YouTube plans to take on Apple’s iTunes with free music videos

“YouTube’s plan to provide ‘every’ music video free is a ‘nail in the coffin’ of the paid-for online content business model and potentially threatens the dominant position of Apple’s iTunes, according to City analysts,” Mark Sweney reports for The Guardian.

“The video filesharing website, where 100m clips are watched every day, is in talks with Warner Music and EMI to offer music video downloads for free. Revenue will be provided by advertising,” Sweney reports.

“‘Any service that YouTube puts in place is, almost beyond reasonable doubt, not going to be iPod compatible,’ said Mark Mulligan, vice-president at JupiterResearch. ‘If they develop portability – and that should definitely be on the table – then Apple could be in the unusual space of playing catch up,’ he added. ‘If YouTube can convert its massive online popularity then it could provide a significant reason for people to buy non-iPod devices, at the moment Apple is still the best bet for portable music watching. Either way it is a nail in the coffin of paid-for services as the dominant online model versus ad-funded alternatives,'” Sweney reports.

Full article here.
What percentage of iTunes video sales are music videos anyway? We’d venture a guess that TV shows make up the bulk of Apple’s paid-for video content business, not music videos. JupiterResearch’s Mulligan vastly overestimates the power of YouTube and their music video plans. People have invested in the iPod ecosystem, they’re not going to dump it all just because YouTube offers iPod-incompatible music videos with ads.

Related article:
NPD: Apple retains huge lead with 75.6% share of U.S. music player market – August 17, 2006


  1. Music videos are nothing more than advertisements for the artist, the song, and the record company. They should be free in the first place. It was a crime for iTunes to charge anything, period. No one should have to pay for advertising content.

  2. Don’t people agree that YouTube’s business model is flawed? Don’t they spend like a million dollars a day on bandwidth costs alone? I know advertising will help with revenue but I fail to see how YouTube could sustain the service for a long time.


  3. Music video downloads to youtube may be significant in terms of the sites survival (via ad revenue), but for Apple, it’s a small slice of the iTunes pie, and with movies, it will quickly become a minor portion of Apple’s iPod/iTunes revenue and profitability.

    YouTube boasts horrible video quality… I wonder if these music video’s will push higher quality, and one must wonder what the sound quality will be like?…

    With Zune coming out soon, perhaps a file encyption that does NOT include a Redmond solution is in th works. It should only be a matter of time until one can download the music video, and strip the audio from the file…

    Again, perhaps significant to YouTube, but not for Apple, nor will this dent Apple’s dominance – no matter how much the record labels hope it does…

  4. ABOUT TIME! This is great news… its silly to pay for music videos, just silly. Now YouTube… how about free TV programmes.


    So, it’s not silly to pay 99 cents for a song, but it is silly to pay $1.99 for a song and a video? Just checking.

  5. What in the world is all of this attempt and language of the DEATH of the iPod/iTunes.

    I mean fo’ reals…..”the iPod killer” “nail in the iTunes coffin”

    Sheesh…why so much of wringing of the hands, sitting on the edge to see the iPods/iTunes die???????

    I find it funny that there are no “Windows killer” articles or anyone desiring to kill off windows (though it will happen w/ intel macs and osx soon).

  6. YouTube is great for off-the-cuff stuff, but the quality of the video is at a level that free is the only price that’s right (not to mention that horrible sound sync issues). YouTube and iTunes are not direct competitors. They could give away music for free, too, but if it’s monoaural audio that sounds like a phonograph record made by Thomas Edison, it’s not exactly going to hurt iTunes.

  7. You are all forgetting a very important point:

    IF YOU GET THE MUSIC VIDEO FREE, YOU ALSO GET THE SONG FOR FREE. Nobody’s making you watch the screen while the video is playing.

    If the videos like everything else on YouTube (crappy), I don’t think I would bother anyway.

  8. If YouTube will be giving the videos away then why would they not be ipod compatible? They would purposely lose the iPod as a content platform just so they can use M$ DRM to protect files that…don’t cost anything…

    Does that make any sense at all?

  9. So a leftist rag, the Guardian tauts free downloads. Oh yeah, that will go down big with the content owners. It’s all too clear to the Marxist brain that free always works. It works great for land in Zimbabwe, doesn’t it? If you don’t have to eat, that is. Punish producers and kill production.

    Free works in the Linux world, because many of the contributors build reputations, which get them great jobs. Many get as good as they give. And companies like IBM love Linux, because IBM makes billions from managing corporate IT shops and also works to stop Microsoft’s domination.

    Yes, some upcoming performing artists may put stuff out for free, but once they get well known, they will search out ways to be paid – and it’s bye bye YouTube.

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