Mark Cuban: YouTube is Doomed

PHOTO: Tim Heitman/NBAE/Getty Images

Billionaire Mark Cuban is known for his sideline antics as the owner of the Dallas Mavericks basketball team, but he built his empire on technology from his pioneering online broadcasting service, Broadcast.com, to his high-definition television network, HDNet. In the second part of our interview, Cuban discusses a few of his favorite high-tech topics: file sharing, digital distribution, and YouTube.

IEEE Spectrum: When the music and motion picture industries sued Grokster, the file-sharing service, you backed Grokster. Why? How does that fit in with your vision of digital distribution?

Cuban: Because Grokster v. MGM was about who can control--who could shut down--technological advances. It went back to the Betamax ruling, where all the studios tried to shut down the VCR. The judges at the time said that if you have substantially noninfringing applications, you can't shut it down. Well, they were trying to redo the whole thing, and to me, that was scary--particularly in a digital age, where, as it turned out, they said that if an organization induces copyright infringement and rights violations, then they are liable. That hurt Grokster.

But I really didn't care about Grokster. I cared more about freedom of intellect, if you will. As it stands right now, we didn't win. We didn't lose completely, but we certainly didn't get the best of the ruling. But as it stands, if an 18-year-old kid in his computer science class writes about a piece of software that a big technology company feels threatened by and thinks induces people to infringe, or thinks it violates this--then they can sue them. And they can sue them into oblivion, and that kid has got no protection.

IEEE Spectrum: What about YouTube?

Cuban: That's a completely different animal. If I originate something on my own, and it's threatening to a technology company, then they can come after me. For example, say somebody came up with a different way of dealing with garage door openers, and they got sued over it under this Digital Millennium Copyright law. That's ridiculous. That's why I supported Grokster. YouTube, on the other hand, is a whole different beast. Under the Digital Millennium Copyright Act, there is a thing--the safe harbor [which protects service providers from copyright infringement claims made against them because of their customers' actions]. It seems to me that so much of YouTube's success and model is based on the safe harbor--which seems really slippery.

IEEE Spectrum: The safe harbor is for ISPs.

Cuban: Exactly. So that if David loads up porn, or copies of a DVD, then the ISP can't get sued because it has no control. What it didn't say was--David loads it all up, and you can put it on your own Web site, and financially benefit from it. And what I wrote in my blog today was, I took a play off of ”Seinfeld”: the master of your domain. Remember the ”Seinfeld” episode? I said what the safe harbor laws will come down to is provisions: Are you master of your own domain? Meaning, if you buy YouTube.com, do you control what's on there, or not? Of course you do. If you are a service provider and it's going on your Web site domain, you don't control someone else's domain, so are you the master of your own domain? Or are you not? Of course you are. So if you [consider] the safe harbor, I don't think YouTube is a service provider. Two, it says that if you are aware of infringement, you have got to do something about it--and how can they not be aware of this? Three, it says that if you benefit financially from it, then you are liable. Well, there are banner ads everywhere, there's your infringing equipment.

IEEE Spectrum: Where do you see YouTube 10 years from now?

Cuban: They are gone. They will be rolled right into Google Video, and Google Video will have ways to evaluate the video before it's posted, and that will be fine. And maybe YouTube URLs will redirect to Google Video. If anything, if I'm wrong, and the safe harbor laws apply, then I'll create a business leveraging that. Because if safe harbor laws might apply, and YouTube chooses to limit their file sizes to 100 megabits--I will limit file sizes to 100 terabits! Let's see what kind of good stuff we can have.

IEEE Spectrum: Do you use file-sharing sites?

Cuban: It's been more of a hassle. BitTorrent takes forever. I'm not patient enough to let it download overnight. You still don't even know if you will get it overnight; it might take two or three days. So it's more hassle than it's worth. I don't go to LimeWire to find music. I don't go to BitTorrent, other than to check for our movies.

IEEE Spectrum: To see if they have been pirated?

Cuban: Yes.

IEEE Spectrum: What do you do if they have?

Cuban: Nothing. Cause those kids weren't gonna spend the money anyways.

IEEE Spectrum: What are your thoughts about Microsoft and the change of ranks there, and how Bill Gates is kind of getting out of the picture?

Cuban: Microsoft is so big. I don't think there's anything dramatic that's happened. I'm sure Steve Ballmer knows what Bill Gates is good at. If he has a question, he'll ask him. I don't think they feel like they're missing anything. I think Steve has got ungodly amounts of energy, and he's a supersmart guy, but he's also got to manage a business that is in a lot of businesses. It's not like Google [even though] people compare it to Google. Google does one thing right, and they're marginal at everything else. [Google is] more like Microsoft back in the mid-'80s, when it was PC-DOS and Lotus 1-2-3 and dBase II. WordPerfect, MultiMate, and WordStar were dominant. These guys only had one product, and the question was, Could Microsoft move to other things? Now Microsoft is in so many businesses they're trying to win at, that it's a completely different beast. Hell, I feel sorry for those guys cause they have to do everything right. Whereas Google is just an advertising yield company. They generate or buy as much traffic as they can. They are the difference [between] what other people's expectations of earnings are--based on advertising--versus what they feel their algorithms and technology can do to earn more. AOL thinks they can earn x percent? Well, nah nah nah, they don't know it but we can earn x plus x . And that's how Google keeps on going. They are phenomenal at what they do. In that one area, they are the best by far. But that's all they do. They haven't even really pretended to go out into any other areas. The YouTube deal is just about the same thing, only video.

IEEE Spectrum: How do you advise others just starting out in the business?

Cuban: Just have fun and be good at what you do. Most people don't make the effort to be the best at it, you know? They just try to make sure everybody thinks they're the best. But most people don't do the work. That's what I tell people: if you're going to do something, be the best at it. Take chances and learn from your mistakes. Put yourself out there to let people criticize you, and then learn from it. That is a never-ending process. You gotta keep on learning, always be learning. And most people don't do that.

It's like sports. If you can't shoot with your left hand, you'd better practice. Business is no different; if you want to get better you practice. You want to get better at coding, you read more code, you write more code. You let people pick at your code, and you compare your code. You argue with people. You put yourself out there. You say, ”Here's where I stand.” It's one thing to put it in a bar conversation; it's a whole other thing to tell the world, ”This is exactly what I think: you are a moron if you buy YouTube.” I could be proven wrong. Worst case is that I learn something.

Click hereto check out the first part of the interview with Mark Cuban

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