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YouTube is doomed, says analyst
And it's not the only one to think so...

By Greg Sandoval

Published: Tuesday 03 October 2006

Another internet research company has predicted doom for YouTube's business model.

Copyright issues that have plagued video-sharing site YouTube since its official launch almost a year ago will mean "YouTube will get sued. And it will lose", according to Josh Bernoff and Ted Schadler, analysts for Forrester Research, writing on a blog posted last week.

Lawsuits will trigger a chain reaction, according to the analysts, in which YouTube will be forced to remove all copyrighted material - and that means excising most of the professionally made content. What's left will leave YouTube with videos that are "a lot less interesting", said the Forrester analysts.

YouTube representatives did not respond to an interview request.

The Forrester opinion comes three months after research firm IDC came to a similar conclusion and less than a week after HDNet founder Mark Cuban told a group of advertisers "only a moron would buy YouTube". Both Forrester and IDC research companies argue YouTube will face the same battle fought and lost by file-sharing site Napster.

In a now-famous court case, Napster argued unsuccessfully that it wasn't responsible for people misusing its file-sharing system to steal music.

YouTube says much the same thing. Most of the material on the site is homemade, meaning that the video's creator is the same person who posts it to the site. However, some YouTube fans violate copyright law by sharing video of copyright material from movies, music videos and TV shows.

YouTube executives immediately pull down any clip once a copyright violation is brought to their attention. The company, which sees more than 16 million visitors per month, is also creating technology that will help identify and block pirated material.

It has also proven it's not at odds with some of the most influential entertainment companies by cutting marketing and advertising deals with the likes of Warner Music and NBC. But that won't be enough, said Forrester.

The analysts wrote: "You may tell me that companies like Warner Music are happy to work with YouTube, just as Bertelsmann was willing to work with Napster. But for every company that wants to do a Warner-type deal, there will be others like Universal that won't stand for it.

"It only takes one unhappy media company - Disney, Sony, CBS or News Corp for example - to force the company's hand. And the cases on this point, from Napster to Grokster at the Supreme Court, are clear."

Greg Sandoval writes for CNET News.com