Time for Youtube to Develop a New Business Model

This week, Youtube boss Susan Wojcicki called for help against the proposed copyright legislation in EU. The message is old, copyright gets in the way of creativity. And of Youtube’s freedom to monetise other people’s content without asking permission nor sharing revenue. It’s possible to have objections against the copyright reform proposal, but the principle is solid: you make it, you own it, you decide who gets it. Freedom of expression is the right to express one’s own opinion, not the right to distribute material against the will of its creators. Wojcicki says if the rules are enforced it threatens to block content that is already up. So what? If Youtube is in violation, time to start dealing with that problem. If I tap into my neighbor’s electric cabinet for free power, that doesn’t make it right regardless of how many years it’s been going on before I get caught.

Youtube is right to be concerned about the value gap-debate. If licensed competitors such as Spotify pay 5-10 times more per play of a song and Youtube can no longer play the safe harbor-card, it will very likely find it difficult to pay for the content with its current monetization model. They’re simply not making enough money (weird thing to say about Google, but what can you do?). No, you can’t say copyright owners demand too much. That is how markets work: the seller decides the price, the buyer decides whether to take it or not. Sometimes you can haggle. Youtube has been able to bypass the normal market function since inception, but reality (or is that Adam Smith?) is catching up fast. It’s not like Wojcicki can say rent, salaries, insurance, hardware costs or power is too expensive because Youtube has such a new and innovative business model. Content is no different.

It’s about time for Youtube to stop whining and start working on a better business model.