In late 2006 a coalition of 23 of Japan's biggest TV broadcasters and copyright organizations, alarmed at the uncontrolled spread of their content on the Internet, were preparing to battle YouTube. Two years on, the video-sharing site has just signed a site-wide licensing agreement for its content and is telling Japanese content owners that user-uploads of copyrighted content aren't necessarily a threat.
Armed with a new tech toolkit to identify the owner of uploaded content, YouTube says it is committed to making money for its partners.
"We really want to focus on monetization," said David Eun, the company's vice president of content partnerships and one of the executives originally sent to Japan to allay industry fears. He was speaking at a Tokyo news event held to outline YouTube's business plan for the coming year.
"We really understand that YouTube can provide a fantastic opportunity for research, reach to send content and distribute it to new audiences but we also understand that revenues are very, very important," he said.
At the forefront of this push to make money from videos is Content ID, the system YouTube uses to scan uploaded video clips and look for matches amongst a database of reference video provided by copyright holders. It requires at least 20 seconds of video to make a match but will even catch clips of differing quality, such as those recorded off a TV screen with a camcorder.
"This technology is continuing to improve but we are already surprised at how well it is working and how accurate it is," said Eun.
Faced with a match, content providers have three options: block the content, simply track it to get insight into who is watching it and when, or run ads around it to make money. There are roughly 300 partners using Content ID and in about 90 percent of cases they choose the latter option, said Eun.
"For our most popular videos we have more user-uploaded videos being claimed by partners than the partners themselves have uploaded," he said. "For some partners this traffic increases by 50 times so it proves to be a fantastic way for content owners to increase their inventory and to increase their ability to target what kind of content is most interesting to users because it is the users themselves who are uploading the content."
The company is also experimenting with in-video ads, which appear 15 seconds into videos as an overlay at the bottom of the screen. Users have the ability to switch them off but, Eun said, experience is proving them to be eight to 10 times more effective than standard display ads when measured by click-through.
YouTube's position in Japan has strengthened in the last two years. Japan is now YouTube's largest market outside the U.S. and is a permanent feature in the top ten Web ranking.