The popularity of sites such as Youtube and MySpace has increased drastically over the last year. These sites allow users to make ‘video blogs,’ in which they can post media clips ranging from home videos to music videos to the most recent episode of popular television shows. In the arena of video-sharing, two of the most controversial debates center around piracy and censorship.
Last year, Google purchased Youtube for $1.65 billion, a price so high as a result of the mass volumes of copyrighted videos posted on the website. If it hadn’t been for those copyrighted materials such as episodes of 24 and The Simpsons that were floating on Youtube’s cyber-turf, the company’s value would have been much lower. Twentieth Century Fox has taken legal action and are requesting that these videos be removed from the site. Under US Federal regulations, copyrighted material is prohibited from being reproduced and distributed, thus creating a barrier to entry and limiting competition. However, in the UK, Youtube is not required to monitor its users’ posting. Therefore, barriers to entry are not as high abroad.
However, European users face a different kind of barrier to entry. In Europe, television services must be licensed, a regulation that helps to monitor advertising, hate speech and censorship for children. In general, television licensure is a barrier to entry and creates a monopolistic market. Until now, online video-sharing has not been affected by the regulations that apply to television licensure; however, the EU is pushing to extend broadcasting regulations to the internet. If this directive is adopted, it will create two barriers to entry – firstly, sites administering video-sharing will decline and secondly, users of these sites will be driven away. If these companies are forced to operate outside of the EU, the Member States will suffer high GDP losses.
Blog Post by Jake Carter-Lovejoy, Jessica Halper, Michael Ledwith, and Drew Muir
Articles:
http://business.timesonline.co.uk/article/0,,9071-2569108,00.html
http://www.timesonline.co.uk/article/0,,13509-2407359,00.html
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4 comments:
While the implementation of European censorship on on-line videos may certainly reduce the number of copyrighted materials allowed on websites, we disagree with the fact that this will create barriers to entry for the online video-sharing market as well as the fact that EU member states will suffer high GDP losses. The sale of Youtube was a once-in-a-lifetime phenomenon which cannot be transitively applied to other video sharing sites throughout the world. Yahoo, Myspace, Xanga, etc. all offer some form of free video broadcasting to its members. Sites are continually popping up where video footage is an accessible option. Part of the reason that Youtube sold for so much was due to its widespread popularity/ability to advertise. This same feat can not be said about many of the other online video sharing services. For that reason alone, a significant loss in GDP can't be attributed to a lack of video sharing websites from EU member states. We feel that the barriers to entry in this low technological cost, virtually free membership video sharing service are not as clear-cut and dramatic as described. Anyone with basic programming knowledge and a computer can create such a website and the profits gained from this kind of website are definitely not substantial enough, regardless of whether or not they host copyrighted material, to have a significant impact on GDP.
posted on behalf of Pamela Tsang, Thomas Li, and Chi Liu
To the other group that posted on this blog...wrong blog!
I am curious as to which market exactly you are talking about when you speak of a barrier to entry. If you are talking about websites which offer video blogs... then theoretically under the new law, should it pass, wouldn't the market no longer exist? The entire community is solely composed of individuals like you and I. These websites are prosperous mainly due to the fact that videos can be viewed for free. The majority would thus no longer participate if they are faced with a licensee fee in order to upload a video that is not theirs. And should a person decide to pay the fee and continue posting videos taken from TV shows, movies, and etc, then how can this be considered a monopolistic power? If a person wants to enter (posting videos on a website), then they are free to do so. All they have to do is pay the fee for the uploaded video. Sites like YouTube does have a large community, but that was the consumers' decisions. Nothing is preventing a person from posting their video blogs on another website or even creating their own.
Post by Kristy Choi, Minsoo Park, Seon Hwang
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