YouTube Guys at D: All Things Digital

I'm here at the last day of D: All Things Digital. The Wall Street Journal's Walt Mossberg is interviewing Steve Chen and Chad Hurley, the founders of YouTube. Which--and it's startling to remember this--didn't even exist two years ago.

They're talking about yesterday's announcement of an Apple TV update that will allow direct streaming from YouTube, and saying that Apple approached them to make it happen.

Now Mossberg is asking what percentage of the stuff on YouTube is the classically spontaneous, user-generated type of clip that made the service famous. Hurley says that such clips still make up most of what it hosts, but there's more and more professional or semi-pro content.

Mossberg mentions an announcement today about a deal between YouTube and EMI for music video on the site as well as payments to EMI when user-generated videos use music it owns on their soundtracks. Hurley, sounding a bit defensive, says that people think YouTube isn't doing anything to control use of copyrighted material on the service, and is enumerating efforts it's making in that area.

"Whoa, whoa, whoa, you do 'a good job of educating users about copyright law?'" says an incredulous Mossberg. Chen maintains that yes, they're "industry leaders," saying that there's information about copyright embedded in the service's upload tools. Mossberg remains doubtful, using the phrase "cover your ass" to describe its efforts. A persistent Hurley talks about audio and video fingerprinting in the works that will control unauthorized use of copyrighted content, along with deals the service is striking with entertainment companies.

Mossberg asks, so why are you being sued for a billion dollars by Viacom? And would YouTube have a viable business if copyrighted content went away and the site had nothing but Mentos-and-Diet-Coke videos?

Yes, says Hurley, it would. There are a lot of filmmakers out there and we're very early in this whole Internet video thing.

"Every video that's uploaded onto YouTube is copyrighted by somebody," says Chen. The trick is figuring out who. Mossberg seems to agree, talking about how nightmarishly complicated it is to break down who owns what rights on an album that's on YouTube.

Mossberg says that there are honest folk who don't realize there are legal issues with using copyrighted music as a soundtrack for a home movie they put on YouTube. Chen says that they hear from people who think that if they pay for a CD they can use music how they see fit, and that YouTube is trying to educate them that this isn't so.

Mossberg is asking about the tendency of the tech industry to create "hype bubbles" around hot products and services. Is YouTube overhyped?

Hurley points out that the service has had lots of buzz for a year now, and that user-generated online video is big in general: "We kind of represent that movement." Chen says people are uploading video they created years ago--YouTube "is really a service that's been needed for some time."

Mossberg asks if YouTube will see another surge "when and if" Americans get fast upload speeds at home. "Of course," says Hurley.

Walt touches on things other D speakers have said. CBS's Les Moonves explained that network's strategy as involving syndicating its content as widely as possible. What do Steve and Chad think about the possibility of Web video being pervasive and less centered around YouTube? Would that be a viable model?

Hurley says CBS's strategy is smart, and akin to YouTube's approach of allowing users to embed its clips anywhere and everywhere. There will be room for lots of players and YouTube will try to continue to be innovative.

Mossberg says that George Lucas, who spoke at D yesterday, divided entertainment into circus (unplanned stuff) and art (traditional storytelling). YouTube would presumably be the former. Is that okay? Yes, say Hurley and Chen. They like the fact that the community runs YouTube and its members are constantly inspiring each other.

Walt says that Lucas doesn't believe it's possible for moviemakers to make money putting their creations online yet. Is that OK? "It's in the very early days for someone to support themselves entirely from Internet distribution, but that's why you have a spectrum of options," says Hurley. He says that advertising is what will give YouTube a viable model for content creators, especially with Google, its new owner, involved.

Mossberg talks about the D Web site and how the ads before its videos annoy some people so much they click away without watching the content. Would that happen if YouTube put ads before videos? Or would it just do Google-style text ads? Chen says they're testing various pre-roll ad formats, and definitely wouldn't do 30-second ads. But 5 or 10-second ads that are highly targeted to the content may work. The video ads on the YouTube home page are working well; they don't auto-play, and it's clear they're advertising. As long as ads are entertaining, people will watch them.

Walt notes that when you search on Google, most of the text ads you see are relevant. Does the technology even exist to do something similar with pre-roll ads before YouTube videos? Chen says it can be done, but the company is still going to be careful--video ads "are overall something that's not pleasant to watch."

Hurley says that people who upload video would have to opt-in to video ads, and they'd get a cut of the profits, a la Google's AdSense program.

Mossberg asks what YouTube will do if people don't want to opt-in? Hurley says YouTube is working on figuring out how to make it work. And it'll tweak things if folks don't like its approach. "We've listened to feedback and adjusted along the way...by listening, we've been able to build a better product."

Walt talks about the idea of letting users put "video vaults" of all their home videos on YouTube, and maybe not even sharing them with the world at large. Would that fit into the company's mission? Yes, says, Chen--its mandate is to help people with video, period.

Audience questions:

Newsweek's Steve Levy asks about ads on YouTube that aren't clearly ads. Problem? Hurley seems unfazed, saying that if they're entertaining and users like them, that's OK. Mossberg is dubious.

Another question: A few years from now, how much YouTube content will be professional? And with a legit CBS content channel on YouTube now popular and Tony Blair using YouTube to put content up, what does that mean for the future? Hurley says it may all be blurry, "and that's a great thing." Blair using YouTube "is a great thing for us." YouTube is giving companies like CBS a new way to promote content, and it actually helps ratings.

Gary Shapiro, president of the Consumer Electronics Association, says that the electronics industry has worked hard for years to create devices that respect copyright. But copyright users are written by content owners who are narrowing the definition of fair use. Are the YouTube guys trying to get involved in evolving copyright law to reflect the real world? Hurley says that yes, they are. They're working with copyright owners to do deals.

Mossberg tries to clarify Shapiro's question: There are bigger issues out there beyond deals. Now that YouTube is so powerful, will it "step up and lead a political crusade?"

"We have a chance to affect the issues and make a difference," says Hurley. Chen says the company's "pushed the horizon" by letting users legitimately use copyrighted music and auto-detecting copyrighted material and letting owners claim it.

Wouldn't it be easier, asks Mossberg, if laws changed to give people rights such as, say, being able to use thirty seconds of a song they've bought? Copyright law doesn't spell out users' rights. Clarifying that would only help, say the YouTube guys.

Question: Has IPTV missed the boat? Will Web video take over? Chen says that IPTV and YouTube are technologically similar, but YouTube isn't trying to replace TV. The quality isn't as good, and you don't gather around the TV to enjoy it. (Mossberg points out that with the new Apple TV deal, you might.)

Last question by the author of Cult of the Amateur, a book that criticizes user-generated content and YouTube. Any concrete examples of the YouTube community rooting out inauthentic video, such as Lonelygirl15? And might YouTube be divvied into an anonymous section and one where you had to prove who you are?

Hurley says that the community didn't care whether Lonelygirl15 was who she seemed to be. And YouTube will look into using technology to verify the authenticity of video. But it doesn't want to put too many barriers into place.

The session ends. Next is a conversation with the chairman of Viacom, which I won't liveblog--but hey, it's introduced with a video introduction by Stephen Colbert, who talks about Steve Jobs, Steve Ballmer, Steve Case, and...Steve Gates. And his personal dream of downloading chocolate cake over broadband. And how much he'd work to promote the iPhone on his show if, well, Steve Jobs chose to give him one.

Funny stuff...and hey, I think I can embed it:

(UPDATE: The video seems to be down. I'll leave the embed up in case it comes back...)

(Second update: Walt Mossberg just said that Viacom's lawyers called and told D to take the Colbert video down...)

(Third update: Kara Swisher says that the whole thing was a miscommunication, and that the video is back up again...)

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