Consider this. You plan to launch a new video website that will host only movie trailers and music videos. The traffic for such an ‘entertainment’ portal is almost guaranteed and there are no costs involved because you can easily find content for your portal on YouTube.

You just need to search for relevant clips on YouTube and embed them into your site. YouTube also offers content via APIs so you can just hire someone at Rent-a-Coder to write a bot that generates content for your site automatically. Once traffic builds up, place AdSense ads on the video pages and start making revenue.

Sounds like an effective business plan with no investment, right?  Here are some YouTube clones that seem to follow exactly this approach:

YouTube Clone from Smashits.com

YouTube clone from Bizhat.com

If you too have plans to venture into similar territory, drop the idea now because you never know when Google pulls the plug on your site and then all embedded clips will stop working. Here’s what the updated Term of Use document from YouTube has to say:

“We will enforce our Terms of Use against, say, a website that does nothing more than aggregate a bunch of embedded YouTube videos and intentionally tries to generate ad revenue from them.”

According to YouTube Terms, websites may not use the YouTube video player “for the primary purpose of gaining advertising or subscription revenue” - this is however relaxed if occasionally embed YouTube videos “in your blog to comment on it or show your readers a video you like, even if you have general purpose ads somewhere on your blog.”