I wonder if the founders of youtube would have known from the start that they had to pay performance royalties for the use (‘web-casting’ anyone?) of music, film and tv productions on their site, would they have discarded their business idea?
Okay, youtube probably had been created for people to upload their own private videos, but the fact that users would also upload music videos and their recordings of tv shows must have been obvious to the site’s creators and potential consequences could, well, should, have been considered: Paying performance fees to the collecting societies or screening uploaded material in order to keep chargeable content off the site (thus hiring quite some staff).
With that being ignored, youtube seems like a wrongful business plan. When drafting a business plan you would probably consider taxes and other fees imposed by authorities. Can the youtube model be legal simply because its creators have forgotten about such issues? Try to evade taxes and tell the IRS you just didn’t know…
Other sites that stream free music while paying its composers from advertising income (such as we7.com, ubetoo.com) have shown how difficult it is to meet the music industry’s financial standards. Ubetoo currently can’t afford to pay more than a cent to artists for a single stream of their song.
I assume that with all unpaid performance royalties youtube must be in severe debt. Nevertheless, google acquired it for a fortune. Who would acquire a business that is either in debt, not legal or, at least, not “OK”?
With the Federal Court’s current ruling against file-sharer Limewire is it a matter of time until youtube will be next?
This post is a reaction to “GEMA breaks off negotiations with youtube“.