Reel Pop

YouTube has a good copyright defense, but apparently that wasn't enough for Google. Today's exercise in uncomfirmed scuttlebutt comes from Mark Cuban, who is still trying to justify calling Google "idiots" for buying YouTube and has now quoted an anonymously sourced insider account of the YouTube acquisition. According to the source:

• YouTube sold equity to Sony, Universal and Warner the morning before the Google acquisition so those companies could classify the deals as investments, not licensing, and this wouldn't have to pay the artists they represent.
• Google and YouTube have apprently put 1/3 of the purchase price, or $500M, in escrow to deal with eventual copyright lawsuits, but the music labels agreed not to sue for 6 months.
• But meanwhile, the music labels agreed to sue other competitors in the video-sharing space.

Like most conspiracy theories, this one makes sense on a lot of levels. It answers why Universal sued Grouper and Bolt but ignored other sites which are just as egregiously sharing copyrighted clips. It also neatly explains why YouTube's content deals coincided so closely with the Google acquisition announcement.

If this account is true -- and really, who knows?  -- it looks like a win-win for everybody except the artists. YouTube gets time to grow and sign more content deals, making lawsuits less likely with each one. Google gets the eventual benefit of that growth, as do the labels which now own a share of the site and benefit from the increased exposure. With the top video site in their pocket, the labels then get to go after other sites that don't have Google's lawyers and potentially win favorable rulings.