YouTube and Warner Music Group Corp. will announce a deal Monday that will put thousands of Warner music videos on the video sharing site and allow user created videos to legally use Warner owned music. YouTube is reported to have created technology that will automatically detect when copyrighted music is used in videos, give Warner the right to accept or reject those videos and will calculate the royalty fees Warner is owed. Financial details haven’t been disclosed yet, but may include a cut of advertising revenue in exchange for licensing rights. It’s also unclear who will pay the royalty fees; that payment may come out of the advertising revenue or it may be demanded of the individual users who have put Warner music in their videos. That could get interesting. Warner’s last experiment on YouTube, the Paris Hilton channel – was widely seen as a failure.
Update: YouTube has made an official post about the deal and has said that use of the copyrighted music from Warner will be free to users.
This is big news, as the legal dilemma of copyrighted content has been the primary barrier to YouTube’s possible acquisition and has presumably cost the company in possible advertising revenues. If a similar deal can be made with other record labels, the landscape of user generated content could be changed radically. The Warner deal stands in major opposition with the position of Universal, whose CEO Doug Morris said last week that YouTube and MySpace owed the label millions. Morris indicated that a legal challenge might be forthcoming.
While it’s very exciting that a new model is being created, the caveat that Warner will have effective veto power over videos using their music is particularly interesting. In effect it’s just a technological realization of the long standing policy reality – YouTube has willingly pulled copyrighted content on request for some time. While DRM has been understood as a prerequisite for online distribution of major label content, this announcement seems to indicate a switch in responsibilities. Instead of the distributor locking down the content by default, use is open by default and can be closed at the rights holder’s discretion. It’s a very real recognition of the promotional power of copyrighted content being reused in original art. I think it’s great news.
We first covered technology capable of detecting copyrighted content in the case of video distributer Guba, who has developed a system code named “Johnny” that detects copyrighted video. We also wrote about online social network Faces (disclosure: now a sponsor) that counts all music played against an internet radio license. I hope that tomorrow’s Warner/YouTube announcement is a sign of times to come; when technology like this is used to protect rights holders’ baseline interests but in the context of widespread free use.
Last time I looked, just about every music video I wanted was already there!!! I guess this is called progress.
I’ll be more interested to hear about the revenue that is generated from this. I cannot see Warner putting down their guns in terms of royalties for copyrighted content, and whether or not a few ads is going to be able to cover not only the royalty costs but also the added bandwidth of having their content is something that is going to be seen.
Furthermore, I dont know how well its going to sit with users that upload videos with copyright content and then pops up a message – “Thanks for you Video. You have copyrighted content and will have to pay us $1,000 in royalities – ps dont think you can run, we know where you live and your mums name”
It’ll be exciting to see how it pans out.
Great. Now somebody build a tool that will convert flash videos on the internet to something I can store locally and play in iTunes and on my iPod.
This is a big deal, not to be underestimated. Warner has realized that the entertainment industry has fundamentally changed and that consumers get value out of being able to either watch their content in a new format (streaming on their PC) or reuse their content (especially the content that wasn’t great to begin with).
Rather than criminalizing and prohibiting these largely benign activities (which is impossible from a practical standpoint – viz, music) Warner has legitimized them. There can be no doubt that Warner will be better served by facilitating its customers’ ability to use its products as they desire than it would have been had it stuck to its legal guns and remained adversarial to, well, everybody.
Mike: here ya go.
That’s a pretty neat extension, M. Abundo. Thank you for the link.
The war is over without a shot fired — that is, the “predicted” war between YouTube and record companies. Good business sense and the principle of “fair use” are the winners.
Those who claimed that YouTube would go the way the old Napster went were near-sighted. Music industry execs are not stupid (most of them anyway); they know that an old music video by the likes of Talking Heads will not generate a red cent for them if it sits in the video vault gathering dust, but if Joe Schmo who is a David Byrne fan uploads a copy he recorded on the good old VHS machine and it starts to generate ad revenue, then everybody is happy.
A note to Doug Morris, CEO of Universal: if you want to recover the “millions” you said YouTube and MySpace owe you, my advice for you is to follow Warner. If you choose the failed RIAA way, in which they sued some 11-year-old who downloaded 2,000 songs and got her grandma to pay $2,000 to settle, you’d get exactly that — $2,000 and a lot of bad press.
“This is big news, as the legal dilemma of copyrighted content has been the primary barrier to YouTube’s possible acquisition”
I think this is a bit near-sighted too. One should not underestimate what is happening with video on the net. If Youtube plays their cards right, they will be the acquirer, not the ones being acquired. They will buy MTV in a few years if they do not screw up… Youtube is not flickr or del.icio.us.
Okay,
Quite a bit of clarification is needed here. As is typical of the Web 2.0 “industry”, there’s very little understanding of the mechanics of artist royalty distribution.
The AP article provides very little detail, and from what little fact I can glean from the article, it looks like Warner Music is holding all the sweet cards in this hand. It’s a throw away for them, just like the Paris Hilton “experiment”.
@ sundroid
Clearly, you’ve never had to report artist royalties, or provide distribution of said royalties
. The value of the royalty distribution isn’t really important for vintage audio/video (using your example of the Talking Heads). The simple fact is, that the royalties must be monitored/distributed, and that’s a non-trivial administrative cost that doesn’t change over time.. whether it’s Beyoncé’s latest hit, or vintage Talking Heads.
As for any royalty tracking software developed at YouTube, I’d take that with a grain of salt (nor would I trust it).
An interesting development to be sure, but as I’m a 20 year veteran of the media licensing industry, I’d have to say that the “war” is far from over.
Cheers.
Mikes (#3 & #5) -
Try Replay A/V to capture videos, and Replay Converter to convert them t iPod.
http://www.repl...y-converter.com
http://www.replay-av.com
Enjoy!
Bill Dettering
Applian Technologies Inc.
http://www.applian.com
It’s progress. I miss being able to score my tunes with real songs.
BUT (and a big butt): before you get too excited, recognize that it will restrict the uptake of your videos even if it’s allowed on YouTube. First, who would buy your content knowing that Warner Brothers has restrictions on it? Second, will other sites (like Revver and Metacafe) have the same policy?
YouTube is a low quality format, and is basically a teaser for the real thing. In short, YouTube movies are similar to Apple Trailers, they promote the product… which is good news for distributors.
The fact that Warner would also get advertising for free is just a bonus.
well i may disagree that low quality videos can be considered only a trailer
I think recent developments with YouTube and mySpace, show how big money looking for returns, may turn authentic and creative communities in corporate walled gardens.
Here are my thoughts:
http://blog.sta...18/2337219.html
So who gets the money if someone uses Ice Ice Baby?? Vanilla Ice or Queen? Seriously though, a lot of songs sound pretty darn close to the same these days. How good is Youtubes software as detecting these?
“allow user created videos to legally use Warner owned music.” Is that right? So that would take care of synch rights from publishers?
If someone uses Ice Ice Baby it would be the music publishers of both songs (Ice Ice and Under Pressure). I doubt Vanilla Ice had any creative/artistic input to that song, so he gets $0.
in addition to Mike Abundo’s response to mike Arrington ,
Guba has buttons allowing one to DL to PSP and ipod. I have yet to use it, but KeepVid, from what I can see, is almost identical to Video Downloader (at least in appearance). Also have not used,
Download Embedded is firefox ext.
Thanks to “hello” for adding some intelligence to the conversation.
It’s amazing how people fail to read critically. It seems like a throw away to me as well, however this could be a step in the right direction for YouTube. But claiming that this solves all their problems and that the “war is over without a shot fired” is very naive. There are quite a few other parties out there, like Universal, that might sue instead.
In the big picture, this is a very small deal and it really puts YouTube in a position where it needs to figure out how to effectively monetize. This is being reported as a revenue sharing agreement, so what happens if YouTube doesn’t generate enough revenues to satisfy Warner? YouTube currently has massive bandwidth costs and now some revenues will need to be shared. So it still remains to be seen if they can develop a sustainable (profitable) business model.
“Youtube plays their cards right, they will be the acquirer, not the ones being acquired. They will buy MTV in a few years if they do not screw up…”
MTV is owned by Viacom and is their crown jewel. Want to take a gander at how much it would cost to get Viacom to sell MTV? From the Wall Street Journal last month:
“MTV Networks accounted for more than 70 percent of Viacom’s $9.6 billion in annual revenue last year and nearly all its $2.4 billion operating profit.”
Making the bold prediction that YouTube, which has not yet found a way to earn a cent in profit, is going to buy MTV, with over $2 billion in annual PROFIT, in a “few years” is an insane claim to make at this point.
If conventional media were to take advantage of new media, then they would be more success.
This is both good and bad for YouTube, but it’s clearly what they need to do in order to wither get more VC financing or be acquired. I do feel that Warner was holding the cards in these negotiations and this is yet another experiment for them. I wonder how long the agreement will be in effect, because if – at the end of the day – they don’t get out of the partnership what they want, they’ll move on.
What YouTube gets:
- Alignment with a powerhouse
- One less lawsuit threat
What YouTube looses:
- Revenue. It’s anybody’s quess what % goes to Warner. Maybe a 1/3rd? This is particularly tough to swallow since YouTube has a lot of expensive operational costs.
But I think this is progress in the right overall direction. I wonder how Universal will response. However, remember this is just Music Rights Holders, YouTube still is skirting with trouble with video content owners.
Addendum: Thinking a bit more, this could get interesting, because basically YouTube is saying “we can identify copyrighted material” through a new automated technology platform. So basically, this means that they will have to monitor *all* content now and not just Warner Music Group content. They clearly would not be able to get away with just policing WMG because they have partnership in place.
here ya go mike – a tool to download from most video sites. havent tried this out in awhile but it used to work pretty well. http://javimoya.../youtube_en.php
What a great idea. Will it make money? Probably not. See ifilm.com for reference.
The question remains, will YouTube be able to strike deals with all the majors or will we see a landscape that equates; YouTube=WEA, Grouper=Sony/BMG, ifilm=Uni/EMI content?
Secondarily, will the $.005 to $.008 royalty rates the majors charge PER VIEW be off set by advertising pre-roll? YouTube claims not. Banner ad CPM’s certainly aren’t enough to break even. Maybe WEA is waiving those fees in exchange for some “marketing assitance”? Or can we expect a full blown retail enviroment to compete with itunes for music video downloads to pop up in Q4?
Major label music videos killed the…..
#16 Drama 2.0 and #9 hello,
I must confess, in a devilish moment, I wish Mr. Doug Morris and his Universal legal team would go ahead and sue YouTube and MySpace, instead of just bluffing. These copyright infringement lawsuits, as smelly as they are, do help to clarify a few things.
If the lawyers at Universal decided to take on MySpace (owned by News Corp) and YouTube (backed by Sequoia Capital), they would have to deal with the legal warriors hired by Rupert Murdoch who, I understand, is no weepy teen. So, the lawsuit, if launched, would probably go all the way to the U. S. Supreme Court.
Now, I’d love to see the wisest legal minds of the land, namely the Supreme Court Justices, determine whether a high school kid who celebrated his basketball team’s victory by making a video and using Queen’s “We Are the Champions” as soundtrack and uploading it to YouTube is committing an act of copyright infringement or simply exercising his free speech rights as protected by the First Amendment to the U. S. Constitution.
Michael Arrington -September 17th, 2006 at 10:46 pm
“Great. Now somebody build a tool that will convert flash videos on the internet to something I can store locally and play in iTunes and on my iPod.”
iTube might be what you were looking for:
http://www.benj...s.com/itube.php
I haven’t used it yet though, so I can’t vouch for it.
To convert flash files and upload them easily on a Mac, use iSquint => http://www.isquint.org
Which entity(s) is liable if an issue comes up with copyright infringement when embedding YouTube videos on other websites. YouTube? The user who uploaded video to YouTube? The external site containing the embedded YouTube video? The user that embedded the YouTube video on the external site?
I’d be interested in hearing some opinions on this.
Hmm…
I think youtubes possibility for profit (as opposed to just nullifying their losses) could start with their “director” style accounts. Currently there is very little to differentiate these from normal accounts.
Why not allow the directors an option of an enhanced channel which is more customisable and allows them to put higher resolution versions of their content on the web (interlaced crap quality junk pisses me off – at least when i am thinking that the original was better quality)… After all this is supposed to be original content.
Why not allow the archivers some more space, and longer durations for videos?
I feel like everyone goes to ads when they want to make some money online… But I dunno, i think there is an option for them here… If they wanted to provide a more sophisticated service then perhaps there would be situations where more sophisticated content providers would be able to use it in a more effective manner and maybe even bolster that advertising revenue they seem to be looking so desparately for…
For example, a lot of TV programs over here in australia on one particular channel like to put episodes on the net… Youtube should speak to that terrestrial TV station and say “hey! look we’ve got an audience for you… Put the videos here if you like. Or even just links to them on your site. Your choice” At the start i’d imagine it would be a difficult chore but It could be done…. Myspace has an awful lot of bands on it… Why not youtube with an awful lot of TV shows?…
But that would be just really tweaking what they’ve already got. If they wanted to really make some cash I feel like they need to be the one to integrate some of the stuff thats everywhere. Why does no one offer me an application like flock (web based or otherwise) that actually has decent integration with more sites? I’d love for someone to delouse myspace for me and let me push photos from flickr and videos from youtube around with more ease than i currently do…
On the top list of things YouTube needs to do to survive, this is not high on the list. Come visit http://www.will...ideoforfood.com to enter the “YouTube Bust Date” contest. Predict the day the bubble burst and win a t-shirt.
a long way
hmm.. you think this is gonna work??
Great article.
i understand youtube owes some money.but now people who upload vids to youtube are going to and are starting to suffer now. now all vids that are uploaded over half of them use songs by a warner producer and now there vid wont upload.so warner gets wat they want while youtube is falling …slowly but surely . dis-mornin i uploaded a vid and it kept getting rejected and i even used different songs all 12 times and all of them happen to be warner. so i say youtube is going to be destroyed and then people who make videos there will all be bored forever and they will probably end up doin drugs *hear loud sniff* and die. comment to me on youtube if u disaggree.my username is: uchihaforever1
Well then what happens with Second Life and the video captures there? I mean Linden Labs allows music streams on every parcel of land and when you capture video there you capture most times the music along with it. I guess the virtual world is going silent too?
Seriously, this thing is stupid, They block my MUSIC video in which i made the video, CREDITED the music to the ARTIST AND RECORD COMPANY, and yet, i look it up and there’s videos that have been up for months with just the song and no video, no credit given anywhere. it’s just flat-out bullsh*t
This is seriously lame, if they’re going to put up a ban on licensed products, they might as well ban everyone who has that song/video. There’s a lot of inconsistancies across the board here on Youtube, some videos getting banned while others don’t, even if they have the same audio file.
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Hello, WMG makes no sense. Because they claim to license music to YouTube, but took one of them off. It was Good Times open and close music. This is to WMG. You make no sense. You claim to license music to YouTube, but take it off. Well you shouldn’t have license for YouTube to put it up if you are going to take it down. Sometimes I wondered have you lost it.
i am 26
Absolute Shit just about sums up what WMG are doing. They’ve taken off about 12 of my drum cover videos because i used songs which they didn’t want me to in the background but the songs are available to hear in hundreds of other videos on the site. Complete discrimination against an unlucky few is what seems to be happening. There picking on certain users and leaving out there rest. Either take them all off which would be the most stupid decision ever, or stop picking on youtube users and having a bitch because we bought your music and then wanted to play it!!
Tom
We are having trouble getting views! please watch
make me want to promote singing fools video. you too now can upload videos and create a chanel i think. they deleted about 12 of my videos but allow other videos witht the same content live. lol. when another company similar to youtube comes out then i am gone from youtube.
A professional websit of streaming audio recorder:
http://www.down...io-recoder/#137
OK, I’ve uploaded my 2nd vid on you tube but i used a song that was allowed what happens when you use those? Another thing do you think we will really have to pay for any upload to you tube?
Sales are slipping … what else is new!
Hola, disculpen no se Ingles, hay alguna forma de bajar los Videos de Youtube pero son el audio y en MP3 en alta calidad, porque las paginas que encontre lo exportan en una calidad baja, conocen alguna que lo guarde en alta calidad ?