SAN FRANCISCO — Scrawny upstart YouTube now has a buff big brother in Google to protect the video-sharing site in copyright squabbles.
Google’s army of attorneys is standing by to defend YouTube, but the video streaming Web site will feel increasing pressure to continue developing a proactive strategy to avoid the courtroom. Part of that will come from working with copyright holders on revenue-sharing deals, such as those it just signed with Sony BMG Music Entertainment, CBS, Universal Music and Warner Music Group.
Still undetermined, though, is whether record companies, TV networks and studios will view a combined Google/YouTube as a long-term business partner or a more powerful foe.
Only weeks before inking a partnership, Universal Music CEO Doug Morris had blasted YouTube and MySpace as “copyright infringers” who “owe us tens of millions of dollars.” Even if differences arise between the content suppliers (music companies, TV networks, studios) and the delivery system (YouTube, Google Video), the key will be staying out of the courtroom.
“They’ll never stop all the potential claims,” James Nguyen, co-chair of the media and entertainment practice at Los Angeles law firm Foley & Lardner, said, “but their strategy is to get as many licenses as possible, and that reduces the risk of the big guys coming after you.”
If YouTube’s partnership strategy is successful, though, it could portend a major shift on the Internet. It would allow grassroots media-makers to freely use music (and potentially video samples, too) and have YouTube compensate the copyright holders on their behalf with a portion of its ad revenue generated by the site.
YouTube’s newest deals with the record labels and CBS can generate money through content appearing on YouTube and when a label’s music is used on a fan site. YouTube hasn’t disclosed details of those deals, but one attorney said they most likely follow the models of performing rights orgs ASCAP and BMI.
Legal experts said those partnerships could serve as further insurance against future lawsuits.
“It gives you a legal precedent, where you can show that you do licensing deals with content holders, and you’re not a rogue pirate Web site,” said Jason Schultz, a staff attorney at the Electronic Frontier Foundation, an Internet advocacy group based in San Francisco. “If you go to court, you can say, we have deals with major content owners — why wouldn’t this company suing us strike the same deal with us?”
YouTube and other video-sharing sites are protected by the so-called Safe Harbor Provision of the Digital Millennium Copyright Act, passed by Congress in 1998. It makes it the copyright holder’s job to find infringing content on a site like YouTube, and to request the content be removed.
“If YouTube takes stuff down when they get a notice, they’re pretty much protected by the safe harbor, no matter how many people post copyrighted content,” Schultz said.
Despite the protections of the Copyright Act, a copyright holder can still try to sue YouTube for copyright infringement and seek damages. Nguyen said one suit has already been filed against YouTube by Robert Tur of Los Angeles News Service, alleging a video he shot of the 1992 beating of Reginald Denny was posted to YouTube without his permission and seen more than 1,000 times. Tur’s lawsuit, filed in July, claims the copy on YouTube limited his ability to profit from the video by licensing it. Tur is seeking $150,000 in damages. “I think he’ll lose,” Schultz said.
Schultz pointed out that the DMCA, while protecting online services like YouTube, doesn’t protect the individuals who post copyrighted content. But so far, copyright holders haven’t followed the trail the MPAA and RIAA blazed with suits against individuals who swapped music and movie files on the Internet. Schultz doesn’t think that would be a wise approach here.
“I think all these content holders realize that their biggest fans are the ones who are posting on YouTube, and suing those people isn’t a good way to make friends,” he said.
In the month leading up to the company’s acquisition by Google, YouTube had begun striking deals with media companies, positioning itself as a prospective marketing partner and a new source of revenue; the first such deal was announced in July, with NBC. Ironically, it was an illegally posted NBC property that gave the then-fledgling YouTube considerable traction: “Lazy Sunday,” a rap video skit from “Saturday Night Live,” quickly became one of the site’s most popular downloads. (YouTube promptly removed the video after NBC put it on notice. NBC then made it available it on Apple’s iTunes, which alerted many consumers to the site’s video capabilities.)
If that were to occur today, with NBC or a record company posting the video, YouTube’s job will be tracking the rights to the music and managing the payments, a complex challenge requiring software smarts and human oversight.
They could, with Google, be creating the sort of model that might persuade copyright holders to see it instead as a new engine of revenue. Apple, at one point, was in the same position with music companies that viewed the Web as a swamp of copyright violation.
“This is a whole new world for a lot of people,” noted Jakob Lodwick, co-founder of Vimeo, a video-sharing site that was acquired by Barry Diller’s InterActive Corp. in August. “Media companies are notoriously afraid of new technology, but I think these partnerships are a much better arrangement than going to court. Whether they produce significant enough money to make everyone happy in the long term is still up in the air.”