According to the Death and Taxes site, a “an official spokesperson for YouTube reached out to Death and Taxes in an effort to clear up what they see as ‘misinformation,’ and present the facts from their side of the story.” Ah yes, that “official spokesman”, boy that one gets around. Seems like we’re always hearing from a Google “official spokesman.” I wonder if that’s a different person than the “Google spokesman”?
Let’s just assume that this interview was vetted and that the massive Google PR machine actually chose Death and Taxes for an exclusive “official” response to the antitrust complaint filed in the US by A2IM and in Brussels by IMPALA on behalf of their respective members.
Apparently what provoked this “effort to clear up what [YouTube sees] as ‘misinformation'” was an article by Ben Sisario in the New York Times. Odd, you say? Why respond to an NYT article with a relatively small blog post “exclusive”? Well…it wouldn’t be the first time that a piece with an odd storyline first surfaces in the Abancay Times Herald, then gets picked up by Tribuna del Habana and eventually finds its way into a major Western newspaper and is reported as at least a rumored fact.
So according to Death and Taxes:
Clearly understanding the reality of the [complaints from indie labels and–perhaps–the antitrust complaints–] our spokesperson from YouTube admitted that about 5% of labels are unhappy. “It’s business. You’ll never get everyone to agree.” However, he was quick to add that YouTube does not negotiate with the trade groups in question, as they do not actually own or bring content to YouTube. He went further, expressing a concern that these trade groups were “misrepresenting their own members” in an effort to “make it sound like this [change in terms] impacts all indies.”
In other words, Google has flexed their dominant muscles on 95% of their label “partners”. A little free advice to Google–when you’re already teetering on the edge of a massive antitrust action in Europe, I wouldn’t be mentioning that you have 95% control over the heated bidets at the Googleplex, much less indie label licensors.
But even so–the issue is not the number of labels, even if it is 5%, the issue is the popularity with users of the artists comprising that 5%. This game of thimblerig with hiding the ball is really silly–isn’t this what the Brits call “silly buggers”?
And then there’s this little tell:
The fact of the matter is, if YouTube does not currently have an agreement with a label in a certain country, videos from certain artists on that label may be unavailable for monetization, or completely blocked depending on the specific agreement. This gets into content ID systems, as well as whether or not a label wants to have their content policed in a specific manner. The ideal example of this is Prince, who works voraciously to keep any of his music off of the service.
Now who would hold up Prince as an example in this case? The EFF (of which Google is a major sponsor) played a large role in the “dancing baby” case that involved Prince. Anyone want to put money on the identity of the “official YouTube spokesman”? Fred von Lohman perhaps? The former EFF big wig and current Google employee?
But here’s the part that caught my eye:
After reports of indie music being blocked on YouTube, indie labels and trade groups picketed Google and in a New York Times profile painted the company as a bully, saying the new system would be massively unfair to them and their artists…[The official YouTube spokesman] was quick to add that YouTube does not negotiate with the trade groups in question, as they do not actually own or bring content to YouTube. He went further, expressing a concern that these trade groups were “misrepresenting their own members” in an effort to “make it sound like this [change in terms] impacts all indies.”
If you read Ben Sisario’s article, you will see that is not what the story said. Sisario reported on the A2IM and WIN statements about YouTube’s negotiating style or lack thereof. A2IM and WIN are trade groups and have made public statements about Google’s high handed practices and A2IM and IMPALA have filed complaints on behalf of their members (IMPALA represents indie labels in Brussels and was involved with opposition to various music industry mergers over the years).
“the trade groups in question” don’t (and probably can’t) negotiate–as YouTube well knows. Merlin does that negotiating and apparently has been trying to negotiate with YouTube. So if A2IM and WIN are “misrepresenting their own members” what they are representing their members about is not the YouTube negotiation–which they are not conducting–but rather the antitrust complaints against Google. If the complaints provoke an investigation of the antitrust complaints that involves “all indies”, then the European Commission’s ruling may well involve all indies in the market. And it looks like the Commission may well be headed that way already according to Reuters.
“YouTube for instance, it’s another kind of activity where Google can also leverage their market power in search engine, and maybe this will give way to another investigation,” he said.
Almunia said one issue was whether to extend the ongoing case against Google following new complaints or to open a separate investigation.
Last week, music trade association Impala asked European Union antitrust regulators to intervene in a row with YouTube over its paid streaming music service, saying some conditions demanded by the company were anti-competitive.
Or as we say in Texas, “Oops….” But you see how Slick from YouTube managed to slide the thimblerig around the table?
Here’s what the New York Times said about a protest at Google over the weekend:
Last week, the dispute spilled out into the streets of New York. On Saturday afternoon, a few dozen supporters of the Content Creators Coalition, an artists’ advocacy group, picketed Google’s office in Chelsea, playing New Orleans-style marches on horns and carrying signs like “Economic justice in the digital domain” and “What YouTube pays? Nothing.”
Marc Ribot, a guitarist who has played with stars like Tom Waits and Elvis Costello, summarized how the larger conflict over streaming revenue affected artists’ careers.
“If we can’t make enough from digital media to pay for the record that we’ve just made,” Mr. Ribot said, “then we can’t make another one.”
Here’s what the Death and Taxes post said (presumably what the “official YouTube spokesman” said):
After reports of indie music being blocked on YouTube, indie labels and trade groups picketed Google and in a New York Times profile painted the company as a bully, saying the new system would be massively unfair to them and their artists.
Not what Sisario said–at all. The Content Creators Coalition is an artist group, not “indie labels and trade groups”. It wasn’t the labels or trade groups who complained–it was the artists.
The artists themselves.
So why would YouTube want to put out that story?
Because they don’t know what to do about the artists who are finally getting the message that YouTube is ripping them off. And it was so easy to blame the RIAA and now they have to work against a much more nuanced opposition from the workers who actually make the music they need to commoditize. Because as we know, the Internet democratizes creativity.
And baby, democracy is a bitch.
While the world has rightly focused on YouTube’s problems with indie labels, in some ways Google has just gotten around to doing to labels what they’ve been doing to songwriters for years.
In case you have any doubts about just how badly YouTube is out of touch with the songwriters, we have a copy of the YouTube songwriter agreement leaked to us available here.
It’s been interesting watching the former music industry executives getting jobs at YouTube and devoting the years of expertise gained from representing artists and songwriters to a single purpose: Screwing those creators as hard as they can while enriching themselves at the creator’s expense.
I heard one of these people describe their negotiation strategy with publishers–which more or less was get the big guys on board and then cram any deal you want down the throats of the independents. No different than what YouTube has been caught doing with the indie labels.
We will be going through the YouTube publishing agreement clause by clause and letting you know what we think about it. Let’s start with the “preamble”. You might say, the preamble? How could they be screwing me in the bleeding preamble? Ah yes, but this is Google, you see. No stone left unthrown.
Next, this is a click through agreement. No negotiation, take it or leave it, just like they did to the indie labels. Think that you can get out of the deal because you weren’t allowed to negotiate? Think you can just say “contract of adhesion” three times and throw salt over your shoulder and get out of it? Not so fast. And remember, these people come from the heart of shrinkwrap license land and they’ve thought about this. I frankly don’t think this would hold up as there’s a world of difference between a shrinkwrap license and a grant of rights in copyright, but do you think that Google won’t exercise their market power to litigate you into the ground? They could just summon forth Daralyn Durie and get her to do to songwriters what she did to authors in the Google Books case. (In fairness, I recommended starting a shrinkwrap license for CDs in 1994 which was summarily ignored by the Establishment. Would a specific shrinkwrap license have helped or hurt the case in 1999?)
So yes, they are consciously trying to jam this down your throat in a legally binding way and yes they will use their legal muscle to make it stick.
And just think–we’re still on page 1.
Google is now competing with Pandora for the title of Easter Bunny of Screwups. YouTube had a window to negotiate a fair deal with the world wide network of indie labels and guess what? They thought it would be a good idea to continue to strongarm the indies and try to jam the YouTube hillbilly deal down their throats.
But realize just how truly arrogant Google really is. They knew that if they didn’t make this YouTube problem go away, the labels would be likely to file a complaint in Europe with the very European competition commissioner who has been “negotiating” (if you can call it that) a settlement with Google over very similar heavy handed dealings with its monopoly search engine. Yes, the embattled EU-Commissioner for Competition Joaquín Almunia is watching his “settlement” with his texting buddy Eric Schmidt evaporate before his eyes.
YouTube’s low rent negotiators thought that the smart thing to do would be to play chicken with the indies to see if the labels would file an antitrust complaint–and guess what? They did. Here’s the five main points of the indies’ complaint according to excellent reporting by Andrew Orlowski in The Register:
The five areas where the group alleges Google breaches EU law are:
tying distribution through the free service to distribution through the new premium service;
leveraging a dominant position in video-streaming distribution into wholesale music-streaming distribution;
imposing “unfair or disadvantageous” licensing conditions on the independents;
terminating or threatening to terminate the supply of video-streaming distribution services to independent companies as well as potentially to UGC distribution and monetisation services in relation to the platform;
and applying dissimilar conditions to equivalent transactions, which puts the independent companies at a competitive disadvantage vis-à-vis the majors.
So listen up schmucks: Having another antitrust case land on Almunia’s desk is not what you want right now. Google could have avoided it, you could have said “oops”, you could have backed down. But no. And why didn’t Google back down? Because they are so arrogant that they don’t think they have a problem. And you know, that’s just fine.
As we’ve noted many times, Almunia is desperately trying to close out the Google case before his term expires in November. Google thought they had a no lose strategy with Almunia–either run out the clock with no settlement before Almunia’s term expires and start over again with his successor, or get him to feel pressure to settle before he turns into a pumpkin.
What they did not anticipate was that there would be a huge backlash to the hillbilly settlement that they “negotiated” with Almunia, not the least of which is the embarrassing YouTube catastrophe. Those idiots at YouTube just tied that one up with a bow. All this means that Google’s “run out the clock” strategy is backfiring.
Realize that Almunia already has a lawsuit against Google drafted and ready to file according to The Economist. So what happens now? Google’s opponents just need to run out the clock, get Almunia out of office with no settlement, appoint a new competition commissioner which is going to happen in the coming days anyway, and–boom. Why would the new commissioner taint himself with a predecessor’s crappy deal that nobody wants? That new competition commissioner takes Almunia’s lawsuit, updates it, and drops it on Google, a company that is now on its way to being just another hated American multinational crassly violating European culture.
The EU officially began investigating whether Google abused its dominance in search and online advertising in 2010. Google is offering to settle because it wants to avoid a massive fine, as well as the bad rep that comes from breaking the law—a stigma that the corporation has managed to evade in the U.S., if you know what I mean. (I mean the Justice Department’s Antitrust division is for display only.)
The letter [making excuses for the crap settlement written by Almunia and leaked to the press] represents a defensive maneuver by Mr. Almunia to quell the concern among some of his colleagues that he should have outlined far firmer action against Google by now.
Yep–I would imagine there’s a lot of scrambling going on in Mountain View right about now. All courtesy of the extraordinarily arrogant YouTube negotiators. Where do they get these ideas?
The Copyright Office Music Licensing Study Roundtables have brought up a couple of nagging issues regarding connecting royalty payments with the songwriters or artists who are entitled to payment.
The first comes up with services that rely on the Section 115 compulsory license for songs. The statute requires the digital service that uses the song to send a notice in advance of using the song. The notice informs the songwriter that the service intends to rely on the compulsory license. There are some procedural safeguards built into this notice process, but common sense will tell you that if you’re going to send the notice, the service has to know who the songwriter is and probably how to reach them.
This means that there should be a very limited category of unknown songwriters whose music is used without being notified. It also assumes that the service does not use the music without having a license.
And therein lies the rub. Medianet is an example of a company that increasingly relies on the compulsory license for its white label back room operation for major retailers. In Aimee Mann’s litigation against Medianet, a declaration was produced that showed that 23% of songs available through Medianet were unlicensed and at one point had a “match rate of less than 55%”. (Declaration of Stephen E. Grauberger, Esq. in Appalseed Productions, Inc. et al v. Medianet Digital, Inc. et al, currently available at http://www.scribd.com/doc/155513456/grauberger-declaration)
Before you blow that number off, realize that Medianet has approximately 20 million songs available in its white label service for digital retailers (I believe, for example, they do work for Beats). 23% of 20 million is 4.6 million songs. So if the songs are both unlicensed and earning money, what should we expect the services to do in order to find the people whose songs were used without a license? (Leaving aside potential infringement claims for unlicensed works.) Because you can see that this creates quite the moral hazard. We should not be surprised that services have a great incentive to sit on the songwriter’s money and not spend any additional effort to find the songwriters.
If we look at the other compulsory license for music we can get some best practices–the compulsory license for the public performance of sound recordings permitted under Section 114. SoundExchange is charged with collecting these compulsory licensing royalties and statements from digital services and then matching the statements it receives–statements that SoundExchange did not prepare–with the artists and sound recording owners who are entitled to the royalties.
Unlike the compulsory mechanical license, there is relatively little notice giving required in order for a service to use the sound recordings. Given the need for artists and sound recording owners to register with to SoundExchange, this is a prime area for best practices as SoundExchange has given effect to a number of programs designed to connect artists with their money.
So this is the first step that digital services could follow for the statutory mechanical license: Take proactive steps to find the people entitled to the money. Don’t just sit there until the statute of limitations runs.
Are the SoundExchange practices absolutely perfect? Of course not. But making a sustained proactive effort to connect people with their money is nothing to turn up your nose at.
Royalty Database: SoundExchange has a searchable database of unmatched royalties (“Does SoundExchange Have Royalties for You?). This allows artists and labels to search for their names to see if there are royalties for them. Imagine if YouTube did this for the extraordinarily convoluted ContentID?
Direct Outreach: It’s always possible to pick up the phone which is another way that SoundExchange tries to locate artists and labels. Digital services that sit on royalties until the songwriter tracks them down simply offload the cost of matching from the service’s balance sheet to the songwriter. The songwriter can’t stop the service from using the music, but the service can stop the songwriter from getting paid for their use simply by not trying too hard.
Matching Against Other Services and Organizations: SoundExchange has conducted a bunch of matching efforts (over 150 according to SoundExchange) by comparing the names of artists with unclaimed royalties to rosters at dozens of organizations like ASCAP, BandPage, CDBaby, MySpace, Reverbnation, Redlight Management, CMJ, SAG-AFTRA, AFM, SXSW, ATO Records, Glassnote Records and Republic Records. Imagine if Spotify, YouTube and Medianet compared their unclaimed mechanical royalties to rosters at the Songwriters Guild of America, Nashville Songwriters Association International and the three major PROs?
If the Aimee Mann lawsuit shows anything about unclaimed royalties at digital services it is this: It’s hard to understand what happened to royalties for the apparently millions of songs that are unmatched–and unlicensed. And if the services are using songs without a license, where are the royalties?
If SoundExchange can manage to conduct sustained outreach programs for artists and labels, then you would think that others could do, especially a $3 billion company like Beats, a public company like Pandora with a couple hundred million in cash laying around, or a company like YouTube that not only grosses billions but is owned by the smartest guys in the room. But these services get away with doing nothing of the kind in their rush to enrich their executives with the creators’ money.
A must read for today’s Anti Piracy Caucus Press Conference from David Lowery writing from China!
I’m in China for the next two weeks performing and doing a series of IP and Music Industry events. I will be occasionally updating readers on my activities.
Congress Should Ask Digital Music Services Why They Don’t Go After Ad Supported Piracy.
Why don’t services like Spotify go after unlicensed competitors like Grooveshark? Why didn’t Apple or Amazon complain about unfair competition from the likes of MegaUpload? Why don’t the ad supported services like Pandora or Spotify complain about the ad supported piracy that directly competes with their advertising dollars? This is something that has always puzzled us here at The Trichordist. Why would otherwise rational business people who are obligated to protect their shareholders interest allow unlicensed competitors to get away with it? Hell I’ve watched them cozy right up to unlicensed competitors. I’m not gonna name names here but a little people watching at SF Music…
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Millions are Homeless but YouTube Monetizes Philippines Sex Tourism Videos, Music by Jack White ads by @greatwolflodge @prudentialbyc @spices4life
A blast from the past so to speak
According to the New York Times, the US-backed (as far as we know) Free Syrian Army struggled to take control of the airport at Aleppo, Syria and laid an months-long siege to the airport that was broken this week when the FSA got some help. More US aid? No…this time not. This time from the Islamic State of Iraq and the Levant. And who might they be? The Long War Journal tells us:
The Islamic State of Iraq and the Levant, one of al Qaeda’s two official affiliates operating in Syria, led a recent decisive rebel assault on a Syrian military airbase in the north. The group used a suicide bomber from “the Arabian Peninsula” to detonate an armored personnel carrier on the base, which was under siege for eight months before falling two days ago. Eight other groups, including the Al Nusrah Front, the Muhajireen Army, and Free…
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