The Dangers of YouTube — for Marketers, Anyway

January 6, 2008
By Karen J. Bannan

BI interviewed Scott Madlener, executive vice president of Interactive for Performance Communications Group. Here’s what Madlener, who suggests ISATVideo as an alternative to YouTube, had to say.

KB: How are marketers using YouTube?

SM: Marketers from large and small companies understand the benefits of using video online. People like video, it’s that simple. So the first question they ask is, “How can I get video on my web site?” It’s important to break this question into two parts, video production and video distributing. We’ll only discuss the distribution aspect, which is what services like YouTube provide.

YouTube primarily provides a free service for people to upload and host their videos. There also is an opportunity for marketers to pay for distributing their videos via YouTube, but most companies elect to use the free service.

KB: Why do you think this is a problem?

SM: People get blinded by the ‘free’ aspect and fail to understand the associated soft costs, which can turn into real expenses. Most marketers do not understand the impact of the user agreement that they sign when distributing video through YouTube or similar services. Specifically, “By submitting User Submissions to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sub-licensable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website and YouTube’s (and its successors’ and affiliates’) business, including without limitation for promoting and redistributing part or all of the YouTube Website (and derivative works thereof) in any media formats and through any media channels.” –Section 6C of the YouTube User Agreement.

This means you are giving YouTube the same ownership rights to your video that you have. That might not seem like a big deal, even if you have obtained releases or buy-out rights for your talent, music, and images. But, those rights typically don’t allow for transferability to another company like YouTube. So, what happens when the employee featured in your video gets fired? What happens when you use an existing training video and don’t know what rights you have? Many companies don’t know the answers to questions like these and therefore leave themselves open to potential liabilities.

Additionally, there are branding, quality, size, duration and other usage limitations which, long term, can prove to be expensive as well. Free services like YouTube make their money through advertising, so their players contain programming that directly displays advertising and shows a selection of other videos of similar interest after the primary video is viewed.

Typically, once a company gets a visitor to their site, the last thing they want is for that visitor to leave due to their curiosity about other videos. The other videos are usually selected by YouTube based on keyword matches to the video title. I recently watched a commercial on a known sports site that promoted their sports merchandise. The commercial had “rabbit” in the title and the selection of videos, which YouTube presented at the end, included videos about bunny rabbits as well as some inappropriate videos. Not exactly the kind of content with which a company wants to be associated.

KB: How will this model evolve?

SM: The basic model is paid subscription versus advertising-based services. Commercial video adds a new dimension and raises legal issues that are not likely to go away given the current Hollywood writer’s strike, which is focused primarily on Internet royalties.

As both the Internet and online video mature, marketers will begin to understand that video can be used in conjunction with secured direct response vehicles, such as data capture and ecommerce. Marketers are likely to demand the use of ‘hot spotting’ within a video to promote specific featured items and then will begin to use video for daily or near real-time communications. These are features that will only be found with paid services.

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