Chapter 4: Revenue Recognition

http://www.cbc.ca/technology/story/2007/06/13/tech-youtube.html

Summary

Youtube will be partnering with Time Warner Inc. And The Walt Disney Co. To being testing a video recognition program. This program will begin sometime next month and its purpose is to recognize any copyright content in videos to eliminate the amount of pirating. Uploaders will have the option of either removing its video or to purchase a licence. Although the videos on Youtube may be homemade, CBS and NBC are huge attracters of viewers. The motive behind this action may be because of Viacom Inc, who sued Youtube and Google for allowing users to upload videos with copyright content. In response to this, Youtube has begun to use audio recognition in clips, therefore disabling viewers from the audio to a specific clip. With the help of Google Inc, Youtube now has the ability to use a fingerprinting like mechanism to detect whether a video has copyright content or not.

Connections

In this article, I was able to make the connection to revenue recognition. Youtube account holders, if they are able to generate enough subscribers can be made into partners with Youtube. Each time they post a video up and it receives a certain number of views, the account holder is able to earn a small amount of money. By uploading any video, they have the chance of earning profit. Unlike an actual company, who earns their money from customers, uploaders can simply post a video. In addition, there is little to no expenses. Indeed there must be a fee to become an account holder but in the long run, the revenue generated will accumulate and exceed the expense(s) (Net income). In terms of earning a profit through the process of posting videos, the cash to cash cycle need not apply. There is no acquisition of inventory, selling activity, delivery, or warranty. This makes the idea of posting videos up for profit an intriguing idea.

Reflections

Being a Youtube user myself, I am rather on the fence with this decision. Yes it is the proper thing to do but most of the time, Youtube is the place to go when I have missed a show. Depending on the country in which you live in, certain websites such as muchmusic.com may not allow users from a different country to view their online episodes. Since the channel of which the show is broadcasted on does not allow one to view the show, individuals have to resort to using sites where others post clips up. In addition, by using the audio recognition, millions of songs have been removed, leaving viewers to choose between either illegally downloading it or purchasing it through iTunes.

Betty Chan
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