Archive

Archive for March, 2014

Should Artists Hitch Their Royalties to Advertising in the YouTube Monopoly: @zoecello’s insights

March 15, 2014 3 comments

I ain’t gonna work on Maggie’s farm no more
No, I ain’t gonna work on Maggie’s farm no more
Well, I try my best
To be just like I am
But everybody wants you
To be just like them
They say sing while you slave and I just get bored
I ain’t gonna work on Maggie’s farm no more

From Maggie’s Farm by Bob Dylan
Copyright © 1965 by Warner Bros. Inc.; renewed 1993 by Special Rider Music
(Read more: http://www.bobdylan.com/us/songs/maggies-farm#ixzz2w2uoNmHA)

We’ve pointed out for years that the collision of the Web 2.0 advertising based economy creates an odd and unhealthy dynamic for artists.  There is no place where this is more prevalent than YouTube.

YouTube routinely delivers random advertising for a variety of products against artist videos (either the “official” video or user generated versions of the artist’s work).  This means that artists have lost control of a significant marketing restriction that was hard won over years of incremental contract negotiation:  Artist approval over the association of their music with products in commercials or endorsements.

It’s important to note that YouTube and iTunes made a choice.  iTunes decided to get into the digital distribution business and still accounts for the bulk of digital revenue.  iTunes allows artists to charge a price for their music.  This indicates a confidence in the iTunes offering–we have these goods and we expect you to buy if you want to engage with us.

What’s important to iTunes is attracting fans who are both interested in music and who want to engage in some commercial transaction with the artist and with iTunes.  If you isolate iTunes as a business (separate from Apple), iTunes only makes money when the artist makes money.  In a significant way, iTunes interests are aligned with the artist.

YouTube did not make this choice.  YouTube instead adopted the antebellum economy of Web 2.0:

  • free labor (also known as “user generated content” from users or seeders employed by YouTube who create videos and upload them)
  • free labor in the form of YouTube’s exploitation of traffic driven to YouTube by artists promoting their higher value recordings, which is accelerated by
  • YouTube’s essential monopoly control over online video content through Google’s subsidizing YouTube’s growth in the form of actual cash subsidies from its monopoly search business (essentially extending its effective monopoly of search into the video search vertical)–meaning that fans almost always go to YouTube to search for videos or are driven to YouTube in a Google search for videos
  • only compensating artists in the form of a revenue share for advertising sold against the artist’s videos from whatever source derived, and

Selling advertising against YouTube search results that YouTube does not share with anyone.

rilo kiley search box

In this example, a YouTube search for “rilo kiley” returned an ad for Taylor Swift fragrances and an ad for another artist’s video on Vevo (which is another service that is partly owned by Google and some major labels, but that is totally dependent on YouTube to operate).  Rilo Kiley then is used to promote the sale of products and the artist Hamilton Leithauser, who probably has no idea that Rilo Kiley is being used to promote his record.

So in many important ways, YouTube is the polar opposite from iTunes.

vampire weekend

In this example, a YouTube search for Vampire Weekend returned ads for “Teeth in a Day Las Vegas” and Jenny Craig weight loss centers.

It must be said that there is probably a 90% probability that the only way that “Teeth in a Day Las Vegas” and Jenny Craig could get their brands associated with Vampire Weekend is through the charlatans at YouTube for YouTube’s profit under its antebellum economy.

But nobody asked Vampire Weekend or Rilo Kiley or any other artist who drives traffic to YouTube whether they like it or not.  And if for some strange reason these artists agreed to allow their music to be used to promote “Teeth in a Day Las Vegas”, it would be at a significant fee–that they would not share with YouTube.

So even if the artist decides not to “monetize” their video on YouTube, YouTube will monetize their videos in video search results.

It is in this context that cellist Zoë Keating makes this thoughtful comment:

Until 2013, I always made a point of not monetizing videos that are live concerts (like those for Wired or ABC Radio National or Chase Jarvis) or 3rd party placeholder music videos….because I wanted the viewers to experience the music. I didn’t want them to see ads, especially ads for things I don’t support, like Doritos. Everyone seems gung ho to embrace advertising but I would like people to see LESS ads, both because I think they make an experience unpleasant and because I want the entire world to consume less stuff (that goes for my merch too. I’m happy to sell you a digital download but I don’t want to sell you a tshirt). Until Youtube allows me some control over what is slapped on my music, I don’t think I want advertising on it. [emphasis mine]

Zoë is articulating a view that I hear from artists a lot–why are we forced to take a share of advertising that we aren’t asked to be associated with and have our videos posted on a service that will use our work regardless of whether we want it to be there.  Unless of course the artist spends hours of uncompensated time dealing with YouTube’s byzantine content management system which independent artists rarely get access to anyway.

rilo kiley pringles

For example, here’s a screen shot from Rilo Kiley’s Let Me Back In video, loaded up with advertising–an ad for Jake Bugg, Pringles and Walmart.  I seriously doubt that Jake Bugg has any idea that Google ads are using Rilo Kily’s videos to sell his records, and neither Rilo Kiley or Jake Bugg had any idea that their names or videos would be associated with the sale of hyper-processed potatoes heavily laced with fat and salt, aka Pringles.

What’s the answer?  One is the same as it has been ever since YouTube began–stop taking without asking.  And for the organized music business–stop letting them do that or put more restrictions on YouTube’s “monetization” of licensed videos.

Understand this: The Web 2.0 antebellum economy is designed for one thing and one thing only and that is to enable incumbent gatekeepers like YouTube to extract as much value from artistic works as possible while paying the creators as close to nothing as possible and while paying nothing to the users who create and upload the “user generated” clips.

vampire weekend official

Vampire Weekend’s official video for “Cousins” was monetized with ads for The Quiet Ones horror movie–maybe because of the “vampire” keyword?  I doubt this is what either Lionsgate or Vampire Weekend had in mind.

Zoë Keating has never made a music video, yet she has to answer many of these questions.  If you ask me, that’s because artists are essentially forced to participate in YouTube due to the extreme lack of control over the service.

Lastly about Youtube… I’ve never made a music video. Maybe I will in the future. I know someone from Google recently said at Midem that “the video is the thing”, and the company changed their search results to reflect that. In my case that isn’t actually true. But what outcome do I want? Until the day I make a video should I upload all my songs to Youtube and make placeholder images for them? And if I do, should I stick to my principles and make the experience more pleasant for listeners and forgo the advertising revenue? Or should I sell out for a few pennies, make the experience as unpleasant as possible and accept ads for products I don’t support? I don’t know the answer to that one!

So it’s pretty clear that despite all of Google’s protestations about online tools to help manage content, there’s one tool that Google doesn’t have for the artist who wants no part of the entire YouTube grubbiness.  The tool that stops the artist’s work from being made available on YouTube in the first place.

There’s a reason that YouTube executives got booed at MIDEM.

Goodlatte and Schiff and the Elephant in the Room

March 14, 2014 Comments off

Winning the week:  This was a good week for independent artists thanks largely to the heroic efforts of Maria Schneider.  A majority of the members of the House of Representatives IP Subcommittee heard Google try to blame the victim and explain how their receipt of 200 million takedown notices a year was (A) consistent with the goals of the DMCA as drafted, (B) a demonstration of abuse by independent artists and major copyright owners alike, but most importantly (C) not sufficient notice for Google to have to change anything about their very, very defective product.

Chairman Bob Goodlatte and Representative Adam Schiff wrote this “Dear Colleague” letter regarding another piece of evidence released this week–Digital Citizens report on ad sponsored piracy.  This isn’t the first rodeo on this subject for Goodlatte and Schiff, so I think they’re probably getting a bit more than they care to of Google’s BS this week.

The elephant in the room?  How much does Google profit from theft?  That could be a good follow up question for members at this week’s hearing on DMCA.  Because it’s right on point:  The reason that Google perpetuates its absurd interpretation of the DMCA is because it profits them to do so.  The only question is by how much.

And PS:  It’s spelled R-I-C-O.

Online Advertising and Copyright Infringement: “Good Money Gone Bad”

From: The Honorable Adam B. Schiff

Dear Colleague:

We write to bring your attention to a recently released first of its kind study commissioned by the Digital Citizens Alliance and conducted by MediaLink on the revenues generated from online advertising by websites dedicated to copyright infringement. In the “Good Money Gone Bad” study, researchers analyzed traffic and advertising data for 596 sites that generate big profits by promoting stolen goods – i.e. movies, music, television, and other copyrighted content – online and found the sites generated an estimated $227 million in total advertising revenue in 2013 alone. As the president of MediaLink put it, “this is big business.”

The report concluded, “[t]he 30 largest sites studied that are supported only by ads average[d] $4.4 million annually” … and “[e]ven small sites can make more than $100,000 a year from advertising.” Addressing the last point, the study noted the low technical and financial barriers to entry for setting up a site dedicated to the theft of rights-protected content along with the ease of attracting an audience of consumers of “free” content.

These sites contribute nothing to the production of the goods they make available and exist solely to profit their owners and operators as opposed to providing any compensation to those who create and own the goods they steal so they generate enormous profits. Their margins typically range from 80% to 94%.

In many cases, the advertising that appears on these sites is from large, well-known brands that have no intention of being associated with illicit operators. But the appearance of instantly recognizable corporate logos not only supports these sites, it can also fool consumers into believing the site is a legitimate source for the content they seek.

The “Good Money Gone Bad” study underscores the large beneficial impact of effective voluntary commitments by good-faith actors in the online advertising ecosystem to “follow the money” and to act together to cut off the supply of dollars to sites that intentionally profit by promoting stolen goods.

The International Anti-Piracy Caucus, which we co-chair along with Senator Orrin Hatch and Senator Sheldon Whitehouse, was among the first to call attention to the growing problem of ad supported stolen content online, and to call on advertisers, advertising agencies, and advertising networks to adopt effective standards to cut funds off to sites that profit from stealing the hard work of creators.

We first highlighted the problems associated with ad supported content theft in a series of letters in 2011. Our efforts helped spur the American Association of Advertising Agencies (4As) and the Association of National Advertisers (ANA) to adopt best practices. The Caucus has also called upon the Interactive Advertising Bureau (IAB), which represents advertising networks, to adopt more effective controls to prevent ads from being served to sites dedicated to trafficking in stolen goods.

The full “Good Money Gone Bad” study can be viewed here. For more information on the International Anti-Piracy Caucus or to join our efforts, please contact Jeff Lowenstein in Rep. Schiff’s office or David Whitney on Rep. Goodlatte’s Judiciary Committee staff.

Sincerely,

Bob Goodlatte                                                  Adam B. Schiff

                                       Member of Congress                                     Member of Congress

Copyright Erosion: How DMCA Misuse Became A Multimillion Dollar Shakedown and Income Transfer

March 12, 2014 Comments off

Music Technology Policy

I participated on a panel at the 2013 USC Institute on Entertainment Law and Business on October 5 in Los Angeles.  The topic was the erosion of copyright, not just through a lack of enforcement, but through permissive misinterpretation of the intentions of Congress.

My presentation was based on the briefing on brand sponsored piracy that I gave to the National Association of Attorneys General earlier this year (which you can see here).  A caveat–while I discuss only Google here, these problems are not limited to Google alone.  However, since Google is a monopolist in both search and online advertising, the difference between what Google does and others do while measurable is unlikely to be statistically significant.

The argument is that due to an extraordinarily distorted interpretation of the “safe harbors” created with the best of intentions by the Congress in 1998 (the so-called “DMCA notice and takedown”), the…

View original post 1,980 more words

The DMCA is not an Alibi: The Googlization of Art and Artists

March 7, 2014 Comments off

Music Technology Policy

[We first posted this in October 2006.  How little has changed in 8 years.  According to Google’s most recent Transparency Report, Google receives 20 million take down notices a month for search alone.

torrentz eu

google takedowns]

[Ed. Charlie says:  This was a preamble to the 2011 posting of Chris Castle’s 2006 article “The DMCA Is Not An Alibi”.  Google recently published its 2011 “Transparency Report” which has a couple interesting facts regarding takedown notices it received.  Despite the $500,000,000 forfeiture by Google when it was caught in seven different sting operations profiting from the sale of controlled substances online, there is only one reference to takedown notices relating to drugs in the report–from South Korea.  “[A] request from the Korean Food and Drug Administration (KFDA) resulted in the removal of 441 ads that violated KFDA regulations.”  And the only country in the world where Google received a “content removal notice” that…

View original post 1,061 more words

Text of Songwriter Equity Act of 2014

March 3, 2014 Comments off
[Congressional Bills 113th Congress]
[From the U.S. Government Printing Office]
[H.R. 4079 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4079

   To amend title 17, United States Code, to ensure fairness in the 
 establishment of certain rates and fees under sections 114 and 115 of 
                  such title, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 25, 2014

Mr. Collins of Georgia (for himself and Mrs. Blackburn) introduced the 
  following bill; which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

   To amend title 17, United States Code, to ensure fairness in the 
 establishment of certain rates and fees under sections 114 and 115 of 
                  such title, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Songwriter Equity Act of 2014''.

SEC. 2. EFFECT ON ROYALTIES FOR UNDERLYING WORKS.

    Section 114(i) of title 17, United States Code, is amended to read 
as follows:
    ``(i) Effect on Royalties for Underlying Works.--It is the intent 
of Congress that royalties payable to copyright owners of musical works 
for the public performance of their works shall not be diminished in 
any respect as a result of the rights granted in section 106(6).''.

SEC. 3. APPLICATION TO SECTIONS 112(E) AND 114(F) SOUND RECORDING 
              PROCEEDINGS.

    (a) Proceedings Not Affected.--Neither section 2 of this Act nor 
the amendment made to section 114(i) of title 17, United States Code, 
by such section 2 shall be taken into account in any proceeding to set 
or adjust the rates and fees payable for the use of sound recordings 
under section 112(e) or section 114(f) of such title that is pending 
on, or commenced on or after, the date of the enactment of this Act.
    (b) Decisions and Precedents Not Affected.--Neither section 2 of 
this Act nor the amendment made to section 114(i) of title 17, United 
States Code, by such section 2 shall have any effect upon the 
decisions, or the precedents established or relied upon, in any 
proceeding to set or adjust the rates and fees payable for the use of 
sound recordings under section 112(e) or section 114(f) of such title 
before the date of the enactment of this Act.

SEC. 4. FUNCTIONS OF COPYRIGHT ROYALTY JUDGES.

    (a) In General.--Section 801(b)(1) of title 17, United States Code, 
is amended by striking ``The rates applicable under sections 
114(f)(1)(B), 115, and 116 shall be calculated to achieve the following 
objectives'' and inserting ``The rates applicable under sections 
114(f)(1)(B) and 116 shall be calculated to achieve the following 
objectives''.

    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to any proceeding that is pending on, or commenced on or after, 
the date of the enactment of this Act.

SEC. 5. ROYALTY PAYABLE UNDER COMPULSORY LICENSE.

    (a) In General.--Section 115(c)(3)(D) of title 17, United States 
Code, is amended by striking ``In addition to the objectives set forth 
in section 801(b)(1), in establishing such rates and terms, the 
Copyright Royalty Judges may consider rates and terms under voluntary 
license agreements described in subparagraphs (B) and (C).'' and 
inserting the following: ``The Copyright Royalty Judges shall establish 
rates and terms that most clearly represent the rates and terms that 
would have been negotiated in the marketplace between a willing buyer 
and a willing seller. In establishing such rates and terms, the 
Copyright Royalty Judges shall base their decision on marketplace, 
economic, and use information presented by the participants. In 
establishing such rates and terms, the Copyright Royalty Judges may 
consider the rates and terms for comparable uses and comparable 
circumstances under voluntary license agreements.''.

    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to any proceeding that is pending on, or commenced on or after, 
the date of the enactment of this Act.

It’s a $mall World: Emails Disclose Sheryl $andberg Brokering Google-Wikipedia Di$pute

March 2, 2014 Comments off

In the middle of an antitrust case about Silicon Valley hiring practices (which adds a whole new dimension to the antebellum business of Web 2.0), an interesting email exchange surfaced.  This one is among ex-Googler Sheryl Sandberg (yes, that Sheryl Sandberg) and some of her former colleagues.  (MTP readers will remember that according to some filings by Google stockholders, Sheryl Sandberg appears to be in the middle of the Google Drugs case that resulted in Google’s payment of $500,000,000 of the stockholders money to keep an unknown number of its senior executive team from being indicted.  That didn’t come up on Sandberg’s book tours and is not part of her carefully crafted image.)

One heavily redacted email thread offers some insight into the relationship between Google, Wikimedia Foundation and Wikipedia, of all things, and even mentions child labor magnate Jimmy Wales (this was before the hiring of Wikimedia’s tech industry lobbyists in 2012).  This exchange is from 2008, and may well have been the cornerstone of the lobbying partnership between Google and Wikimedia that blossomed in 2012.  (The email exchange has the unfortunate distinction of being from Exhibit 666 in the litigation.)

email2

email1

Of course, Ms. Gardner omitted that her Wikimedia Foundation leased office space from Wikia, so El Jefe Jimbo was not the only connection between the two organizations.

And realize that “Wikia Search” was (according to Wikipedia) a potential threat to Google:

“Wikia Search followed other experiments by Wikia into search engine technology and officially launched as a “public alpha” on January 7, 2008.  The roll-out version of the search interface was widely criticized by reviewers in mainstream media.  After failing to attract an audience, the site closed by 2009.”

Now read this again:

I personally  don’t believe any of this. I think  Google and Wikipedia can and should have a complementary  and positive relationship. And I gather Larry [Page] and Sergey [Brin] feel  the same: I believe  they’ve told Jimmy [Wales] that Google has no ill will towards Wikipedia, and that they’d be willing to make a donation to us in order to signal that publicly.

No…say it ain’t so, Jimbo.  Don’t break the Internet!

%d bloggers like this: