Lyor Cohen, YouTube’s global head of music, is the latest YouTube executive to publish an ominous forewarning about the European Union’s controversial Copyright Directive and the effect it will have on the music community. “Let me be clear: we understand and support the intent of Article 13. We need effective ways for copyright holders to protect their content,” Cohen wrote. “But we believe that the current proposal will create severe unintended consequences for the whole industry.
The company wants to weigh in on how the legislation is worded to protect its interests, and those of the larger creator community. Wojcicki said YouTube is committed to working with the industry to find a better way to respect the rights of copyright holders, before the language in the EU legislation is finalized by year-end. Wojcicki urged creators and the wider YouTube community to rally against the legislation on social media, using the hashtag #SaveYourInternet.
YouTube could be about to make a big step toward solving a longtime irritation for creators: It’s about to roll out a tool that will identify videos that are stolen and reposted by someone else — and let the original creator pull the ripoffs down.
After almost a year in beta-testing, YouTube’s new Copyright Match tool is scheduled to launch next week for creators with more than 100,000 subscribers. With the new system, after a user uploads a video — and YouTube verifies it as the first iteration of the video — YouTube will scan other videos uploaded to the service to see if any of them are the same (or very similar).
CISAC, the international confederation of authors’ societies, this week released a study conducted by University of Texas economist Stan Liebowitz on the impact of the safe harbor provisions in the Digital Millennial Copyright Act and their counterparts in the European Union’s E-Commerce Directive on music rights holders.
Although Liebowitz gives it a scholarly gloss, much of his analysis will be familiar to anyone who has followed the debate over the so-called value gap, between what music rights owners earn from their music appearing on YouTube and other user-upload platforms, and what they earn from fully licensed platforms like Spotify and Apple Music: YouTube is given unfair negotiating leverage over rights holders because the protection from liability offered to service providers by the safe harbors mean it is effectively impossible for rights owners to withhold their content from the platform if they don’t like the terms, resulting in below market rates.
But Liebowitz ups the ante by emphasizing two dynamics not often highlighted by other analysts that he claims exacerbate the problem.
The first point — of particular note to RightsTech readers — is Liebowitz’s contention that YouTube could be making its much-touted Content ID system for identifying unlicensed copyrighted works on the platform less effective than it could be because a more effective filter would undermine its leverage with rights owners.
Although copyright owners should have a duty to provide YouTube with information about their copyrighted works before they could claim copyright infringement, once such information were provided, normal copyright law, without the safe harbor, would provide the proper incentives for YouTube to make sure that its Content ID worked better than any alternative…One of the main impediments to this solution, however, is Google’s incentive, which is to make YouTube’s voluntary filtering system only accurate enough to silence critics of its treatment of
copyright holders, as opposed to actually eliminating infringing files…
If Google wants to claim to be going above and beyond the requirements of the DMCA, it is merely necessary for it to provide a Content ID system that works moderately well, since any such system is voluntary. In fact, it would be surprising if Content ID worked as well as Google could make it, since such a Content ID system would weaken YouTube’s bargaining position with the copyright holders with whom it does business. If Content ID worked as Google suggests, meaning almost perfectly, copyright owners who thought they were being underpaid by YouTube would remove their material from YouTube since YouTube’s users would no longer have access to those copyrighted works, as Google claims in the above quote. As we shall soon see, however, the current Content ID system is insufficiently accurate to remove YouTube’s superior bargaining position, which is why YouTube is fighting to keep the safe harbor which it would not need with a more accurate Content ID system.
That comes pretty close to accusing YouTube of bad faith in designing Content ID (without citing any actual evidence of it apart from YouTube’s alleged incentive) — a potentially explosive charge if it were taken up by others as part of the broader value-grab argument.
Liebowtiz’s second (and less tendentious) contribution to the debate is his claim that YouTube’s below-market rates are actually a drag on all market rates, further undercutting compensation to rights owners.
[T]here are two sources of negative impacts of [user-upload content] sites on the revenues to copyright owners. The first, which is a static effect, is the lower direct payment to copyright owners by UUC sites because these sites do not need permission of the copyright owners to provide access to their works and if they get permission they pay below market rates. Second, and of a size that could be larger than the first, is a dynamic effect which is the reduction in revenues from the unfair competition that UUC sites impose on permission based sites, lowering their audiences and revenues, and by necessity, reducing the payments that they make to copyright owners…
Thus, there are additional sources of harm to copyright owners caused by the advantage that safe harbors provide to UUC sites, and these sources of harm are usually ignored in discussions of safe harbors.
That’s an argument that could find favor with Spotify, Apple, and other fully licensed sites that have so far largely stayed out of the debate over the safe harbors.
The full report is available here.
Over the past decade, music synchronization licensing has gone from the occasional icing on the cake for songwriters and publishers to an important new layer of monetization as the use of music in video games, apps, and other new formats has exploded. But new digital platforms are also creating new avenues of exploitation for traditional audio-visual works like movies and TV show, such as placing clips on YouTube and other user-upload sites, which often also include the use of synchronized music.
This blog post originally appeared on Concurrent Media.
The rise of subscription streaming services, in both the music and video industries, has given the lie to the old complaint that consumers won’t pay for content online. But to many in the music industry, to say nothing of streaming investors, too many of them still don’t.
Ad-supported free streaming services remain the bête noire of the record labels and music publishers. They rail against YouTube, even as they’re making deals with it, and have fought to restrict the copyright safe harbors that allow YouTube to profit from music posted without license by users. They’ve maintained pressure on Spotify to shift more of its free users to its paid subscription tier, a tune now echoed by potential investors as Spotify eyes an IPO or public listing of its shares, and have begun to restrict when new releases are made available on the service’s free tier.
Pandora, the largest free streaming platform after YouTube, felt compelled to roll out a new subscription tier as it tries to woo investors and potential suitors.
To hear many in the music business tell it, the industry would be better off if free streaming went away altogether.
The video streaming business, however, has lately been moving in the opposite direction, at least on certain fronts. While over-the-top subscription streaming services continue to proliferate, streaming platforms continue to invest in free, ad-supported content.
Ad-supported streaming service Tubi TV this week announced a new, $20 million funding round led by Jump Capital, bringing its total funding since in launched in 2014 to $34 million. While Tubi is targeting the same cord-cutting consumers being catered to by the likes of Hulu, Netflix, CBS All Access and HBO Now, founder and CEO Farhad Massoudi thinks there’s a limit to the amount of paid content consumers will support.
“I think the market is delusional if they think consumers are willing to pay and subscribe to all these apps,” Massoudi told the Wall Street Journal. “In the next year or so these apps are going to disappear, or they’ll see there’s no clear path to significant scale.”
Tubi counts Lionsgate, MGM, Paramount and Starz among its 200 content providers, according to the Journal, and boasts a library of 50,000 movie and TV titles — an indication that TV rights owners are still open to distributing content via free platforms.
Little, if any of the content on Tubi TV is in its first release window, of course, and in many cases has been thoroughly monetized already. So the circumstances are not entirely comparable to the music business. But free, ad-supported video streaming is nonetheless attracting a growing amount of direct and indirect investment in new production.
Facebook, which has made ad-supported video streaming central to its growth strategy, is preparing to debut a slate of original series in June, ranging from mobile-friendly 5-10 minute fare up to more traditional, 30-minute episodes suitable for watching on TV.
Word of Facebook’s plans comes as YouTube is developing its own slate of 40 new original series intended primarily for its free, ad-supported platform. In a recent interview with Adweek, YouTube chief business officer Robert Kyncl made clear the primary role that ad-supported content plays in YouTube’s evolving long-form video strategy:
For many years, [marketers] have been asking me, “When you are going to do big original shows?” Of course, in their minds they mean free [programming] with ads. As you know, two years ago, we started a team to focus on originals, and we created YouTube Red with no ads. At the beginning of last year, we started to think about the fact that advertising is our core business. And big brands and big agencies are our biggest partners. This is something they have been asking for for a very long time, and we should deliver on that…
Secondly, when I started to look at the statistics, they showed a share shift from advertising-supported shows to ad-free shows, which started to increase. I just think that’s a trend that’s not favorable to our biggest partners. We are the biggest video platform in the world. We should play a role in changing that.
Even traditional media companies are eyeing investment in original, ad-supported streaming content, as the list of TV networks and studios lining up to create TV-like content for Snapchat attests.
The reasons for the differences in attitudes toward free, ad-supported channels are both historical and structural. Historically, the music industry’s primary ad-supported business — terrestrial broadcasting — was conducted under compulsory license by broadcasters. Rights owners earned only royalties based on use, under a formula set by the government, or, in the case of sound recording owners, nothing at all.
In contrast, advertising was for many decades the exclusive means of monetization for TV content and the industry’s corporate structure was built around that paradigm. Critically, TV rights owners controlled and conducted the majority of the advertising sales, claiming 100 percent of the revenue it generated.
In the streaming era, music rights owners have been able to tie their earnings more directly to the total advertising revenue pie, but they still don’t control ad loads or prices, and their slice of the pie is still calculated in part by the government. Video rights owners, in contrast, have been able to carry over their direct control of ad sales into the streaming era.
So, could the music business ever accommodate itself to ad-supported business models as the video industry has done? Not without major copyright and structural reforms. But the video industry’s experience suggests that paid and free channels are not inherently incompatible.
Mike Pusateri is Founder and CEO of BentPixels
It’s an open secret that advertisers, content creators, and the ecosystem around them have been waiting eagerly for the true potential of Facebook Video to unfold. Naturally, the recent announcement that Facebook is moving forward with video monetization at increasing scale is a big moment for that constituency.
My team is no different. We’ve been engaged in digital rights management of video content for over five years: making claims, monetizing, and issuing takedowns on behalf of brands and leading content creators using YouTube’s Content ID. We’ve watched the evolution of Content ID, over time, into the pre-eminent anti-piracy system on any video platform. Keep in mind that YouTube has had years to fine-tune this system: time and iterations and a large team of excellent engineers. The changes that have made the biggest difference, mind you, are not solely technology tweaks: they’re policy refinements, changes to process and to user experience. By contrast, Facebook is at a disadvantage in that it didn’t begin life as a video platform.
One thing’s for sure: both YouTube and Facebook will always have to guard against pirates who are creative about new ways to beat the system. Because of our experience with video rights management, we have a few suggestions for Facebook as it rolls out what CEO Mark Zuckerberg has acknowledged is a video-centric future.
Our team has put together a comparison of Facebook’s Rights Manager and YouTube’s Content ID. Here are four factors we think should be addressed:
Refine the Rights Manager User Interface: We’d like to see Facebook prioritize developing a more sophisticated user interface for uploading video, as well as for checking stats and analytics. Users will benefit from increased information about matches and claims, for example which percentage of a video is a match and whether other claims have been placed on that video or a portion of the video. Setting up a strong system of reference files as matchable assets, like Content ID, and allowing the user to set up customized policies around matches will go far to improve the claiming experience.
In addition, copyright holders should have the ability to register a DRM provider as an approved rights manager (no pun intended) for their content or brand. The provider can then act on behalf of that client, or multiple clients, as a third-party content owner. There is frankly too much ripped content out there for an individual rights holder with popular content to track efficiently.
Create a Strike System and Robust Appeals Process: Currently, the takedown process is easier in Rights Manager than Content ID, because you can execute claims in bulk. Advantage: Facebook. However, there is no obvious strike system in place for repeat offenders with serious consequences like there is on YouTube. Nor is there an appeal process if an error has occurred.
Unfortunately, it’s possible to get locked out of the Rights Manager uploading system entirely, with no clear recourse, if the system misunderstands your rights to the content or believes it conflicts with another user’s claims. The potential punishment — being indefinitely barred from uploading content without a human override option — poses major difficulties for individual creators.
Crowdsource Copyright Policing: While automation is crucial for the scalability of a system like Rights Manager, having a crowd-sourced enforcement measure would allow Facebook to gather more data on how videos are sidestepping the content protection system. This is a great way to figure out which adjustments must be made to combat the latest in pirate strategy. YouTube has adopted a crowdsourcing system for its own purposes, but much later in the Content ID life cycle.
While Facebook is a younger video platform, it can take greater advantage of its built-in social tools to deputize power users and prevent the spread of freebooting. YouTube is working on ways to incentivize this process, but Facebook has built-in opportunities with its social network: potentially it could offer various advertising credits and temporary boosts to power user pages, allowing creators (er, concerned citizens) to actually benefit from following and enforcing the rules on the platform.
Embrace Monetization: Rights Manager currently has flexibility in determining what types of videos you would like to pursue or block over others, and that’s a good thing. Keep in mind the purpose of such a system is not rights management alone, but a way of fairly distributing funds generated by uploads to their rightful owner(s).
There are of course major content brands, individual creators, and perhaps Facebook itself (through its upcoming original content initiative) that view the platform as the next frontier for generating revenue online. The more creators and entities that can monetize content, the better to round out the ecosystem. Facebook seems determined to add video monetization opportunities gradually, as of this writing to page owners using live video, influencers, and publishers meeting certain criteria (a few involving on-demand rather than live video).
Mid-roll advertising makes total sense for certain types of videos — especially livestreaming, which is a priority according to the latest announcement — however, until it’s broadened this will restrict the amount that creators can ultimately generate on the platform. We’d like to see diversified monetization in time. It won’t be easy. The typical Facebook user has been spoiled by the lack of non-native advertising seen on Facebook, and complaining about Facebook changes can be a popular sport for even the most devoted users.
Tweak the Serving Mechanism: For most channels currently on YouTube, knowing how to reach their subscribers is paramount. YouTube’s algorithm, which has been so successful at building watch time on the platform (over a billion hours a day, at last count), can also make or break creators. You don’t always know if your subscribed audience will actually see the videos that you post; similarly, creators don’t necessarily know how the Facebook News Feed algorithm will affect them.
Facebook has certainly indicated that the new Video tab is a key portal for promoting long-form content, with shorter video remaining on the News Feed. Hopefully in this way, Facebook will promote video from individuals as much as possible. When creators post original content, it’s not the same as paying to run advertising and ideally won’t be prioritized in the same fashion.
Facebook is on the verge of hosting an incredible array of video content, and boasts an engaged (even captive) audience ready to consume. It’s a really exciting time, and Rights Manager has the underpinnings of a strong solution. We can’t wait to see Facebook Video, and the mechanisms for claiming and monetizing it, mature and provide more value for creators, advertisers, and brands.
Facebook last week snared long-time music industry attorney Tamara Hrivnak to head up its global music strategy and business development, luring her away from YouTube, where she had served as director of music partnerships.
The hire, which comes just weeks after reports surfaced that Facebook is moving forward with the development of its Rights Manager tool for identifying infringing content on its platform and had begun preliminary discussions with the major record labels and music publishers about securing licenses to host music on the site, further raised expectations that the giant social media network is gearing up for a major push in music.
“Music is important and it matters – it connects us and binds us to times, places, feelings and friends,” Hrivnak said in a statement announcing her hire. “My career has been dedicated to growing opportunities for music in the digital landscape.”
That’s music to the ears of rights owners and distributors, who see in Facebook both a serious and growing problem of copyright infringement, but also a potentially major opportunity.
At a RightsTech panel on user-generated content platforms during the Digital Entertainment World conference last week, speakers representing multichannel networks, rights-management providers, and distributors were unanimous in identifying Facebook’s apparent moves into content licensing as the most important development to watch in the UGC space over the next year.
Ever since Facebook moved video front and center in users’ news feed it has become a popular destination for music videos, particularly user-created covers and lip-dubs of popular songs. None of the current is currently licensed, however, and so generates no revenue for the original rights owners.
The site has increasingly come under criticism from rights owners for failing to adequately address the growing amount of infringing content it hosts. Facebook also generates huge numbers of share-driven views of licensed content scraped from YouTube and other outlets without compensation to rights owners.
“With views in the millions, it’s time for Facebook to answer songwriters’ friend request and properly license their platform,” National Music Publishers Association president David Isrealite wrote in a Billboard op-ed in October. “Otherwise, it may find itself de-friended by the music industry.”
The reports that Facebook is developing a more robust version of Rights Manager, and the hiring of Hrivak were sign as responses, at least in part, to such criticism.
But Isrealite’s op-ed also hinted, perhaps unintentionally, at the potential scale of the opportunity Facebook presents to rights owners if currently infringing content can be brought within the purview of licenses.
“[W]hile we don’t know the full extent of what is posted, we do know that engagement and viewership on Facebook often outpaces other social media video platforms.,” Isrealite wrote. “In fact, in a recent study of the popularity of copies of Adele’s music videos, of the 60,055 copies of ‘Hello’ found that while ‘Facebook had only 64 percent of the number of copies published to YouTube, Facebook still garnered over two times more video views than YouTube. On average, Facebook racked up 73,083 views per video, whereas each YouTube amassed an average of 23,095 views per video.'”
Currently the most widely used streaming platform for music, YouTube has emerged as the bête noire of music rights owners over what many view as paltry royalty payouts relative to the volume of usage it attracts. Apart from complaining about it, however, rights owners have so far had little practical impact on YouTube’s policies up to now, largely because they have lacked the leverage of an alternative.
Few other platforms have the scale to mount a serious challenge to YouTube. But one of the few that does is Facebook. If Facebook were to strike more artist-friendly deals with the record labels and publishers the data cited by Isrealite suggests it could emerge as a potent counterweight to YouTube — the main reason the DEW panelists cited for their (cautious) optimism.
Speaking to analysts during an earnings call last week, Facebook CEO Mark Zuckerberg offered rights owners still more reason for optimism.
“We’re focusing more on shorter-form content to start,” Zuckerberg said. “There is the type of content that people will produce socially for friends. There’s promotional content that businesses and celebrities and folks will produce. But there’s also a whole class of premium content. The creators need to get paid a good amount in order to support the creation of that content, and we need to be able to support that with a business model, which we’re working on through ads to fund that.”
Much will depend on the development of the revamped Rights Manager. While reportedly modeled on YouTube’s Content ID, few details of how it will work have surfaced to date.
For all of the complaints directed at YouTube over its payouts to artists, Google spent years and (it claims) more than $60 million to develop Content ID, which even YouTube’s critics acknowledge has evolved into a sophisticated and robust piece of engineering.
Facebook certainly has both the financial and engineering resources to throw at the problem. But development still takes time, as will building up the vast library of reference files Content ID uses to match against posted content.
Without an effective content recognition system even the most favorable license agreements are bound to prove disappointing to rights owners. But if anyone can change the marketplace dynamics of ad-supported streaming it’s Facebook.
Facebook is developing a system to automatically identify copyrighted works posted to its massive social network similar to YouTube’s Content ID system, according to a report in the Financial Times (here’s Billboard’s rewrite of the paywalled FT story).
Word of the move comes just weeks after an op-ed by National Music Publishers Association head David Isrealite appeared in Billboard calling on Facebook to address a growing infringement problem on the network, particularly with respect to user-posted videos featuring cover versions of songs that were never properly licensed from the publisher.
“In a recent snapshot search of 33 of today’s top songs, NMPA identified 887 videos using those songs with over 619 million views, which amounts to an average of nearly 700,000 views per video,” Isrealite wrote. “In reality, the scope of the problem is likely much greater because, due to privacy settings on Facebook, it’s almost impossible to gauge the true scale.”
Up to now, Facebook has generally fallen back on the DMCA safe harbor to deal with copyrighted work posted without a license to its platform, removing infringing material when requested by a rights owner but not actively policing copyrighted content uploaded to its platform. According to Billboard, however, Facebook has begun discussions with the major record companies about licensing content directly, although those talks are apparently in the early stages.
Facebook actually rolled out a tool called Rights Manager last year to help rights owners keep their copyrighted works off the network, but that system was mainly designed to address the problem of video “freebooting,” in which Facebook users take videos from YouTube and other sources and post them to their walls, often generating millions of views without compensation to the rights owner.
According to this week’s published reports, the new system is aimed more at policing music use on the platform, and seems driven at least in part by Facebook’s desire to avoid the sort of sustained, naming-and-shaming campaign the music industry has mounted against YouTube over the so-called value gap.
What’s not clear from the published reports is what Facebook has in mind for what to do about the unlicensed content the new system identifies. But here’s hoping it doesn’t follow YouTube’s example too slavishly.
YouTube’s Content ID essentially offers rights owners a binary choice: take the content down, or leave it up and let YouTube run ads against it on terms set by YouTube. What YouTube doesn’t really offer rights owners is a means to effectively engage with users who are viewing or posting the content.
Facebook has an opportunity to offer rights owners a much richer environment to engage with music fans. If someone has gone to the trouble of covering your song and making a video of it, they’re probably a fan. And when they post it publicly on their Facebook wall you know exactly who they are. Even if the user shares the content only with his or her friends, Facebook knows who they are and it knows a lot about who their friends and other connections are.
More important, Facebook has the means to allow artists to engage directly with those fans and potential fans. Such engagement may have limited appeal to songwriters and publishers, but it could prove to be a boon to recording artists and labels by literally putting a face on their fans.
Even for songwriters and publishers, the type and volume of data Facebook’s new system could potentially yield on how, where, and how often their content is being consumed could be valuable.
In short, Facebook has a chance to bridge the value gap by offering rights owners more choices than simply take-down or hand-me-down monetization.
Now that it has a paid subscription option like Spotify and more recent entrants like Apple Music and TIDAL do, it’s logical to assume YouTube will begin to generate more revenue for the music industry, based on the charts and figures cited above. YouTube’s chief business officer believes so, too; in an interview with the Financial Times, Robert Kyncl mentions YouTube Red as a new source of revenue for disgruntled rights holders who feel like they haven’t received a fair shake.
But in talking to individuals inside the music industry, including those who work on behalf of major labels and independents alike, their outlook for YouTube Red is far less optimistic.