Speculation on Google / YouTube "Hardball"

An anonymous reader writes, "Interesting speculation on the 'GooTube' deal, oozing with corporate intrigue. Based on Mark Cuban's blog and a subsequent ZDNet blog posting, it seems as though there might have been some dodgy goings-on just prior to the deal. In short, YouTube may have handed the major labels approximately $50M so that the labels would turn a blind eye to the copyright infringements AND go after the competition to cement YouTube's position in the market. Universal started the ball rolling a week after the deal by suing Bolt and Grouper." Cuban's blog does not identify the author of the speculation, who calls himself "an experienced veteran in the digital media business." Cuban writes that this is someone he "respects and trusts."

Comments

Translation:

[Anonymous Coward]

"In short, YouTube may have handed the major labels approximately $50M so that the labels would turn a blind eye to the copyright infringements AND go after the competition to cement YouTube's position in the market."

You mean... like... pay licensing fees? And encourage them to prosecute those who don't?

Re:Translation:

[Anonymous Coward]

You mean... like... pay licensing fees? And encourage them to prosecute those who don't?

From TFA: The media companies had their typical challenges. Specifically, how to get money from Youtube without being required to give any to the talent (musicians and actors)? If monies were received as part of a license to Youtube then they would contractually obligated to share a substantial portion of the proceeds with others. For example most record label contracts call for artists to get 50% of all license deals. It was decided the media companies would receive an equity position as an investor in Youtube which Google would buy from them. This shelters all the up front monies from any royalty demands by allowing them to classify it as gains from an investment position.