The week before Christmas, CNET News reported that according to a Universal executive, the company was pulling in "tens of millions of dollars" through YouTube. But just two days later, Warner Music began pulling all of its content off of YouTube, after the two companies failed to negotiate a revenue-sharing agreement. "We simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide," Warner stated.

So why is everything coming up roses for YouTube and Universal just as negotiations seem to be tanking between YouTube and Warner?

Turns out that the two-year licensing deals reached in 2006 between YouTube and the major music labels are beginning to expire, and YouTube, now owned by Google, is driving a harder bargain. Google wants to scale back pay-per-play royalties and focus instead on ad-supported revenue sharing, which is far less lucrative for the labels; most companies currently receive only about $25,000 per month from YouTube in ad revenue; that's just a drop in the bucket of the "tens of millions" Universal is touting.

Warner was the first of the majors to walk away from Google's offer, though Universal and EMI have agreements that will expire in the next few months. Will the other labels follow suit and be willing to walk away from the revenue available through YouTube?

It's hard to say, but Silicon Valley Insider suggests that they might be more willing than you'd think: turns out the major record labels are now in talks to start a joint venture that would be to music what Hulu is to video. According to the Insider, "The labels agree that their content's future on the Web is ad-supported, but the $25,000 checks have them convinced they could do a better job selling sponsorships, pushing concert tickets, and music sales on their own site."

This could be exactly what the music industry needs to do: take control of its content and integrate its operations on the web so that different aspects of the music industry--CD sales, concert tickets, fan paraphernalia, and online ad revenue--can cross-subsidize one another without a third-party intermediary. The success of Hulu has been pretty phenomenal, and if the record companies can come together and work out the kinks, they can enjoy similar success.

We are encouraged by this new effort by the record companies to focus on creative, positive and collaborative approaches to promote safe and legal ways for artists and their fans to use the Internet to share music. Consumers' enthusiastic response to the growing number of Web sites and other online sources that provide legal access to original, high-quality video and music shows that creators, technologists and consumers can all thrive in the Internet ecosystem.

Collaborative approaches, such as these, give consumers the opportunity to access music in a safe and legal way while providing fair compensation for the artists who create it. Experience has shown that most consumers will respond positively and switch to legal alternatives for future content downloads when they are informed that their downloading activities are inappropriate and that other easy-to-use, legal sources are widely available.

Before video became the big thing in online content, there was music. And music was pirated far and wide by users of the original Napster and its successors. Defenders of piracy often claimed (and still claim) that this activity allowed new and independent artists to get exposure, skipping traditional distribution.

And while some artists may have been lucky enough to get exposure this way, it doesn't seem to have lead to an explosion in the profitability of the "Long Tail" (our previous thoughts on the Long Tail are here) or the number of indie artists jumping into the "Short Head." Indie artists need something more.

Today we're witnessing the next generation of attempts at marketing independent artists - making their music accessible, flexible and profitable. One of the more valiant efforts is indie911.

It starts out pretty straightforward: artists can register at the site, create a custom page for themselves, and start uploading their music and video to stream through the site's player. In a day or two, if the artist desires, the content is approved for sale, starting at the industry-standard rate of 99 cents for music tracks, $1.99 for video.

But one way indie911 sets itself apart is with the "hoooka" player, which is a high-functioning widget. Each artist or fan can create his own hoooka, complete with customizable skins and colors, which will showcase the music (accompanied by photo slideshows, if they like) and video they've identified as their favorites, as well as other media they've been checking out lately.

The widget operates not only at the indie911 site but anywhere: on your website, your blog, your social networks (like MySpace), or anywhere embedding is allowed. Interestingly, fans looking at that hoooka on those different websites can all chat with each other in real time and post comments about what they're watching and hearing.

And while artists can put up their content for free--and indie911 will help promote that content online--the site offers many avenues for monetizing content. The most straightforward is that if the artist has chosen to put his content up for sale, then when fans see or hear it, they can buy the non-restricted digital file in two clicks--every hoooka is a "digital store-front".

When other people view the hoooka you've set up, and they decide to buy content through it, you get a cut: 70% goes to the artist, 10% goes to the hoooka creator, and 20% goes to indie911. So if the music is purchased through the artist's own hoooka, the artist gets a full 80%.

For the artist, these are among the best rates in the business either way, but now fans have an extra incentive to try out independent works, find the good stuff and, in effect, do some of the retail groundwork to promote the artist.

indie911's current members are doing just that, although finding the artists that appeal to them is somewhat hampered by the lack of a solid search or auto-recommendation function.  While you can browse manually by genre, your best bet is to look for artists who cite influence by mainstream artists you already like.

In addition to retail through the hoooka, indie911 offers free opt-in digital distribution to outlets like iTunes, amazon.com, Rhapsody and yes, the new aboveboard Napster. And artists get 95% of all income indie911 receives from their songs that way. Also available for free through indie911 are opportunities for licensing songs for use in other media like movies, TV and video games, which can bring in licensing fees and royalties.

Now, artists can only post three tracks for sale under the free package, so if they want to put more songs out there, they pay a fairly low rate ($29.99/year, which can be recouped in just 38 direct downloads) to sell an unlimited number of songs.

And all of this is non-exclusive: artists can post their work at indie911 and retain all rights to their work, and go on selling their work anywhere else they please. It's hard to see why any indie artist wouldn't want to opt in, at very least to the free package: it's all upside.

If an artist really wants to take their career to the next level, indie911 offers a set of more expensive promotional options like radio distribution and marketing. So indie911 really does offer a full range of means for independent artists to promote themselves and make a bit of money along the way.

Whether or not any given indie artist will make it, indie911 won't fail for lack of trying; and according to the site, they've succeeded so far at attracting more than 140,000 music and video titles from 30,000-plus artists and labels, and they've given everyone else a reason to participate. It would be nice to see that Long Tail come to something, so check it out and spread the word.

Last week, a number of organizations who often find themselves on opposites sides of some policy debates - including Public Knowledge, Free Press, Google, and some members of Arts+Labs - announced their participation in a Call to Action, a broad policy framework for a national broadband strategy. The statement doesn't get too involved in the nitty gritty details of implementing the goals, but there is definitely some indication that people are coming together on some of the underlying realities and setting aside some former dogmas to create a smart, forward-looking, consensus-driven approach.

Among the items in the "Goals" section of the document are these two important principles...

• Access to the Internet should, to the maximum feasible extent, be open to all users, service providers, content providers, and application providers.
• Network operators must have the right to manage their networks responsibly, pursuant to clear and workable guidelines and standards.

Our friends in the Call to Action coalition deserve our praise and appreciation for this important first step toward resolving disputes and moving forward.

We look forward to working together with them to create a better Internet for all of us - an Internet that is safe, legal and everywhere.

Yesterday I had a piece published online at Real Clear Politics about, well, online publishing. More broadly, the piece was about the future of the newspaper industry in the age of digital delivery. Pretty good timing actually, as it coincides with two pretty big shakeups yesterday in the journalism world: the Tribune Company's bankruptcy announcement and the Pulitzer Prize Board's decision to allow entrants for prizes in journalism from online-only media outlets. From my RCP article...

The future of online publishing is clearly in trouble, but the experience of the entertainment industry makes it seem likely that news outlets will be able to find ways to profitably deliver their content the way consumers want it (usually for free). Consider things like Hulu, imeem, and (increasingly) YouTube, all examples that rely on what Rubin calls the Three Cs: copyright, competition, and collaboration. I add a fourth C to that idea: content.

With collaborative solutions between content providers and content platforms, quality improves, and the need for users to traffic in infringing content is greatly diminished.

High quality content is critical in the realm of journalism, and as the Pulitzer Board's decision shows, much of that quality content is now online. Once the traditional news industry leaders embrace the Four Cs and look beyond site-based revenue streams and the traditional business models, the quality and availability of online content will be even better. As the Trib undergoes its reorganization -- and other papers look to improve their financial operations -- these collaborative solutions are something we need to be thinking about.

Fancast wants to be your online one-stop shop for everything from the silver screen to the small screen. It has tens of thousands of free videos, but there's even more under the surface, holding it together and making it even more useful.

The first thing Fancast invites you to do as you enter the site is to watch some of their many free videos, including (as you can see) full TV episodes, movies and trailers. This alone is a pretty impressive library: full episodes of 460 programs from 52 TV networks, and just as many full-length movies.

If a film or show of interest is going to be on TV sometime soon, or is available on-demand through your cable service, Fancast keeps up-to-date TV listings and will tell you where and when you can catch it.

For movies and TV shows that aren't available for free - or to download content rather than rely on streaming video - there's the Fancast Store. There you can download-to-rent or own a variety of videos, with discounts for purchasing whole seasons of shows (including "season passes" for currently running seasons).

And if you come across a movie or show that you'd like to rent but prefer not to download, Fancast will direct you to Netflix and Blockbuster so you can put it in your mail-rental queue. If you'd rather buy the DVD or Blu-ray outright, the site offers the Amazon link to the product.

For movies that are currently in the theaters, Fancast will direct you to Fandango for local showtimes and tickets.

Think about all that: this one site offers you a flexible array of options to access safe, legal content, whether you want to catch it as it airs, get it delivered on-demand, download it to your computer, or receive it in the mail. You can rent or own. And for lots of the video you're looking for, you can watch it streaming right at the site, for free.

So no matter what you're looking for, Fancast is a portal to help you access it. But that's not apparent when you first visit the site. When you first arrive at the front page, there's scant evidence that Fancast has a vast, searchable, fairly easy-to-navigate database of information about the content, cast, crew, and even music of TV shows and movies. But Fancast does.

And if you register a profile at Fancast, then when you browse through shows, movies, cast and crew, you can start rating them and identifying your favorites. Using that information about your preferences--the more you provide, the better--the site makes recommendations for what you should be watching now on live TV, on-demand (including the free videos on Fancast), and in theaters. If you need a reminder when something is going to be on TV, you can just click the "Notify Me" button on its page and you'll get an email ahead of time.

The only content that isn't integrated with the rest of the site is Fancast's set of several blogs about the news and stars of TV and cinema; they're more of a front-page bonus to round out a site about video entertainment.

What Fancast delivers is a ton of content, tied together with an underlying database that helps you find and access the content you want, safely, legally, wherever it may be . . . and often free.

There's money to be made in getting people what they want: Fancast has managed to combine several different business models in one site, with the occasional ad, paid downloads, and tie-ins with other services all contributing. If that's what it takes to support a one-stop shop for viewers to browse, search for and access what they like, we're all for it.

Ars Technica names their 2008 Ovatio Award winners. Taking the award for Best piracy-reduction program was...<envelope, drum roll, pregnant pause>...Hulu!

"Piracy reduction programs" generally conjure up images of 1) naval ships and eyepatches or 2) RIAA-style "sue-'em-all-and-damn-the-PR!" courtroom battles. But when it comes to digital content, few people truly want to fly the Jolly Roger (The Pirate Bay admins excepted, of course); they want access to content on-demand, in good quality, and at a fair price. Piracy is simply the means.

Meeting the demands of these digital whippersnappers sounds more like an idea from the bottom of a bong than anything resembling a business plan, but 2008 was the year in which companies showed just how well the model could work. [...]

Proving the naysayers wrong, signing up new high-profile content from Viacom and indie outlets (in addition to corporate backers Fox and NBC), and pulling in higher CPMs than anything on YouTube must be quite satisfying for the Hulu team. Offering all that content on demand, for free, and without apparent backend problems turned out to be satisfying for consumers as well, who are flocking to the service by the millions. And all this without even going international yet.

For those willing to drop a bit of dosh, Netflix offers its own on-demand streaming service for subscribers. Everyone who pays $6.99 a month and up gets unlimited on-demand access to more than 10,000 movies and TV shows. The company's expansion onto the Mac and into Xbox 360s--in high-def, no less--makes streaming a compelling adjunct to the base DVD-by-mail model.

We've been using both services around the Orbiting HQ extensively this year, and everyone on staff agrees: this is what a powerful antipiracy program looks like.

The New York Times recently noted the consumer shift towards online consumption of content. "It's ridiculous", said one person, "to pay for this service I rarely use when I can get the same stuff online and save a lot of money." But then the Times made an accusation that doesn't seem to match up with the reality we're seeing...

Does an economy in tatters slow down or speed up the shift to watching TV shows and movies on the Web and mobile devices? The entertainment industry doesn't like the answer that is rapidly becoming clear: A global economic crisis almost certainly means a sharp acceleration in the move to new ways of consuming content, setting the stage for a new clash between consumers and studios. [...]

Moreover, consumers now have cheaper ways to see movies and TV shows. Hulu. Vudu. YouTube. Netflix. Amazon Video on Demand. iTunes. Crackle. FunLittleMovies.com. Movielink. CinemaNow. The list goes on. As a result, movie and television studios seem more intent than ever on protecting their established businesses from cannibalization by new media, which are growing rapidly but still generating very little revenue comparatively.

It's difficult to understand why the New York Times would claim movie and television studios are "more intent than ever on protecting their established businesses from cannibalization by new media" right after pointing out 10 places (and "the list goes on") where movie and television studios are busy rolling out their content online.

These "cheaper ways to see movies and TV shows" that the Times says consumers now have, exist precisely because movie and television studios are working so hard to eliminate a "clash between consumers and studios." Perhaps people have gotten so used to thinking in terms of a conflict between creative rights and digital distribution that it's hard to see what is happening right now, but the "clash" is being eliminated by great new ideas, technology and progressive collaborations.

That's something the New York Times ought to cover.