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
Written by Donna Bogatin, Contributor
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, according to Reuters reports of Morris’ remarks at a Merrill Lynch investors’ conference earlier this week:

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.

Morris referenced the MTV “free” content experience in declaring his determination not to leave Web 2.0 money on the table:

(MTV) built a multibillion-dollar company on our (music) ... for virtually nothing. We learned a hard lesson.

YouTube is reluctant to proactively police its millions of user-submitted videos that it serves daily as I discuss in “Top five top reasons NOT to buy YouTube”:

YouTube regularly receives demands for removal of unauthorized copyright video from professional content owners; YouTube reportedly removes unauthorized content it is notified of, but does not seem to proactively police YouTube to screen for and remove copyright content uploaded in violation of the Digital Millennium Copyright Act.

Although YouTube is a magnet for the uploading and hosting of pirated video content, it is aggressively seeking authorized content distribution deals. In “YouTube nod to MySpace: Paris Hilton is YouTube's newest friend” I present YouTube's recent deal with Fox:

Hilton declares at YouTube: “Hey YouTubers, YouTube is the hottest community on the Web and that is where I want to be…promoting my new album!” Hilton is the star of a new dedicated “YouTube Channel”: “The Official Paris Hilton YouTube Channel,” sponsored by Fox’s “Prison Break.”

What is the Paris Hilton "channel" at YouTube? A dedicated promo tool designed to both foster sales of Paris Hilton records and boost viewership of Fox’s PrisonBreak show.

Accordingly, the “Channel” content is “commercials” for Paris Hilton records and the Fox PrisonBreak show. The clips are professionally produced, Hollywood style mainstream promos.

In “YouTube now 'entertainment destination': partners with NBC, courts CBS” I discuss how YouTube succeeded in developing an authorized content distribution deal with NBC:

Earlier this year, YouTube acquiesced to NBC’s demand that an unauthorized clip of the NBC produced "Saturday Night Live" video, "Lazy Sunday," be removed from YouTube, along with unauthorized copies of more than 500 other pieces of NBC content, citing the Digital Millennium Copyright Act. The pirated clip of the poular SNL parody garnered more than 5 million views at YouTube before its forced removal.

Last month, YouTube struck a cross-promotional and content distribution deal with NBC: NBC will create an official NBC Channel on YouTube to house its Fall Preview area with exclusive clips to promote NBC's "The Office."…

NBC will upload several video presentations and longform promos per week to the NBC Channel on YouTube from primetime and late-night programs like "Saturday Night Live," "The Office," and "The Tonight Show with Jay Leno." YouTube will also promote NBC's videos throughout the site.

I also discuss YouTube’s aim to develop a similar deal with CBS. YouTube CEO Chad Hurley met with CBS Corp. CEO Leslie Moonves at the Allen & Co media summit in July. Hurley said of the meeting:

There is a big wave of video coming online and these (media) guys want to work with us to stay relevant in this changing marketplace.This trend in the Internet isn't changing, so we are working with them to find solutions on how they can embrace what we are doing and really leverage that to help their business.

YouTube may soon face its day of reckoning, however. How can it continue to court authorized content distribution deals with “media guys” while it does nothing to prevent the uploading of the “media guys'" pirated content?

Universal Music has let it be known that pirates’ gold must be shared.

UPDATE: Web 2.0 Bill of Rights: free content, users control, Websites are public goods

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