Thursday, June 26, 2014

Was YouTube Pushed?

I don’t believe it’s a coincidence that word of a retreat at YouTube — a new strategy that has been characterized as a partial shutdown — comes just weeks after the end of net neutrality. Most people surely don’t realize how vulnerable YouTube is on the Internet and how easily your Internet provider can interfere with the streaming video just enough to make it an unbearable experience. That becomes all the more of a concern now that it is perfectly legal for ISPs to throttle YouTube videos as much as they like. For YouTube in the post-neutrality era, it makes especially good sense to pursue a strategy of few viewers, less bandwidth, more downloads, and more money to grease the palms of the Internet’s gatekeepers so that the video playback can get in the building when you request a video.

With the protections of net neutrality gone, video streaming of all kinds might run into problems. It is live streaming of political events that faces the greatest peril. The corporate owners of Internet pathways don’t have to let those video streams go through intact if they don’t want to, and it’s pretty clear that most political events are talking about policies that wouldn’t be supported by the average big communications conglomerate.

But most streaming isn’t done to broadcast a live event, but to theoretically protect the ownership of music videos and similar content. If you can download a video, you’ve made a copy of it, and with a copy in your hands, you can watch it over and over if you want to, which is not necessarily what the publisher of the video had in mind. Also, with a copy being made, someone might have to pay rights holders a royalty for that copy. Streaming somewhat sidesteps these issues, but it is important to note that these are very artificial distinctions.

The new YouTube will charge for access and pay much of the money from subscription fees out to record companies. The royalty amount is shockingly low, though — a floating amount, but apparently about 1/4 cent per music video play or download, hardly anything when you think about what people pay to buy a song or an album. Of course, the estimated 1/4 cent is the payment to the record company, not what the recording artist gets. Under the terms of the typical record deal, the money won’t reach the recording artist at all. The record company will keep half and use the other half to cover the cost of producing the video. Or try to — it takes a mountain of farthings to pay for even a low-budget video. Even on Old YouTube, no recording artist can plan on getting that many views, and with the lower view counts of New YouTube, it may never happen again.

If we hadn’t repealed net neutrality, I don’t know if we would be debating the future of YouTube right now. With net neutrality YouTube would have more alternatives and would be able to present a more attractive proposition to its viewers. But with net neutrality in the past, you can’t really fault YouTube for trying something that most of its viewers aren’t going to like. The Internet isn’t exactly a civilized place, and it’s not a huge surprise if advertising revenue is not enough to chase away the wolves at the gate.