Last week, we discussed YouTube’s recent controversial decision to enable Content ID Scanning policies on Multi Channel Networks, allowing copyright owners to flag YouTube videos for take-downs. We went through how the policies could have a massive impact on intellectual property available online and the actors involved. Here, we get to analyze the decision, new incentive schemes, and hopefully come up with some solutions to the problem.
The Parties Involved and their Competing Incentives:
YouTube: Obviously Google benefits from having YouTube videos that bring in lots of viewers. Like a real television station, the more traffic that comes to their site, the better, so they’ll want to limit the take-downs as much as possible, while still adhering to the law.
Game Companies: Aside from the odd situation with Nintendo (see blog 1), game companies are in much the same situation as Google—more traffic to videos of their games means more potential customers. Additionally, the videos allow users to watch how the elite players engage with the games and apply those new skills themselves, all of which equals more time playing and more users subscribing to/buying their games. Even though the game companies don’t share in the advertisement revenue, it’s still a net positive when it comes to game sales.
The Gamers: It’s only recently that a select group of gamers have been able to make a decent living from playing games in this way. Specifically, professional gamers are able to make videos of them playing various games. They have thousands of viewers who then watch the videos, and the pro gamers are then able to sell advertisements. More on this in blog 1. Needless to say, the pro gamer’s situation is a very fragile one. If too many people take from their advertisement revenue, they’ll be out of a job.
The Musicians / Music Companies: It goes without saying that music has been played on these channels and videos constantly, without any direct payments to the musicians. However, until recently, the only way to find videos using their copyrighted music was to search each video specifically to identify each act of copyright infringement and contact their legal team (musicians with a legal team?) and have them write a take-down letter to YouTube for the video. Most musicians don’t have those kinds of resources, especially these days, so infringement was more or less a cost of being in the business. But YouTube’s decision to flag videos for possible copyright infringement has given musicians a streamlined way to find videos playing their music. It’s changed the landscape in a big way, giving music companies very different footing. Now, instead of tediously searching through millions of YouTube videos, they can automatically get the videos flagged for infringement.
Some Potential Solutions (Please post yours in the comments, I’d love to hear them!)
For Game Companies: You might consider sidestepping YouTube altogether by creating an online streaming/upload service of your own, on your own website, that allows users to post videos there and cuts out the YouTube “middle man.” League of Legends (probably the most successful streaming video game yet) has already made this move themselves; professional gamers are basically paid in proportion to the time they spend streaming and the number of viewers their videos get. This removes both YouTube and the advertising companies altogether, and can give pro-gamers a better profit (which means there will be more customers trying to be pro-gamers, and therefore more viewers, and so on, in an upward spiral).
For Professional Gamers: You’re in a burgeoning market and admittedly on unstable footing, but there’s the potential for you to make a great deal of money because of the audiences you’ve developed! (If you play, they will come…) The larger companies will start to see the money involved in these advertisement sales, and will no doubt continue to try and get a piece of it. For that reason, it would make sense to talk to a lawyer about negotiating deals with the game companies themselves, as discussed above and/or refrain from using other’s music without a license to do so.
For Musicians and Music Companies: This is only my opinion, but I think you should have the right to a small portion of the advertisement revenue that these videos produce, and I doubt that the pro-gamers would mind sharing a small amount of the revenue with you for the use of your music. (As a side-note, from a legal standpoint, you absolutely have a right to get paid for your music that is being played in these videos if you are the copyright owner). I’ve watched my fair share of streaming videos and the gamers are very often kind promoters of the bands they use (often indie or unknown bands) and where to find them. Unfortunately, writing take-down requests through Google might be throwing the baby out with the bathwater. It could create a backlash that makes Google auto-remove a lot of content that you don’t necessarily want them to remove (you just want to get paid something). If I were a music company, especially a smaller one, I would tread lightly, because this could be a brand new source of revenue. As video streaming is such a recent development in the online world, it might be in your best interest to take a hit on revenues to make sure that the videos can continue as a new and ongoing revenue source for the music industry as a whole. Obviously, the music industry isn’t in the best shape and could use more revenue sources. If any negotiation is done with YouTube, you would have to look into “Content Identifiers” or “CIDs” as a way to automatically notify you (or your publisher) of when your music is being played. A lot more can be said about the music company perspective here. If a bunch of people request a part 3 on that topic, in the comments, I’d be happy to do so.
In Other News:
Candy Trademarks??: Candy Crush has somehow miraculously and officially been rewarded a Trademark for the (very broad) terms “Candy” and “Saga” (among others) in the context of video games. That means that any use of these terms in your video game could be considered “confusing” to the consumer, and Candy Crush could take legal action against you. There’s a great article here by Forbes about the recent move, and another blog here that gets into the nitty gritty details of Trademarks and what this means going forward. Also, there is officially a backlash against the award of such overbroad Trademark terms, and I’d like to give a shout out to these guys for fighting the good fight!
Jonathan Sparks is the executive attorney at Sparks Law Practice, where he helps out startup and tech companies with business law issues, general counsel and registered agent services.
Are there any blog topics you’d like to see? Any legal questions you’d like answered? Please feel free to leave them in the comments section or shoot me an email. I’d be happy to help out.
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