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Wednesday, May 27, 2009

Payoff Over a Web Sensation Is Elusive

Jeff J. Mitchell/Getty Images

Susan Boyle is seen by millions online, but cashing in on the clicks has been tricky.

Published: May 24, 2009

Susan Boyle, the frumpy Scotswoman who became a worldwide singing sensation last month, may wind up as the winner this week of “Britain’s Got Talent,” the hit ITV show.


An image from a YouTube video of Simon Cowell during a performance by Susan Boyle.

After a six-week absence, she returned on Sunday night to sing “Memory” from the musical “Cats,” wowing the crowd and advancing to Saturday’s finale. The producers immediately posted her performance on the Internet for the rest of the world to see.

She has already won a popularity contest on YouTube, where videos of her performances in April have been viewed an astounding 220 million times.

But until now, her runaway Web success has made little money for the program’s producers or distributors.

FremantleMedia Enterprises, a production company that owns the international digital rights to the talent show, hastily uploaded video clips to YouTube in the wake of Ms. Boyle’s debut, but the clips do not appear to be generating any advertising revenue for the company. The most popular videos of Ms. Boyle were not the official versions but rather copies of the TV show posted by individual users.

The case reflects the inability of big media companies to maximize profit from supersize Internet audiences that seem to come from nowhere. In essence, the complexities of TV production are curbing the Web possibilities. “Britain’s Got Talent” is produced jointly by three companies and distributed in Britain by a fourth, ITV, making it difficult to ascertain which of the companies can claim a video as its own.

Before the current season of the talent show started on April 11, the parties tried to cut a distribution deal with YouTube, but they could not agree on terms, according to two people with knowledge of the talks. The people asked for anonymity before they would discuss confidential negotiations.

YouTube, a unit of Google, has been keen to make money from its hulking library of online video by signing contracts with copyright owners and sharing the revenue from ads it sells before, during, after and alongside the videos. Major media companies have shown varying degrees of interest in these deals, in part because they are reticent to split much money with Google.

Then Simon Cowell, an “American Idol” judge who is also a producer and a host of “Britain’s Got Talent,” helped introduce Ms. Boyle to the world.

Her performance was a made-for-TV fairy tale: a dowdy 48-year-old makes awkward jokes, the audience engages in a collective eye-roll, then the performer shocks everyone by bursting into a soulful, Broadway-worthy rendition of “I Dreamed a Dream.”

Cut to the amazed faces in the theater, hear the judge Piers Morgan call her singing “without a doubt the biggest surprise I have had in three years on this show,” and cut to commercial.

On YouTube, though, where the segment was viewed by more people than could ever have witnessed it on TV in Britain, there were no commercials. The tens of millions of views swiftly brought YouTube and the producers back to the negotiating table, according to the people with knowledge of the talks, and soon they reached a deal for video clips.

YouTube was especially interested in a deal, according to the people with knowledge of the talks, because the company was essentially losing money by serving every video stream without recouping any of the costs.

FremantleMedia, which had registered YouTube accounts for the next several seasons of “Britain’s Got Talent” in advance, uploaded dozens of clips from the show in late April. But American viewers are not seeing ads on the video pages, suggesting that the companies still do not see eye to eye.

FremantleMedia “is investigating the best routes to monetize the channel in conjunction with relevant partners,” said a spokeswoman, Belinda Thomas, who said the company would not comment further.

The production companies and YouTube worked through the weekend on a more comprehensive deal, one of the people with knowledge of the talks said. The deal would enable FremantleMedia to place ads against unofficial copies of the show, using YouTube’s “Content ID” system, which companies like Universal Music already use. For now, the copies simply show a message directing users to the official talent show channel managed by FremantleMedia.

“We’re glad to be helping Britain share its talents with the rest of the world,” a YouTube spokesman, Ricardo Reyes, said. “It’s up to our partners to decide what to do with their videos on YouTube.”

How much money have the parties lost? In the days after Ms. Boyle’s debut, The Times of London published what it called a “crude estimate” suggesting that the parties involved had left $1.87 million on the table.

That is based on 75 million streams of the various clips of Ms. Boyle, which the newspaper estimated could get $20 to $35 for every 1,000 views in the United States, and more than that in Britain.

While other TV networks act quickly to remove videos when users upload them without copyright permissions, ITV has “nonexistent piracy enforcement on YouTube,” said David Burch, a marketing manager at TubeMogul, an online measurement firm.

The broadcaster and producers allowed the copies to stay online because they created buzz for the program. The clips have received more than a half-million user comments.

The view counts continued to grow as people awaited Ms. Boyle’s next performance. Visible Measures, a company that tracks online video placements, said Ms. Boyle was responsible for the fastest-growing viral video in the roughly five-year history of Web video. Only three other videos have received more clicks, said the company, which tracks viewing across about 150 sites. (YouTube is the biggest by far.)

Matt Cutler, the vice president for marketing and analytics at Visible Measures, said the level of interest was “off the charts.”

“On TV, watching the content is the end of the experience. Online, watching the content is the beginning of the experience,” Mr. Cutler said.

The history of viral videos has shown that when new clips about a subject become available — in Ms. Boyle’s case, her new performance on Sunday — it “actually boosts the viewership of the existing assets,” Mr. Cutler said.

Six hours after the new performance, dozens of copies were already circulating on YouTube.

Miguel Helft contributed reporting.