Almost every consumer electronics company and large website has a way for people to download songs and pay for them. Even Nokia (NYSE: NOK) has set up its own system to help it sell its handsets.
Now Google (NASDAQ: GOOG) wants in. It will allow users of YouTube to download songs from Apple (NASDAQ: AAPL) iTunes or Amazon's (NASDAQ: AMZN) service. A YouTube visitor can watch a music video and then get the music. According to The New York Times, "If you like the song, you don't need to leave Google or leave the site to buy it," said Bakari Brock, business affairs counsel at YouTube.
Google may have trouble making money on YouTube, but the program is probably not the answer. The system supposes a radical change in online behavior where most people looking for songs go to music download sites such as iTunes and people who want to watch low-quality video go to YouTube. A music video on YouTube allows consumers to listen to a song for free. That may undermine getting people to pay for it, and some YouTube visitors may just pirate the music.
The new service is an example of how the failed economics of online video and social websites such as Facebook have forced the companies to do nearly anything to bring in money. The faltering online advertising market will probably increase the number of these programs, but that does not mean that they will work.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
10-08-2008 @ 1:19PM
Beltway Greg said...
Actually the one plan that isn't nutty is ITunes. But you already knew that.
Beltway Greg
10-08-2008 @ 5:54PM
Randy O said...
Well I was hoping to beat YouTube to the punch on making an announcement. I have been developing this on my site http://NowScene.com. It seemed only logical for YouTube which is now becoming the place for artists to get exposure, to incorporate links for people to purchase MP3s. I show a link to Amazon next to every live music video I display. Works pretty well. But because the video title also contains location information. I inform my customers to click the link then remove any extra text from the artist information for better results. But I will make improvements in the future.
More power to YouTube's success with this. I certainly believe in the concept since I developed this too. More improvements in the future since this the site is still early stage. But I wanted it documented that I did this first before YouTube made their announcement today.
-Randy O
Founder http://NowScene.com
10-08-2008 @ 9:05PM
GeorgeS said...
It can only help to try. Then the question is how many items are really available on the market at the moment. You likely press the link and be taken to the general itunes store, then to find in your search that it's not available. The link doesn't mean it's available.
I checked MySpace's plan and don't see where all the songs are they're supposedly making available.
10-09-2008 @ 11:14AM
David K said...
Damn, I've read a lot of nutty business commentary lately this is by far the most obtuse analysis of internet business that I have read in a long, long time.
Aggregating and then monetizing great content through performance based advertising sponsorships (which is what this deal is), is exactly how GOOG became the 100 billion dollar gorilla that they are. Apple is not getting into the music retail business, they are merely applying their advertising expertise to the music industry. If they can do for iTunes what they've done for millions of other advertisers, this could be a very productive marriage. Google would not have invested in the integration if music videos weren't a MASSIVE part of the consumption on YouTube - and YouTube users already interact heavily with the video content via reviews etc. There is a VERY good chance that this will be a busy sales channel.
Doug - dude - you have no clue - go write about sport or something else and leave the business stories alone.
10-10-2008 @ 11:30AM
David K said...
Correction - the above should read ...
"GOOG is not getting into ..."
I'm sure you get the idea.
10-09-2008 @ 3:09PM
Learn and Master Guitar said...
Online music is becoming the most common factor... and now the google is coming it can be a great effect.
Learn and Master Guitar
10-11-2008 @ 5:19PM
sitruc said...
What happened to reply?
Anyways... you must be new to this site, David K, if this is "by far the most obtuse analysis of internet business" you've read.
10-14-2008 @ 3:36AM
Nick said...
thanks for this post...
http://www.learnandmasterguitarreviewed.com