Who’s right — Mark Cuban or Warner?

Update:

Mark Cuban says that the Warner deal proves nothing, since we don’t know any of the details, and that it reminds him of when Bertelsmann AG did a deal with Napster not long before the company had to close its doors and file for bankruptcy. You gotta give Mark credit — he sticks to his guns 🙂

Original post

In case you needed any further confirmation that the state of online media is in turmoil, there’s a great example today with the news that Warner Music is working with YouTube to license its music to the massively popular video-sharing site. That’s one end of the spectrum of reaction to what’s happening with media. Then there was Universal Music rattling the sabres at a recent conference, and saying that YouTube was stealing from the label and owed them millions of dollars. That’s the other end of the spectrum.

It’s ironic (or at least a funny coincidence) that just as the Warner deal emerges, former online-media mogul and billionaire sports-team owner Mark Cuban writes a blog post about the decline of YouTube, and how the site is doomed because — among other things — it uses a lot of bandwidth and relies on copyrighted material for a lot of its traffic. As far as Mark is concerned, YouTube is just like Napster and will be hit with the same lawsuits, and likely be found guilty of inciting people to breach copyright, just like Grokster and Kazaa were.

I happen to think that the principle of “fair use” still covers things like using a Talking Heads song as the soundtrack for your kid’s bar mitzvah or whatever, but IANAL (that’s geek shorthand for “I am not a lawyer”). However, Mark also argues that there’s no need for YouTube because the major labels — and by extension the TV networks — can do their own deals and bypass YouTube, and that’s where I think he is most wrong. Sure they could, and they likely will. But why not use the massive traffic and name recognition that YouTube has going for it?

They would be stupid not to, just as the record labels were stupid not to find some way of working with Napster instead of beating it into the ground with lawsuits. Warner Music’s deal may have a lot of question marks still, but it is taking the path of least resistance, while Universal is stuck in the dark ages. Mark Evans has some thoughts too. Oh yes, and Jason Calacanis agrees with Mark Cuban, but he is also wrong. Rafat at PaidContent says that the labels may take a stake in YouTube, and ArsTechnica says that Warner has had a conversion on the road to Damascus, just like Paul.

Update:

Mark Cuban says that the Warner deal proves nothing, since we don’t know any of the details, and that it reminds him of when Bertelsmann AG did a deal with Napster not long before the company had to close its doors and file for bankruptcy. You gotta give Mark credit — he sticks to his guns 🙂

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About mathewi

I'm the chief digital writer at the Columbia Journalism Review in New York, and a former writer for Fortune magazine and the Globe and Mail newspaper.

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