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Apple Gets Something To Worry About

Sunday, August 20th, 2006 at 22:56 by Simon Kimber

Video sharing website YouTube, best known as a place for people to post videos of dumb animals being stupid (take the Crawley chavs powering a childrens’ roundabout with a moped for example), is set to take on the mighty Apple iTunes in the music download business.

YouTube has been nothing short of a phenomenon, growing in a little over a year to one of, if not the, most popular websites on the internet. With the site serving an unbelievable one hundred million videos a day, to bored children and office workers across the globe, you can be certain that many a corporate executive lies awake in bed, in fear of finding the mighty “Tube” stepping on their precious turf in the morning.

This morning it was Apple’s “Keep off the grass” sign that had been blatantly ignored in the night and the footprints on their front lawn are serious cause for concern.  YouTube co-founder Steve Chen is in talks with major record labels and plans to have “every music video ever created” on YouTube, downloadable, for free, within the next 18 months.

Apple make a big chunk of revenue from selling music videos from their iTunes store, but by financing the videos via revenue from the advertising on its website YouTube is doing the online equivalent of standing outside a Virgin Megastore and handing out all the latest CD’s for free as long as you agree to take a couple of leaflets too.

If the business model works for videos it will be no surprise to see YouTube using those new-found industry contacts to turn their attention to audio as well, and if that happens Apple’s garden is going to be a right old mess.

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One Comment on “Apple Gets Something To Worry About”

  1. MC Says:

    Don’t they make their revenue from selling ipods, while only charging a nominal margin on the content sold at the itunes music/video store? surely more video content out their would be *good* for apple…

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