Tuesday, October 31, 2006

Interesting information behind Gootube

Here is an excerpt from a very interesting "supposed insider" posting (courtesy Mark Cuban's blog) - if this part is true, when would Metallica say? :)

The media companies had their typical challenges. Specifically, how to get money from Youtube without being required to give any to the talent (musicians and actors)? If monies were received as part of a license to Youtube then they would contractually obligated to share a substantial portion of the proceeds with others. For example most
record label contracts call for artists to get 50% of all license deals. It was decided the media companies would receive an equity position as an investor in Youtube which Google would buy from them. This shelters all the up front monies from any royalty demands by allowing them to classify it as gains from an investment position.

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