Gambling on YouTube

Here we go again. YouTube’s Video Poker

Chad Hurley effects a calm, almost detached demeanor, even as the Web site he runs, YouTube.com, has provoked a frenzy of consternation among executives of record labels, TV networks and movie studios. For millions of Internet users, the site that opened to the public less than a year ago provides a daily fix of odd and interesting video clips, from White House speeches to frat house pranks.

YouTube has also become a vast repository of video taken without permission from television shows and movies, not to mention home movies constructed — with nary a cent paid in royalties — from commercial music and imagery.

Mr. Hurley was surrounded by curious media executives at Allen & Company’s annual Sun Valley mogulfest in July. They wondered: friend or foe? Is he earnestly working to make YouTube and its exuberant users conform to the existing standards of copyright law and contractual obligations? Or is he cynically flouting the law to enable YouTube to grow rapidly, calculating that he will be able to cut a more advantageous deal later, or perhaps sell the company to someone else who will be able to sort through the mess of liabilities?

[…] Doug Morris, the chief executive of the Universal Music Group, said at an investor conference recently that YouTube and MySpace, the social networking site, “are copyright infringers and owe us tens of millions of dollars.”

And Mark Cuban, who founded Broadcast.com, an early Internet video site that was bought by Yahoo, argued on his blog that YouTube did not have a viable business other than piracy.

“It is absolutely reminiscent of Napster,” Mr. Cuban said in an interview. “It’s nice that they say ‘it’s different this time,’ but it’s not.”