Digital Journal — There’s not very much that can shake the power of iPod or iTunes. That is until YouTube co-founder Steve Chen says he wants to have “every music video ever created” on YouTube.com within the next 18 months. Then, anyone that works for Apple is no doubt going to start their morning with a spew of profanity.
EMI, the British music group behind Coldplay and Gorillaz, says it is now in talks with the Web TV giant to host music videos and other content on the popular social networking website.
YouTube, which has about 20 million monthly visitors watching more than 100 million videos every day, has confirmed it has held discussions with a number of record labels in a bid to enrich the site with videos. Warner Music Group, the music moniker that was involved in a takeover battle with EMI earlier this year, also says it is in talks with the site.
If YouTube gets its hands on “every” music video, it marks the beginning and end of music as the world knows it. Without more content changes (please no crappy reality shows) channels like MTV and Canada’s popular MuchMusic are going to have to start taking longer summer vacations.
But this news is a lot bigger than MTV: A free YouTube music video service will end the paid-for content business model and will trip iTunes until it falls flat on its face. Numero uno no more.
With YouTube music video revenue set to be provided by advertising, Apple’s dominant position in the online music download scene will be dramatically changed. The company has developed incredible relationships with record labels, but that ain’t going to save their hide — unless Apple goes free or comes up with a new gimmick.
To further complicate Apple’s problem is its technology: Apple uses a proprietary file format that forces its iTunes content to be played on iPod devices. In the long term, this could seriously hurt revenue potential as services like YouTube use much more widely available file formats like Flash video — supported by every Internet browser.
Mark Mulligan, vice-president at JupiterResearch, told the Guardian Unlimited that YouTube likely has the best chance of becoming a free, video-based alternative to iTunes.
“Any service that YouTube puts in place is, almost beyond reasonable doubt, not going to be iPod compatible,” Mulligan said. “If they develop portability — and that should definitely be on the table — then Apple could be in the unusual space of playing catch up.”
Right now, YouTube also holds the powerful position of being able to potentially launch a competitor to the iPod, as many have come and failed to reach the same level of success.
For example, if a company like Microsoft were to buddy-up with the service and launch its upcoming Zune player to be totally YouTube-compatible, there would be an instant competitor for iPod. If no one company makes a deal with YouTube exclusively, there could potentially be dozens of iPod alternatives.
“Either way it is a nail in the coffin of paid-for services as the dominant online model versus ad-funded alternatives,” Mulligan told the Guardian Unlimited.
Earlier this year when Apple renewed its deals with record companies, it was able to hold back the wolves from charging more for certain content like new releases. Now, it might be forced to come up with a new model all together.
YouTube’s desire to get music videos, and its current deals with other companies to host trailers and network TV teasers, is a perfect example of the steps YouTube is making to try and stay ahead of the hundreds of video sites that popped up overnight, craving to get a piece of its lucrative pie.
This news also steps all over Google which has aggressively pursued online video, and AOL which has spent millions of dollars and a lot of time to develop a rich music video experience.
