thoughts unplugged

Chad Hurley announced that YouTube will soon be adding revenue sharing. It’s the right time for two reasons:

1. As Chad points out, it allowed them to build a community around videos and not money. However, they might not have conceived of the revenue sharing idea from the start and might just be pointing that out after the fact.

2. It allows them to crush sites which rely on the revenue sharing model.

I think this is an important business lesson for those other video sharing startups competing with YouTube. A feature (social networking, revenue sharing etc) is not a business model in itself. It gives you a small boost but it has always been about community. If you don’t take advantage of that small boost quickly enough, your competitor assimilates that feature and crushes you. Social networking, revenue sharing, tagging etc will all just become standard features. The winners will be determined by branding and how they market to their communities.

But sharing revenue with users isn’t the big news here. Sharing revenue with the original artists through audio fingerprinting is. Now that is something the big media hunchos would be interested in. No doubt they’ll complain about how it still isn’t enough. They will push back. But it’s a huge leap forward by YouTube.