YouTube Nails Deals with EMI, Apple

By Richard Menta 6/1/07

With this deal, all four of the world's major music companies are now official YouTube partners," said YouTube founder Chad Hurley. Chad announced yesterday that the site came to terms with EMI to allow user-posted music videos to stay on the site.

Details of the agreement were not disclosed, but this is a deal that will generate revenue for the last major label to come to terms with the video site. What is known is that YouTube will increase they ways it draws revenue from advertising to create the revenue stream.

At the D5 Conference Walter Mossberg interviewed the two heads of the site and they told him that video ads are one option that they are looking into now and expect to introduce. Of course, they are being cautious with the proposition of tacking on a video ad to every posted video.


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" We don't think that forcing someone to watch an ad is the best way." Steve Chen told Mossberg. "The length of the ads matters. I think the optimal is somewhere between 5 and 10 seconds... and making it as relevant as possible." Those who post content will have the right to decide if an ad should be included or not. "People have to opt in," added Chen. "we're running tests on the site. Within the next few months, we'll be rolling out more video-centric advertising on the site. We hope we're adding value and don't interrupt the user experience."

The adoption of a video ad scheme that is not too intrusive is key to YouTube's success here. If the updated version of Apple TV begins to take off with new buyers of HD TVs then video ads will be critical as YouTube also unveiled a deal with Apple.

Both companies announced yesterday an updated Apple TV console. The new console bumps capacity four-fold from 40GB to 160GB. It also will stream content from YouTube, expanding the content for Apple TV from just the movies available for sale on iTunes to the hundreds of thousands of free clips available on the site. Most important for YouTube the move is presently the most logical way presently for the company to bring its content to televisions in the home. "YouTube is a worldwide sensation, and Apple TV is bringing it directly from the internet onto the widescreen TV in your living room," said Steve Jobs.

Initially, only a few thousand popular YouTube videos will be available as Apple converts them to the MPEG-4 format that Apple-TV and the iPod use. But soon YouTube will do the conversion automatically for Apple TV users. The larger AppleTV model will be available in stores on Thursday for $399, a hundred dollars more than the 40GB model.

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