purple motes

YouTube's Video ID technology points to an important new business model.   Video ID finds copyrighted content that has been uploaded to YouTube.  It then gives the copyright holder the choice to block, promote, or monetize that content.  Copyright holders benefit from being able to exploit free, decentralized distribution and promotion of their work.  Google/YouTube benefits from leveraging the value of its search expertise and advertising platform.   Most importantly,  much value is created by allowing licensing decisions for content to be made for small units of value quickly, at low cost, at high frequency, and with directly relevant economic data.[1]

Content pricing and licensing systems are extraordinarily inefficient.  Consider, for example, that the U.S. Copyright Act of 1909 included a provision establishing a two-cents per song royalty for mechanical recordings of musical compositions.  This provision was designed to give player-piano companies equal access to music for their machines.  The two-cents royalty subsequently applied to musical phonorecords.  Because the companies making the records paid the royalties, radio stations could play recorded music without having to negotiate or pay any royalties to music copyright holders.   The two-cent royalty remained law until Dec. 31, 1977.[2]  Thus this government-established price was in effect for sixty-eight years through large changes in music recording and playing technology.  This situation reminds me of iron pot that a fellow graduate student from the former Soviet Union showed me in the early 1990s.  Cast into the metal of the pot was the pot's price.  This Soviet approach to pricing kitchen pots was probably less inefficient than the two-cents royalty established by the Copyright Act of 1909.

YouTube's new search-choose model is a much more efficient business model for licensing content.  Copyright holders make licensing decisions for specific copies with knowledge about circumstances and amount of attention the copy is attracting.  Policy rules can easily be established and changed for these informed licensing decisions.  Compared to traditional licensing approaches, the search-choose model provides much more relevant information for licensing decisions and much lower transactions cost for those decisions.   This is a major, under-appreciated value of the search-choose model.

Free, decentralized distribution and promotion of content potentially has great value for copyright holders.  Attracting attention to content is expensive.  Movie producers, for example, often spend more promoting a movie than they do in making it.  Peer-to-peer diffusion of information and actions among social networks has always strongly affected aggregate patterns of behavior.  Online social networking tools make social networks even more powerful. Attempting to suppress persons' natural propensity to share, discuss, and promote content mainly pushes such behavior underground and alienates potential customers.  The search-choose model transforms a unsolvable problem into a significant business benefit.

The search-choose model better suits web video than web text.  ISPs might attempt to insert text ads into copies of copyrighted textual content found on webpages.  Web mail providers could insert (additional) advertisements in copies of copyrighted textual content found in emails.  However, ISPs don't have businesses structured to serve ads, and inserting ads into webpages problably would anger ISPs users.  Web mail providers, on the other hand, have little incentive to insert additional advertising with shared revenue.   In contrast, web video providers have an incentive to address the licensing problem, and they can do so in a way that's not likely to anger their users.

Having a lot of video on a common platform makes finding instances of copyrighted work easier.  It also makes inserting ads easier.   YouTube thus already has big advantages in offering a search-choose model to copyright holders.

Note:

[1] Google recently stated that 90% of its 300+ Video ID partners have chosen to monetize found content rather than block it.  Companies choosing to monetize found copyrighted video include major media companies such as CBS, Universal Music, Lionsgate Entertainment, and Electronic Arts.

[2] Historical versions of U.S. copyright acts are helpfully available at copyrightdata.com.  The U.S. Copyright Act of 1976 raised the royalty to  2.75 cents.  Broadcast radio stations in the U.S. have retained to the present the right to play recorded music without the need for negotiating a license or paying a royalty.  The situation is much different for Internet radio.  Copyright royalty rates in the U.S. are now typically established through the Copyright Royalty Board (CRB) for periods of four to ten years.  That CRB's price-setting process is far from simulating that of an well-functioning, decentralized decision mechanism.

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Balm for the creative human being, a lovely poem at TinkerX:

I own the moon

Because I say I do.

....
You lovers on my white-glow leaning;
you hunters creeping, deer-spoor seeking;
you children peering, “One day,” dreaming;
all who look upon this, frankly, dreary, lifeless face,
this wide-eyed, gaping maw of rock and shining, lantern jaw,
you now owe toll!

No more free ride. Pay up. Way up.

The Man in the Moon be damned.
Homage? For the loons.
I own the moon.

Read the whole poem, and weep.

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False or excessively broad claims to rights, if taken seriously, could have devastating effects on content businesses. For example, U.S. National Football League (NFL) broadcasts include the following statement:

This telecast is copyrighted by the NFL for the private use of our audience. Any other use of this telecast or of any pictures, descriptions, or accounts of the game without the NFL's consent, is prohibited.

The claim, "This telecast is copyrighted by the NFL for the private use of our audience," is absurd. Copyrighting a telecast is not necessary for the private use of it, nor is advancing that use a credible explanation for the NFL's copyright action. The problem is not just that the NFL has not expressed a credible business justification for its copyright. The second sentence of the NFL's statement seems to imply that football fans need permission from the NFL to discuss games ("accounts of the game") that they watch on television. That's an impressive anti-social business-destroying effort.

The NFL has not yet succeeded in destroying its business. Perhaps that's because because football fans recognize copyfraud. The NFL recently has shown no respect for copyright law. The RIAA has executed astonishing initiatives to destroy the music business. If the NFL is serious about destroying the football business, it might run a few plays from the RIAA's playbook.

Shrewd and successful new media businesses seek to become platforms for users to share and discuss users' works. YouTube's terms of service state:

For clarity, you retain all of your ownership rights in your User Submissions. However, by submitting the User Submissions to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website and YouTube's (and its successor's) business, including without limitation for promoting and redistributing part or all of the YouTube Website (and derivative works thereof) in any media formats and through any media channels. You also hereby grant each user of the YouTube Website a non-exclusive license to access your User Submissions through the Website, and to use, reproduce, distribute, prepare derivative works of, display and perform such User Submissions as permitted through the functionality of the Website and under these Terms of Service. The foregoing license granted by you terminates once you remove or delete a User Submission from the YouTube Website. [first bold type in original; second, added here]

Google and BSkyB (Sky) have teamed up to produce SkyCast. This video service offers users a much different deal:

If you send us videos, messages or other content, we will be able to use your content in any way we like. So, we might decide to put your content on one of our other services, like TV, or give it to someone else to put on one of their services. We might even decide not to use it at all! If you decide to take your content off the Service, Sky can still use it in any way we like.

In addition:

You waive all moral rights in relation to your Content.

Moral rights, such as Article 6bis of the Berne Convention, apparently can be waived in some jurisdictions. While SkyCast filters submitted content, its terms of service declares "thou shalt not submit content" that:

1.1 is in breach or promotes the breach of any third party rights (including third party intellectual property rights);
1.2 is defamatory, offensive or libellous;
1.3 promotes racism, bigotry, hatred or harm of any kind against any group or individual or would subject any person to ridicule or cause other people to shun or avoid such an individual;
1.4 harasses or advocates the harassment of another person or persons;
1.5 promotes conduct that is abusive, threatening, obscene or distasteful;
...
1.24 refers to any arrest of an individuals [sic] or any active court proceedings.

Moreover, in conjunction with the opportunity to offer their work to SkyCast, users are required to accept liability to SkyCast and third parties:

5.5 You will reimburse Sky and any third party who provides services to you as part of the Service for any losses, costs or damages incurred by Sky and/or any third party, on demand, arising out of:
5.5.1 your use of the Service, or anybody else that your [sic] allow to use the Service using your SkyCast Profile; and/or
5.5.2 your breach of these Terms of Use.

How would one assess the financial risk of this liability given the terms of service?

I cannot imagine that any rational, informed users would actual agree to submit work to SkyCast. Put different, if users take seriously their rights as currently set forth in SkyCast's terms of service, I think SkyCast's business is worthless.

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The pinnacle of life.

[if you don't see the video, try here]

Originally the video had a better soundtrack that used two short excerpts from copyrighted songs from albums that I purchased several years ago. Since the use of short excerpts of a copyrighted song in a non-commercial video made available on a personal website is highly controversial under copyright law, I deleted my original soundtrack and replaced it with the present one.

Given that I spent significant time to make this video, I would have been willing to spend a small amount of money to get rights for non-commercial use of the song excerpts in a video posted only on my personal blog. One song used words and melody from "Happy Birthday," which itself is a copyrighted work. Not sure how to sort that one out.

The website of the group that recorded the other song had a FAQ on song use that pointed fans to a licensing site. The licensing regime is very complex. In addition, the licensing site notes, "EMI does not allow their songs or recordings to be used on the Internet in any form." The licensing body encourages potential customers to send them a written proposal. It explains:

Due to the high volume of requests, the amount of research involved as well as the various levels of approval your request will have to go through, it may take 4 to 5 weeks for you to receive your license, which will be sent regular mail. We are unable to respond directly to each request as they come in. Rest assured, we will process your request as quickly as possible.

Of course they will. That's why they use regular (snail) mail!

Telephone companies could teach music licensing bodies a lot about customer service.

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The Internet enables sharing the intelligence and creativity of persons around the globe. Along with this exciting new set of possibilities is a little recognized shadow: the increased opportunity cost of false copyright and false authors’ rights claims.

In his insightful article, Jason Mazzone examines the problem of false copyright claims with respect to U.S. copyright law. He observes:

Copyright law itself creates strong incentives for copyfraud [false copyright claims]. The limited penalties for copyfraud under the [U.S.] Copyright Act, coupled with weak enforcement of these provisions, give publishers an incentive to claim ownership, however spurious, in everything. Although falsely claiming copyright is technically a criminal offense under the Act, prosecutions are extremely rare. Moreover, the Copyright Act provides no civil penalties for claiming copyrights in public domain materials. [Mazzone, pp. 1029-30]

Mazzone cites numerous examples of what he considers to be copyfraud. One gross, but not unusual, example that he cites is a popular pocket version of the U.S. Constitution. It includes a copyright notice and the admonition “[n]o part of this publication may be reproduced or transmitted in any form or by any means…without permission in writing from the publisher.”

The aggregate cost of copyfraud has probably more than doubled over the past decade. Using small quotes from a copyrighted text to document, illustrate, or advance discussion of a related issue is widely recognized to be fair use. Bloggers do this extensively. Falsely asserting that such use is not permitted probably doesn’t have much effect. Other forms of textual copyfraud may have significant cost. But fair use of copyrighted images, audio, and video is much less legally clear and publicly well-understood than fair use of copyrighted text. Moreover, over the past decade there has been an astonishing expansion of possibilities for creating and sharing non-textual works. The cost of copyfraud with respect to images, audio, and video has increased with this expansion. The cost of this type of copyfraud has probably become larger than the cost of copyfraud with respect to text.

Getting copyright and authors’ rights to serve better the common good requires more attention to the economic and legal implications of false claims.

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