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.