Google, YouTube: multi-billion dollar 'fair-use' risky bets

Google and YouTube use a crowd pleasing “content must be set freed

The “fair-use” doctrine is critical to Google’s multi-billion dollar business and to YouTube’s hoped for billion dollar valuation.

Google CEO Eric Schmidt proudly waves the “fair-use” flag in defense of Google’s mission to obtain all the world’s content for free and YouTube directs its online copyright agnostic volunteer army of video uploaders to “fair-use” Websites.

Both Google and YouTube rely on a Web 2.0 crowd pleasing “content must be set freed” stance to garner public support for their self-aggrandizing business models based on obtaining, exploiting, controlling, owning and monetizing others’ content cost-free and on a calculated disregard for certain copyright owners’ rights over their own content.

Today’s YouTube announcement of a copyright protected distribution deal with Warner Music illustrates that YouTube can respect content owners’ copyright, when it wants to. According to FinancialTimes reports:

Under the agreement, YouTube users will have full access to videos from Warner artists. They will also be permitted incorporate material from those videos into their own clips, which are then uploaded to YouTube. Warner and YouTube will share advertising revenue sold in connection with the video content.

Chad Hurley, YouTube co-founder and CEO, is quoted:

Partnering with Warner Music Group is one of the most significant milestones for our company and our community, and shifts the paradigm in this new media movement. By providing a new distribution opportunity, we are paving the way for media companies to harness the vast financial potential of user-generated content on YouTube.

While YouTube may be paving the way for Warner Music to make money from its content on YouTube, the free-to-consumer Website is still apparently allowing unauthorized content from other content owners to flourish on YouTube without providing for compensation to the rightful content owners.

Published reports suggest YouTube is currently implementing a copyright protection by agreement only stance:

Sunday's deal will coincide with the rollout by YouTube of a new filtering technology designed to monitor content from partners like Warner across its site. That technology will help determine royalties for artists and other rights holders. It will also allow YouTube to remove user-generated clips based on Warner material that the company deems offensive.

Google also employs a selective copyright protection stance. In “Google Verticals vs. What is Google’s end-game?” I put forth implications of Google’s third party content caching strategy and present its verticals-based no-cost content acquisition strategy:

Before Google can organize all the content in the world, it needs to have access to the world's content. For Google, however, access generally means full control of the content, selling ads against the content and selling ads to better “surface” the content.

Google makes a duplicate copy of the entire content of each Web page it crawls for indexing and then keeps the copy it created, and subsequently controls, within its own storage facilities. Google’s caching of third-party Web content, and display of the copied, cached content in Google’s core search results without content owners’ explicit permission, usurps management, control and ownership of the content from the actual creators and owners of the content.

 If a Web site owner removes an expired Web page from its own site, the expired content will remain alive and well within Google and will be indefinitely available to be presented as a Google search query result. Google’s copying, caching and displaying of third-party Web page content makes Google the must-go-to destination for the world’s expired content, while also stripping content owners of full interest in, and control of, the content they created.

For Google, however, it is merely fulfilling its vaunted mission to “organize the world’s information and make it more accessible.” If pressed for a legal rationale, Google is happy to talk about “fair use” and “opt-out.”

Google aims to obtain, control and own more content, cost-free to Google, for inclusion in its core search product via a no-cost content acquisition strategy through various Google Verticals...

The allure of surfacing “Google Base content in Google search results” is attracting more content uploads to Google from content owners. Once Google obtains and controls content owners’ content, however, a Google AdWords pitch is what is often surfaced.

In “Google royalty-free content: fair-use or foul play?” I discuss how the Agence France Presse $17.5 million lawsuit against Google may signal that more savvy copyright holders will demand compensation from Google for its profiting off of their content:

Google’s unprecedented profit margins are due, in large part, to its ability, to date, to sell ads against content which it does not pay for. As the search landscape will undoubtedly evolve in the not too distant future, it is unlikely that content owners will continue to accept dilution of their ownership interests in exchange for “linking” promises.

Google CEO Eric Schmidt addressed the implications of the Agence France lawsuit and other copyright holders’ concerns at the Search Engine Strategies conference last month, indicating that the Google strategy involves a strategic content acquisition and exploitation “bet” on the "fair-use" card:

most of the litigation in my judgment was really a business negotiation being done in a courtroom. And I hate to say that, but that is my personal opinion. And in most cases a change in our policy or a financial change would in fact address many of the issues.

Without commenting specifically on AP or AFP or the book publishers, we have to respect the copyright owners' information, and it's okay to disagree on the precise aspects of the law, but no one at Google is suggesting that we are not subject to copyright law. In the United States there is a fairly well-established doctrine of fair use. And depending on which graduate school or legal school the lawyer went to, they disagree on precise details. The ones who went to this law school agree on one thing and the ones that went to this law school went to another. And I've learned that the law is not as crisply defined in this area as you might want. So in our case, we've analyzed this pretty carefully. We believe that the library work we're doing, given that we're not, in fact, reproducing the book but rather simply a snippet and then we have a pointer to the book, is absolutely permitted by fair use. Reasonable people can disagree with that, but that is our view and we spent a lot of time on it. And I don't think we're going to change our tune on that.

YouTube is also making a strategic content acquisition and exploitation “bet” on the fair-use card. In its “Copyright Tips” page YouTube indicates to YouTubers that “Commercial Content is Copyrighted” and enumerates examples:

The most common reason we take down videos for copyright infringement is that they are direct copies of copyrighted content and the owners of the copyrighted content have alerted us that their content is being used without their permission. Once we become aware of an unauthorized use, we will remove the video promptly. That is the law. Some examples of copyrighted content (although not all) are:

• TV shows, Including sitcoms, sports broadcasts, news broadcasts, comedy shows, cartoons, dramas, etc., Includes network and cable TV, pay-per-view and on-demand TV

• Music videos, such as the ones you might find on music video channels

• Videos of live concerts, even if you captured the video yourself o Even if you took the video yourself, the performer controls the right to use his/her image in a video, the songwriter owns the rights to the song being performed, and sometimes the venue prohibits filming without permission, so this video is likely to infringe somebody else's rights

• Movies and movie trailers

• Commercials

• Slide shows that include photos or images owned by somebody else

YouTube to YouTubers on copyright in laymen’s terms:

• It doesn't matter how long or short the clip is, or exactly how it got to YouTube. If you taped it off cable, videotaped your TV screen, or downloaded it from some other website, it is still copyrighted, and requires the copyright owner's permission to distribute.

• It doesn't matter whether or not you give credit to the owner/author/songwriter—it is still copyrighted.

• It doesn't matter that you are not selling the video for money—it is still copyrighted.

• It doesn't matter whether or not the video contains a copyright notice—it is still copyrighted.

• It doesn't matter whether other similar videos appear on our site—it is still copyrighted.

• It doesn't matter if you created a video made of short clips of copyrighted content—even though you edited it together, the content is still copyrighted.

YouTube also alerts YouTubers to the "’fair use’ principle of copyright law”:

To determine whether a particular use of a short clip of a copyrighted video or song qualifies as a "fair use," you need to analyze and weigh four factors that are outlined in the U.S. copyright statute. Unfortunately, the weighing of these four factors is often quite subjective and complex, and for this reason, it's often difficult to determine whether a particular use is a "fair use." If the copyright owner disagrees with your interpretation of fair use, the copyright owner may chose to resolve the dispute in court. If it turns out that your use is not a fair use, then you are infringing the copyrights of the owner and you may be liable for monetary damages…

Please remember, however, that your decision about whether and how to exercise your fair use rights is solely yours, and we at YouTube bear no responsibility for your decision.

YouTube does not proactively police all unauthorized uploading of copyrighted content. Its hands-off until DMCA notified stance, however, is being challenged, as I discuss in “Web 2.0 Bill of Rights: free content, users control, Websites are public goods” and “YouTube, MySpace at risk: UMG seeks millions of dollars from 'copyright infringers'”:

The royalty-free ride exploited by YouTube’s “clip culture," MySpace’s “friends” and other Web 2.0 free-to-consumer entertainment destinations, may soon become a tolls only entertainment thoroughfare. ‘Copyright infringers’ is how Universal Music Group (UMG) CEO Doug Morris views the new generation of user-generated media sites…

‘We believe these new businesses are copyright infringers and owe us tens of millions of dollars. How we deal with these companies will be revealed shortly.’

YouTube and Google are magnets for copyright infringement lawsuits. Reuters is reporting on the latest copyright infringement lawsuit against Google:

A Belgian court has ordered Google Inc. to stop reproducing articles from French-speaking newspapers in the news section of one of its Belgian websites, a local press organisation said.

The complaint against the world's most popular Internet search engine was lodged by Copiepresse, an organisation which manages copyright for the Belgian French and German-speaking press.

The court's ruling, which was issued on September 5, stipulates that Google must pay a fine of 1 million euros (674,000 million pounds) daily if it does not comply on Monday, Copiepress general secretary Margaret Boribon said.

Boribon is quoted:

We are asking for Google to pay and seek our authorisation to use our content ... Google sells advertising and makes money on our content.

More and more content owners will undoubtedly be stepping up to the copyright royalties plate to demand their just deserts: large slices of the advertising pies of Google, YouTube...


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