YouTube has long had a thorny relationship with big media companies, some of which have sued Google's video-sharing site for illegally distributing their copyrighted content. But now YouTube appears to be playing nice by sharing a piece of the ad revenue pie with the big boys.
A TechCrunch report states that YouTube will soon give its media partners a cut of the revenues from their videos that appear on the site, regardless of who posted them. Google will expand a program that lets media firms sell their own ads on YouTube, the report states. Currently, only a few of YouTube's media partners do this. CBS, for instance, sells its own ads for videos that appear on its YouTube channels, as well as for content uploaded by users, provided the clips are detected by YouTube's Content ID system. The expanded program will likely kick in by the end of the first quarter.
YouTube's decision is important on two fronts: First, it could make peace with media conglomerates (e.g., Viacom) who've long complained that they're getting ripped off when common folk upload, say, unauthorized Spongebob Squarepants clips. And it has the potential to generate significant revenues down the road-something that Google has struggled to do since buying YouTube in October 2006.
The media giants would be smart to play ball with YouTube, which is easily the top online video property with nearly 100 million viewers in October 2008, according to Internet tracking firm ComScore.