YouTube sells out

Of all the racy videos that Samantha Mack, an exotic dancer from Vancouver, has posted on YouTube, she still can’t figure out why that one got banned. Earlier this month Mack uploaded a video, in which she dons a bright bustier and various bikinis, to promote a breast cancer charity event. By the carnal standards of the Internet, it was downright innocuous. Even so, 19 hours later the company sent her a message to say it was inappropriate and had been removed.

“They say YouTube is not for porn­ography, but are they considering me grabbing my boobs and saying, ‘These should be cancer free,’ to be pornography?” she asks. “I was alarmed.”

Many people are quickly realizing YouTube isn’t the same lawless haunt it was even a year ago. The past couple of months have seen a number of instances in which YouTube either yanked videos or made them virtually impossible to find. In some cases movie and music studios claimed the videos unlawfully used their copyrighted material, while in others complainants were merely offended by what they saw.

Not coincidentally, the clampdown comes as YouTube finally begins to attract major advertisers. It’s all adding to a growing backlash against the site, which Google bought in 2006 for US$1.6 billion. But what angry users see as the gentrification of one of the most unruly and entertaining corners of the Web, Google sees as the ticket to finally making its massive gamble pay off.

There’s no question YouTube dominates the online video sector. In March, users viewed more than 13 billion videos, giving the site 41.8 per cent of the market, according to Comscore. The number two site, Hulu, which airs TV and movies accompanied by commercials, attracts a tiny 3.4 per cent of online video viewers. Despite those staggering numbers, YouTube has struggled to turn a profit. Just last year one investment analyst predicted the site would lose US$470 million in 2009. The problem has been that YouTube makes big brand advertisers squeamish. The site has been variously described as a “rogue enabler of content theft” with a business model that is “completely sustained by pirated content.” Who said such things? None other than Google executives themselves as they debated whether to buy the company. That revelation recently emerged as part of a US$1-billion copyright infringement lawsuit the media company Viacom launched against Google in 2007.

Nowadays, though, YouTube users searching for certain types of content increasingly get error messages saying the video has been removed for breaching the site’s rules. In April, a German studio began to crack down on thousands of parodies of its 2004 film Downfall, which retells Hitler’s last days. Using a scene in which Hitler, facing defeat, furiously rails against his generals, people insert alternative subtitles related to mundane issues, such as Michael Jackson’s death or the launch of the Apple iPad. Many of the videos are still available, but others have already vanished.

Similarly last month, there was a flurry of reports that a provocative music video for the song Born Free, by British artist M.I.A., had been taken down because of its extreme violence. That wasn’t quite true. The video is still there. It’s just that YouTube has made it next to impossible to find through its search engine. Both cases drew intense criticism from users, who say YouTube has caved to censorship, infringed on free speech, betrayed its users and is simply becoming a bore.

But boring, it turns out, may be better when it comes to making money. Users who spend any time on the site are now bombarded with pop-up ads in videos. Meanwhile, major advertisers like FedEx and WestJet have begun advertising heavily on YouTube’s home page. In March, Mark Mahaney, an Internet analyst at Citigroup, predicted that in 2011 YouTube will generate US$1.1 billion in revenue from its ads. “The big thing that’s changed is that YouTube is doing a far better job of defeating copyright infringers than they did in the past, so there’s less risk advertisers will find themselves up there with stolen material,” says Will Richmond, an industry analyst at VideoNuze.com.

The fact is, the era of two guys in a garage running a Wild West online video site is dead. “There’s no business model there,” says Richmond. “You need advertising, and once you want to get into that, it has to be a clean site.” In other words, YouTube has to behave a lot more like a buttoned-up traditional TV network if it wants to make serious money.
Even Mack has seen the upside of YouTube’s efforts to cash in on all those eyeballs. After her breast cancer video was yanked, she posted a second video in which she mocked  those offended by her earlier clip. When the number of viewers spiked, YouTube sent her an email asking if she’d like to start selling ads on the video.