I Link You

It was inevitable...

According to Information Week, Universal Music Group is accusing YouTube and MySpace of copyright infringement by posting its artists' music videos. Universal chief executive, Doug Morris, describe both sites as "copyright infringers" during a Merrill Lynch investors' conference speech on Tuesday that was closed to the press.

Quotes from his speech include the following:

"The poster child for (user-generated media) sites are MySpace and YouTube," said Morris, according to a transcript obtained by Reuters. "We believe these new businesses are copyright infringers and owe us tens of millions of dollars."

He added, "How we deal with these companies will be revealed shortly."

Well, I knew this was going to happen. Although YouTube's original purpose was to allow users to share and distribute their own vidoes, the site was quickly filled with copyrighted content ranging from the Daily Show to motion pictures. I have to admit that I watch many of my TV shows via YouTube because I hated watching commercials or couldn't see those shows at the specified time.

Last month, YouTube was discussing with record companies the possibility of hosting music videos on its site and proving them free for the site's users. YouTube is still operating without any profits despite its rapid ascent as one of the most viewed sites in the world. Business models for web 2.0 still have yet to take shape as advertising revenue will not be nearly enough.

Welcome to the twenty-first century, I say. Since the internet is breaking down barriers and lowering distribution costs, the current business models of large record companies are not working anymore. It's not surprising that these companies are trying to milk whatever they can due to declining sales. This is prime example of how large record companies need to face the facts. Old business models won't make profit anymore. These record companies need to be more innovative and cater to their consumers. That's why YouTube and MySpace enjoy immense popularity because it caters to the user.

It'll be interesting to see if Universal takes any legal action. I'm still waiting on Friendster to take some legal action on its social networking patent it won earlier in the year.

posted by Koh @ 4:30 PM