Mark Cuban, the tech entrepreneur, co-founder of HDNet and owner of the NBA's Dallas Mavericks and owner the Dallas Mavericks, said on Sept. 29 2006 that anyone who buys YouTube, one of the most popular video sites, is a "moron."
YouTube: law suits are coming
Cuban also said YouTube would eventually be "sued into oblivion" because of copyright violations. "They are just breaking the law," Cuban told a group of advertisers in New York. "The only reason it hasn't been sued yet is because there is nobody with big money to sue."
Sorting out the intellectual property rights issues of video on the Web is a thorny issue. That's what Cuban had in mind when he made his comments about why it didn't make sense to buy YouTube.
The site has become so popular with its mix of amateur and professional video that people view 100 million videos there a day. YouTube.com, has provoked a frenzy of consternation among executives of record labels, TV networks and movie studios. For millions of Internet users, the site that opened to the public less than a year ago provides a daily fix of odd and interesting video clips, from White House speeches to frat house pranks.
Risky business?
There have been rumors that YouTube has been looking to sell itself for $1 billion or more, although the site's rising popularity has pushed up its operating costs to an estimated $900,000 to $1.5 million a month which makes buying YouTube a risky endeavor for investors.
Copyright holders may seek Digital Millennium Copyright Act changes if suits against YouTube and its users, as well as other such sites, don't stem the flow of copyrighted material online, HDNet Chmn. Mark Cuban said on his blog. Sites like YouTube now seem to come under the law's safe harbor, but if infringing material continues to proliferate someone "might get mad and try to change the DMCA," Cuban said: "If the lawsuits don't work, then they will give the politicians in D.C. lots and lots of money to get the DMCA changed, again."
YouTube, the giant of dwarfs
YouTube, which has nearly one-third of the U.S. Web video audience, three times that of Google Inc., or twice that of News Corp's MySpace, has been working on signing licensing deals with music companies and TV networks to ensure they are paid when users view their content.
YouTube recently unveiled its first deal to distribute music videos legally from a major music company by agreeing a deal with Warner Music Group, home to pop stars James Blunt and Madonna.
YouTube now offers advertising through banner ads, promotions and sponsorships. It has said it plans to roll out a range of different advertising options over the coming year.
If YouTube overcomes its copyright hazards there is no reason why it could not become a very interesting candidate for a takeover. Set aside the possible copyright infringement law suits, YouTube may well become a multi-billion booming business.
