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Guest Post by @schneidermaria: Content ID is Still Just Piracy in Disguise: An Open Letter to Rightsholders and a Music Industry Ready to Renegotiate with a Monster

July 31, 2016 3 comments

By Maria Schneider

Content ID, YouTube’s digital fingerprinting technology, is under fire lately for very good reason.  Originally touted by YouTube as an effective method of blocking illegal uploads, Content ID was ostensibly the service’s way to protect copyright holders.  But Content ID quickly morphed into a self-serving massive moneymaker.  Their pitch goes something like this: “Hey, advertising is good for you.  Why not use Content ID to cash in on all the piracy by getting a share of revenue we can generate from ad placement?”  Well, they don’t call it piracy – but make no mistake, in the end, their whole scheme still depends on a culture of piracy.

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Since the media presents YouTube’s misleading talking points without challenge, it’s up to us to expose what’s really going on.  There’s a lot to sift through when one digs deep, so bear with me.  In the end, ask yourself if jumping on board, monetizing through YouTube’s Content ID, makes us all complicit in perpetuating the piracy racket that YouTube created to make billions for itself.

1.  YouTube’s 3 Billion Figure is all Smoke and Mirrors

YouTube dangles Content ID and monetization in general in front of music creators to lure us to participate.  YouTube’s line is that if we jump on the monetization bandwagon, they’ll share ad revenue with us.  Sounds like a good deal, but YouTube’s ad revenue has proven paltry when compared to the real cost of producing music.  Like an Atlantic City casino, YouTube wants us to believe that we just might hit the jackpot.  Stories of viral videos make the news and seem like the new brass ring for rights-holders, but this insightful article explains how rare “viral” is.  And of the very, very few who achieve viral, who can sustain it and make a career of it?

The real truth is that most music creators on YouTube are making nothing or next to nothing from the use of their work.  YouTube acknowledges that out of all people in the world with videos/music on its service, only 8000 “partners” qualify for Content ID.  The rest of us can put ads on the videos we ourselves post, but likely the majority of us are never paid anything, not reaching the $100 threshold YouTube requires of us to receive the first check.  And our own uploaded content is competing with pirated uploads of our music that we’re left to police.  The mountain of cash from all the music creators who haven’t yet reached $100 must be creating one hell of a “float” for YouTube.

YouTube boasts of $3 billion in total payouts, but dig slightly below that surface, and you see a shameful number.  They’ve admitted it’s really less than $1 billion per year.  And think about it:  YouTube has over a billion users each month, and over 12 billion users a year, so do the math.   The measure of fairness is not how much YouTube has paid out in total, but it’s whether those who make the music that fuels YouTube’s fortune are getting paid adequately.  Here would be important questions to ask:

1. How many rights-holders are represented on YouTube?  (That number must be astronomical, and likely impossible to calculate.)

2. How many rights-holders can actually pay for the budget of a record from revenue they receive from YouTube?

3. How many music creators never reach the $100 threshold?

4. Of all the music-rights-holders represented on YouTube, how many make even minimum wage on an ongoing basis, year after year, for their life’s work that sits, year after year, on YouTube’s massive servers?

Every musician knows that as long as music is available on YouTube for free, it won’t likely sell very well elsewhere, especially with all the available apps that can rip mp3s right from YouTube videos into your personal library.  And hey, what happened to the mechanical royalty for all of this, guys?  (I’ll be writing about that soon.)  So, if YouTube is going to corrupt all other income streams for those who invest their lives and means into the making of music, then YouTube should at very least pay a living wage, right?

We’ve had plenty of time to test the ad model, and one thing is for certain:  Ad revenue does not pay for the making of music – not even remotely close.  The music industry should quit banging its head into that same wall looking for results.  Face the facts folks – ads will never fuel the music economy.

2.  YouTube Has Us Haggling Over Popcorn Prices, While They Walk Away With All the “Main Event” Revenue

While we’re haggling over paltry ad revenue, we’re diverted from the far greater value that is being generated from our music.  Every month, our music drives billions of users to YouTube’s platform, and the data that Google then gathers from following our fans around the web is where YouTube’s true value lies.  Google and Facebook didn’t get their billion dollar valuations from ad revenue.  YouTube’s valuation largely comes from the mountains of hoarded data collected on the backs of all musicians and creators.  Therefore, part of the value of the YouTube empire should fairly belong to musicians.  Not only should musicians and creators share in the value of data gathered, but they should also have access to the data their creations generate.  Why in the world is it fair for YouTube to keep all of this data as a “trade secret” when it’s generated from our own fans, often through piracy YouTube expressly facilitates?

3. YouTube’s Dirty Secret about Content ID

Content ID is available only to those whom YouTube chooses – and YouTube runs the place like an exclusive country club.  The simple fact is that the vast majority of independent musician-rights-holders are not accepted into Content ID.  I’ve received five GRAMMY® Awards, and even testified about the DMCA next to Google’s counsel, Katherine Oyama, listening to her boast at length about the virtues of Content ID and its ability to block uploads.  But when I came home from testifying in D.C. and applied for Content ID, I was denied.  Content ID is reserved for big record companies with big catalogues, and probably selected independent artists whom YouTube believes will make YouTube a heap of money.  And who even knows to what degree artists or companies with YouTube contracts are allowed to “block” uploads, as those contracts are under NDAs.  Are we seriously to believe they’d permit independent artists to join, only to block their entire catalogue from being uploaded?

In the press, YouTube has fought back against the recent flood of criticism, saying that all rights-holders can access Content ID – that they can get it through “third-party vendors.”  These third party vendors often take between 20% to 50% of the revenue paid by YouTube—after YouTube takes its share.  That means the rights-holder is paying two overpaid gatekeepers.  So yes, it’s available, but at a completely unreasonable premium.  If big record companies are complaining about their bad revenue from YouTube, they should try being an independent musician, paying yet another middleman!

But here’s the most relevant fact that YouTube keeps hiding: BLOCKING UPLOADS THROUGH CONTENT ID IS NOT AVAILABLE THROUGH THIRD PARTIES.  The use they bragged about before Congress – that they imply is available to everyone – does not exist.  The reason is obvious – without ad revenue, there’s zero incentive for the third-party vendor or YouTube to partake.  The third-party vendors would have to charge a fee big enough to pay YouTube and itself to simply block uploads.  What a sick game that would be – paying some third-party company and YouTube to block the pirated uploads YouTube promotes.

Why can’t a rights-holder protect his/her work from illegal exposure on YouTube according to his/her Constitutional right, and then go sell it where he/she wants, for the price he/she chooses to set?  That’s reasonable, right?  Why is that such an unattainable dream for people like me and hundreds of thousands, if not millions, of my colleagues?

If an independent rights-holder wants to keep all their work off of YouTube and keep clear of YouTube’s ad-based, piracy-driven, self-serving, dirty, lawless racket, he or she is screwed.  Is there a single independent artist that YouTube has allowed access to Content ID for the sole purpose of “blocking” uploads?  Katherine Oyama should stop the bragging about Content ID until her company makes it available to “every” rights-holder for blocking.  And certainly, misleading Congress with false claims and self-aggrandizement in a Congressional hearing, and similarly misleading the American public through a calculated propaganda campaign, is in my opinion, deeply unethical.

4. Content ID Legitimizes Piracy – We Shouldn’t Be Complicit

Music creators who succumb to the false appeal of “monetizing” on Content ID, or those whose record company has made that deal for them, have been swayed by YouTube’s line of baloney that illegal uploads are good and aren’t really illegal as long as YouTube offers a pittance from the ads they generate.  Clearly, the infringement orgy YouTube has sponsored for so many years has brought independent musicians and record companies to their knees, as they accept bad deals to monetize the crumbs that are left on the floor from a devoured industry.

Our music industry’s acceptance of the “monetization” tool from Content ID only serves to “legitimize” the piracy that YouTube systematically breeds.  Monetization erases any last vestige of guilty-feeling-illegal-uploaders.  Content ID actually makes them feel good about themselves as they upload to their hearts’ content with zero inquiry.  “Look! I’m making the artists money AND giving them needed exposure, AND I’m offering the public free music at the same time!”

I’ve heard this logic again and again from young people with bloated YouTube channels.  We’ve all fallen into YouTube’s trap:  By making a deal with the devil, right-holders are basically condoning the piracy that has destroyed the music marketplace.  Content ID monetization is steamrolling our Constitutional right to control our own creative works.  We shouldn’t buy into YouTube’s piracy scheme for the few scraps it might offer.

5.  Content ID Offers a Pathetic Deal

With a straight face, YouTube tells you and the media that they give 55% of ad revenue to the rights-holder and only keep 45%.  But they calculate that percentage split after they first reimburse themselves for their own expenses, which they calculate behind their green curtain.  So the 55% figure is not of gross income.  An article by East Bay Ray explains that after YouTube pays itself about 37% for its expenses, rights-holders receive only about 35%.  That’s not a split, that’s a fleecing.

YouTube’s approach reeks of hypocrisy.  Sure, YouTube has expenses.  But has anyone discussed our expenses in making the recording?  Costs should be figured on both sides.  We all agree that when a potter sells a bowl, the price reflects the cost of clay, glaze, the kiln, firing, etc.  When a clothing designer sells a pair of pants, the wholesale price covers the cost of fabric, thread, pattern design, etc.  But YouTube, or rather, Google, the richest company in the world, wants us to accept a business model where the “price” they pay for our music has no rational relationship to the actual costs of making the music.  Who cares about how much they say they pay out.  Their site contains almost the entire world’s library of music, and it’s not even coming close to paying the cost of making that music.  We invest all we have – time, talent, training, technology, and more.  We have the right to expect a reasonable return on that investment.  YouTube is an imperialist tycoon that is finger-flicking less than third world pay at musicians and the music industry for a product that YouTube shouldn’t even have access to in the first place.

6. Who is Clearing all the Rights for Music on Content ID Anyway?

The answer is, probably no one.  When a record company puts out a record, the record company (assuming the artist hasn’t negotiated for ownership) likely owns the copyright to that recording.  And if the record company has struck a Content ID deal with YouTube, chances are they will monetize the record.  But what about the other copyright-holders?  Likely there are songwriters whose works are represented on the record, too.  Often there are several or more collaborators on any given song.  So, what about their right to block uploads?  Where are their royalties?  How are they accounted?  Are they accounted?  Who asked for permission?  Where is the transparency?  This is happening to me, and my answers are: none, nowhere, not, no, no one, and none.  YouTube is a jumbled, colossal rights violations mess that leaves independent rights-holders with the impossible task of doing DMCA takedowns, where YouTube publicly exposes our identities, leaving us open to repercussions from fans or record companies.  The intimidation leads us to do nothing but accept the loss.  There must be millions upon millions of such copyright violations on YouTube.  Maybe that’s why they don’t allow all of us to have access to the Content ID blocking mechanism, because they fear most records would have some rights-holder that won’t allow it to be monetized.  Well, if there was economic incentive, that wouldn’t be the case.  Isn’t that how a free market economy works?

7. YouTube’s Use of Content ID is Un-American

Here are the bigger and broader questions for our industry and government.  Why aren’t musicians and creators allowed to be a part of the American free market, where we set our prices based on the cost of producing our own product?  That’s how manufacturing works in any freedom-loving country.  Why can’t a music creator set the valuation of his/her work in the same way one sells visual art?  Why are the Department of Justice and government, (all of whom are tarnished by their whirling revolving doors with Google – read it!) who are setting most of our prices for us, doing so based on failed ad revenue models from usurious companies?  Why are the DOJ and our government at large intent on propping up a bogus “freemium” model?  And why are they blind to the simple fact that big data companies operate freemium ad-based models all to the greater end of gathering invaluable data to become the biggest player in the AI (artificial intelligence) race?

Why is the survival of theft-enabling, ineffective, ad-based internet businesses more valued than the future of music or livelihoods of musicians?  Why are we collectively not screaming our bloody heads off?  Our songs and music have shaped our culture and the world’s culture for centuries.  Music has brought people and cultures together, serving as the worlds’ ambassador without fail: a voice for freedom, for the oppressed, for change, for comfort, for celebration, and for transformation.

Music creators should be treated like the valuable citizens of this country that we are.  We should be allowed to set our own price at very least!  We aren’t the indentured servants of YouTube, here to make the Google empire rich and powerful.  Given a fighting chance, the market would show how much our fans value our work, as it has for nearly a century.  Taylor Swift and Adele proved exactly that with their quite recent releases that sold millions of good-old fashioned CDs at regular prices.  But when we’re forced to try and create that market in a society with a complicit government that’s allowed copyright theft to run rampant, it’s an almost impossible situation.

When YouTube serves the world mountains of pirated content on a silver platter without having to take a single step to stop the piracy, or Google is allowed to prioritize pirates in their ‘search’ algorithms (even after rights-holders send takedown notices), how could there ever be a true marketplace?

8. Without an Ability to Block Illegal Uploads with Content ID, We’re All Screwed

For the vast majority of us that are unable to protect our music against piracy, we’re stuck playing Whack-A-Mole with an outdated and anemic DMCA takedown process, fighting a tsunami of piracy from a company that does all they can to keep the flood-waters flowing.

So, let us ask ourselves as composers, songwriters, performers, producers, publishers, and record companies: are we willing to be complicit in this whole scheme, cementing piracy as an acceptable norm, all for the measly pocket lint they’re offering us?  I’d sooner fight piracy to the bitter end, and lose, than do that deal with the richest and scariest (“don’t be evil”) company on earth.

9.  YouTube Should Lose Their “Safe Harbor” for Withholding “Standard Technical Measures”

The DMCA’s safe harbor provision requires that companies like YouTube must ensure that “standard technical measures” “are available to any person on reasonable and nondiscriminatory terms” to identify and protect their copyrighted work.  (17 U.S.C. Sec. 512(i).)  YouTube is not allowed to discriminate as to who gets access to tools that have become “standard” in protecting copyright.  If YouTube does discriminate, it is supposed to lose its safe harbor.

It’s right in the DMCA.  This is a point no one has yet pressed.  Content ID has been around and used billions of times to make billions of dollars for years now.  “Audible Magic” is available at a very reasonable price to any company wanting to offer blocking of illegal uploads.  And on Audible Magic, content owners can upload their content for free.  Apple has now created “iTunes Match,” and Facebook is rolling out its own similar fingerprinting technology, so it’s obvious that fingerprinting technology has become a “standard technical measure.”  YouTube can’t deny it’s become the core of their business.  And, if they also tout that it’s widely available through third parties, as they have in numerous publications, that suggests “standard,” too.  Digital fingerprinting is a standard technology that’s now very accessible, it’s just that YouTube stiff-arms most of us who want to use it to block pirated uploads.  And most other sites that allow music uploads from their users, pretend like Audible Magic doesn’t exist, because they don’t want it to exist.  And though the DMCA safe harbor provision requires YouTube (and all internet companies that also allow public uploads), to use the available fingerprinting technology, no one is yet enforcing this application of the law.  It’s high time.

YouTube reserving its copyright protection feature for hand-picked rights-holders, blocking the masses’ ability to fully protect their Constitutional right, even though the technology is right there in YouTube’s dirty fingers, is like denying a rope to a drowning person.  Sounds like clear grounds to take away YouTube’s “safe harbor” protections to me.  It actually feels criminal by my own estimation, when you consider that the violated rights are Constitutional rights.

I wish record companies would step away from their Content ID contracts entirely, and fight a noble fight to enforce this statute in the DMCA that would protect all rights-holders equally, rather than being a complicit partner in the pathetic and dirty Content ID piracy racket.

10.  Content ID Should Be Made “Open Source” for All Internet Platforms

People are starting to wake up to the dangers of allowing a company to amass such power from data and artificial intelligence (AI).   There’s a movement to quickly develop AI technology and algorithms as ‘open source,’ in an effort to keep a few all-powerful hipster tycoons from having AI power over the entire world.  It’s called Open AI, and many seriously talented scientists are flocking to it.  Thank God there are a few people out there scared stiff by the power of those that are controlling AI.

Since Google’s empire is built on the premise that “open” and “free content” is such a grand idea for us little folk, then it’s high-time it puts its money where its mouth is, and make Content ID fingerprinting technology for blocking illegal uploads available to us little folk as “open source” too.  YouTube likes to say how much it has spent developing Content ID, but that’s exactly the point: if you won’t share YOUR works with us for free because you want to recover YOUR investment, why should you expect us to give away our works for free, without having recovered OUR investment?

And YouTube, don’t dictate how we rights-holders can use this now-standard technology.  Let rights-holders use it as they wish – to block or to monetize – no NDA’s, backroom deals, or intimidation.  Let’s make it all free and open, and see what a real marketplace looks like when we actually take measures to control infringement.

YouTube/Google wants the public to believe that certain “copyright” protection somehow harms the internet.  But when their own trillions are made on their own “copyrighted” software, through their own “copyrighted” algorithms and databases, and through their own “trade secret intellectual property,” they suddenly guard it like Fort Knox.  Somehow, YouTube’s and Google’s own copyrights are “good,” but musicians’ copyrights are “bad.”

Here’s the simple truth: protecting copyright doesn’t hurt the internet, it only hurts piracy.  And in the final analysis, Content ID is really just another sneaky way for YouTube to get rich off of piracy, and to try to appear like they’re throwing us a helping hand.  It’s underhanded and deceitful.  We as a music industry shouldn’t negotiate away the true value of our work out of desperation, giving way to the powerful grip of a racketeer (in my opinion) that just wants to keep us quiet.

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Are you a performer, songwriter, composer, producer, or fan, who wants to to help protect the future of music?  Sign on at musicanswers.org.

Read Maria Schneider’s ‘YouTube’ Installment #1, YouTube, Pushers of Piracy

A casual example of how Google profits from lyric piracy and screws songwriters

June 4, 2012 Comments off

I just happened to get a call from a songwriter about an illegal use of the lyrics from his songs.  Thus we found http://www.lyrics007.com registered in–wait for it….China.  Statshow estimates the monthly revenue is $41,000.00, 112,000,000 annual visitors and Google indexes over 600,000 pages.

After a little poking I found that Lyrics007 has just about any song you would want and–I know this will come as a shock–plenty of advertising.  Served by?  Google, of course.  In fact, we saw plenty of ads for Google Play itself as well as YouTube partner promotions.

Little Big Town promotes Google Play and McDonalds as well as some drug ad for birth control:

Not only that, but Google is serving this illegal site ads for the H20 Festival and the Warped Tour to help a pirate site stay in business–oh, and make money for Google, of course.

And you know where the AdChoices “Free Music Download” ad goes to?

And then if Bob Dylan thought that getting a Presidential medal would get him any copyright protection, boy was he wrong:

That’s what you get for wearing sunglasses indoors, Bob.  But look at the bright side, you could become a YouTube partner.  Just click on the ad.

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