YouTube has made a few announcements in the last little while about new advertising concepts and some new content deals like NBC show previews.  Today’s announcement that they have reached an agreement with Warner Music to carry all of Warner’s music videos in an ad revenue-sharing deal is another positive piece of news.

I would like to draw your attention specifically to the last two paragraphs of the press release which are a little bit obscured by the rest of the announcement:

By the end of the year, professional content creators, including record
labels, TV networks and movie studios, will have the opportunity to
authorize the use of their content within the YouTube community by
taking advantage of YouTube’s new content identification and royalty
reporting system.

YouTube has been actively working on the operational details and
building the infrastructure for this innovative new framework which
includes royalty tracking and reporting, and a sophisticated content
identification system. This new architecture will offer media companies
the following:

• Sophisticated copyright identification tools to help identify their content on the site;
  
• Automated audio identification technology to locate their works within user videos on the site;
  
• The opportunity to authorize and monetize the use of their works within the user-generated content on the site;
  
• Reporting and tracking systems for royalties, etc.

This, by far, is the most significant part of their announcement and it is tacked on at the bottom of a 2 page release.  By the sound of it, YouTube has developed a way for content owners to monetize the use of their copyrighted content in amateur videos.  That means that a record label will be entitled to its share of advertising revenue generated by ads on YouTube attributed to creations such as those cheesy karaoke home videos that kids have created in their bedrooms.  Considering the viral nature of some of those amateur productions, this could turn into a decent little high-margin revenue stream for copyrighted content owners. 

What I like most about this concept is that it shows a media property enabling a record label to be  smarter about monetizing its content.  Rather than suing people for using its content in amateur online videos, the label will likely encourage people to use it and post their creations to YouTube where content becomes revenue. 

What would be really revolutionary is if YouTube and Warner created a little "content developer kit™ (CDK™)" library of video and music widgets for eager amateur video producers to use in their creations.  Why not go one step further and cut the producer in on the revenue too?  Give them an incentive to create something that drives traffic and ad revenues.  Now that’s making smart use of one’s digital media assets.