Yesterday, the old gray lady reported that online video powerhouse, YouTube, struck a deal with Warner Music Group(WMG). YouTube agreed to pay WMG a portion of the ad revenue generated off of copywrited material and CGM with it's artists' content.
Earlier this year, Warner Brothers Records made a similar deal creating a Paris Hilton branded channel, in which ad revenue from FOX's "Prison Break" was split between Warner and YouTube.
If YouTube continues to go down the path of commercializing the website through branded channels and shared ad revenue with large corporations, they will alienate the users that have made them so popular. If they are going to share ad revenue why not share it with the people that have grown the website into a property valued at over $1.2billion?
One of the problems is that YouTube was created without a revenue model in place. Sites like eefoof.com and Revver that were created with the idea of allowing users to get a piece of the action are in a much better position moving forward. While YouTube is dominating the space with about 100 million views per day, do not be surprised if YouTube's popular users switch over to an eefoof.com or a Revver as online video sensation LonelyGirl15 did.
