others. "What happens when an artist decides he/she doesn't want that particular person lipsyncing or some gay couple in drag is smooching to the latest Christian release and the label objects?" Cuban wonders. He makes the argument at length on his blog, Blog Maverick.

But just because someone can sue, doesn't mean they will. Some observers believe that copyright holders in the film and TV world are much more eager to take advantage of online distribution than the music industry was a few years ago. Investment banker Ken Marlin, of Marlin & Associates, framed the issue this way in an email to me earlier today:

"No, I don’t believe YouTube faces big risks from copyright holders. First, the bulk of their content is user-created and copyright issues are not applicable. Second, they have already begun reaching out to copyright holders to work out deals with them. Third, the copyright holders learned from their Napster debacle. They now realize that they can’t stop technology any more than they can stop the tide – and further, it’s not a zero-sum game. Electronic file sharing companies are creating a new business category. There is an opportunity to generate revenue where none was generated before. Thus, the copyright holders are no longer looking to stop the YouTubes of the world, instead they are seeking to embrace them and share revenue with them."

08:03 PM


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