I’m pleased to have been asked by the brilliant Gigi Johnson to reprise our SXSW panel at the UCLA Herb Alpert School of Music Center for Music Innovation on July 20 from 6-7:30 pm. Gigi will moderate and has invited Sam Kling from SESAC and Ted Cohen from TAG to join.
As I noted in a recent Huffington Post blog, major labels are in the middle of renegotiations with YouTube, Google’s subsidiary and the world’s dominant video search engine. These deals are relatively short term and are renegotiated every few years.
What’s different this time is that a growing number of artists and songwriters at the grassroots and established levels are asking a simple question: How can the labels conclude any negotiation with YouTube that doesn’t address the problems with YouTube’s legacy “DMCA license” business? Would this not trigger an artist revolt if their demands are not met?
You may say you’ve never heard the term “DMCA license”. It’s a term that has come to describe a bargaining position that plays a desire to push an extreme interpretation by a music user of the “notice and takedown” rules that twists the statute into an unrecognizable shape–so the users have neither a DMCA compliant service nor a license. The DMCA license is predicated on the user having an essentially unlimited litigation budget that allows the user to strong arm an entire industry. There is only one company in this category at the moment–Google–but others like Vimeo and Facebook are not far behind.
Will Negotiations Fail?
There are at least three key points to be addressed in any new deal with YouTube: updating YouTube’s legacy revenue share based royalty, marketing restrictions (such as on selling artist names as keywords and the use of recordings in UGC not approved by artists), but most importantly Google’s aggressive DMCA practices in both search and on YouTube.
For the first time, artists are crossing Google’s DMCA position in search with YouTube’s desire to have the cover of licenses on YouTube.
As of this writing, Google is rumored to be holding the line in their renegotiations regardless of what the artists want. When you consider the issues we covered in YouTube’s Messaging Problem, it’s not surprising that the brittle true believers in Google’s policy shop make compromise on Google’s legacy business an impossibility (like long-time true believer Fred Von Lohmann, chief architect of the Electronic Frontier Foundation’s legal strategy to destroy artists livelihood).
This leads me to believe that when confronted with these choices, the negotiations with YouTube will fail. This is unfortunate, because what really should be happening is that YouTube should agree to take the DMCA safe harbor off the table if they are getting a license. It seems not only logically inconsistent to have both a real license and a faux DMCA license, trying to combine the two comes up with an unworkable and frustrating structure.
If YouTube wants the benefits of a license with copyright owners, they should not be surprised that artists expect them to abandon the safe harbor for those licensed recordings, adopt a private arbitration process to resolve disputes, and respect the marketing restrictions that artists reasonably expect.
Where Do We Go if Negotiations Fail?
There’s no reason that official videos could no longer be available on Vevo that is partly owned by YouTube–although expect YouTube to violate their fiduciary duties as a stockholder if major label partners withdraw from YouTube.
The most likely outcome of getting out of the YouTube deals will be a renewed emphasis on alternative video sites like Apple and Spotify. There’s actually no reason not to start working more closely with those two services right away which will address the artist displeasure with Google.
Plus, as I spun out a bit more on the Huffington Post, YouTube has the great benefit of label marketing budgets spent to drive traffic to YouTube (as well as marketing resources from companies in all other copyright categories). If those budgets are redeployed to drive traffic away from litigious companies that insult artists with aggressive and unreasonable DMCA positions, the industry will be better prepared for the inevitable “step away” from YouTube.
I think that labels need to be coming to grips with a succession plan as it seems increasingly unlikely that Google will stop acting on the advice of the “policy people” who have never sold a record in their lives.
If the labels fail to satisfy their artists, there will no doubt be an artist revolt.
Since the FTC closed its investigation of Google’s business practices, researchers have found that Google ties its content to its search results in ways that harm the public—one of the very practices that FTC had scrutinized and decided posed no problems.
A Guest Post By Alan Graham of OCL. Let’s get real. There’s a lot of talk about data and transparency and blockchain these days when it comes to the music industry. This will solve everything! However, there are issues no one seems to want to discuss that also need immediate attention. So let’s open up and take a very bitter […]
In this guest post, UK technologist Alan Graham offers some penetrating insights into what the much ballyhooed blockchain will and won’t do, and some technologies that are not so far over the horizon that we should all be thinking about how to bring into a safe and sane environment.
Copyright Alliance has a useful FAQ that collects a number of questions and answers about copyright. Works created after March 1, 1989 do not require a copyright notice in order to be protected under U.S. copyright law. However, there are a number of benefits to including a copyright notice, such as: It puts potential users […]
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A study from long-time consumer researcher Russ Crupnick suggests tens of millions of consumers want better sound quality from streaming and will pay more for it.