When the Betamax/VCR first came out, Hollywood insisted that it was pure evil and that it would be "the Boston Strangler" to the movie business. And, if you looked at how the devices were used at first, you could easily argue that the vast, vast majority of the usage was, in fact, infringing. In part, that was because the movie studios were so freaked out about such devices, they couldn't even comprehend offering licensed movies for home viewing at the time. Instead, the device was purely about "theft." Of course, after a drawn out trial, the Supreme Court (very closely) came down in favor of the VCR, and said that because it had substantial non-infringing uses, it was legal. Just a few years after that, the home video market for the major Hollywood studios was so large, that it was widely claimed that the VCR saved Hollywood, rather than killing it.

This story is not a unique one. We seem to see the same thing with every disruptive technology that old guard entertainment firms can't comprehend. When radio was introduced it was declared that it would kill the music industry. The RIAA worked hard to have the MP3 player declared illegal.

It happens over and over again -- and each and every time, soon afterwards, new markets emerge, new opportunities become abundantly clear, and the platform that was supposedly pure evil and bent on the destruction of the industry turns out to be a huge new revenue base and opportunity, usually providing revenue in ways that simply weren't possible before that new technology came along.

It sure looks like the same exact thing is happening with YouTube. As you probably know, Viacom is still engaged in a drawn out lawsuit against YouTube over many thousands of clips that Viacom insists were infringing and a massive blight on its bottom line.

And yet... because YouTube had the time to develop, something interesting has been happening. By now you're hopefully all familiar with ContentID. While it has its quirks and issues, one thing that is clear is that it's become a tremendous source of revenue for content creators to monetize works uploaded by others. But it's not just others. NPR has a story about how the major MPAA Hollywood studios -- including Viacom -- are now profiting nicely by purposely uploading all sorts of clips from their various movies, knowing that people are searching for and watching key moments... which they can monetize:

Oh, and the fun part: she gets to watch movies, pick the most memorable moments, and upload those clips to YouTube. Today, it's L.A. Story.

"We always pick a clip that has a beginning, middle and an end," says Strickland, pointing out the various fields she has to fill out in the content management system before she uploads a clip to YouTube. "I put everyone that's in the scene: so Steve Martin, Richard Grant, Victoria Tennant, Sarah Jessica Parker, I put some of the memorable dialogue — 'SanDeE your breasts feel weird, oh, that's because they're real' — then you put discussion topics, character types, settings, eras, what they're doing."

It consists of hours of tedious work to ensure this licensed content will show up first when you go searching for your favorite movie clip on YouTube. Not an easy task when 60 hours of video are uploaded to YouTube every minute.

This is a company that all the big MPAA studios are hiring to go out, find these clips in their own movies, and upload them (and then do things to get them to the top of Google searches). Apparently, it's quite lucrative for the studios. Of course, what's funny is that the same people who are now celebrating this new revenue stream are also the ones who just a few years ago insisted not only that YouTube was illegal, but that it was dead, because no money could be made from it. But, somehow, these things have a way of working themselves out if they're allowed to do so.

This is one of the things that is so troubling to me about the abrupt shutdown of Megaupload. While, at an initial glance, it's easy to insist that the service must be illegal, the company was actually very actively trying out unique new business models for artists, which many artists celebrated. But we'll never know how well those would have worked. When the VCR, radio, the MP3 player and YouTube first came on the scene, the industry insisted they were all just as bad as Megaupload. In hindsight those arguments seem pretty silly -- but it seems like we'll never be able to get that same hindsight for Megaupload. And that's a real shame for the content creators who almost certainly would have embraced new business models enabled by this new technology.

A few years back, we wrote about the company Rumblefish claiming copyright on public domain works on YouTube and getting them taken down. Recently, the company got a lot of attention for claiming copyright on someone's video because it had some birds chirping in the background, and a very mistaken Rumblefish process not only believed it owned the birdsongs, but then an employee doubled down and refused to back down when challenged on this. The company did eventually admit a big mistake after this received a ton of publicity -- but many of us were still worried about the process that allowed Rumblefish to make such a bogus claim in the first place.

Here's a story of another Rumblefish takedown -- but the details suggest one of the reasons why these things may be happening. John Boydston, from the band Daddy A Go Go, recently contacted us after he discovered that Rumblefish was claiming copyright on a video he had put up on YouTube, for an original song called I Wanna Be An Action Figure. The song was written by Boydston and he holds the sole copyright. It was released on a CD back in 2002. The video was produced (by Boydston again) just last year and posted to YouTube last October. Even so, Boydston received a notice from YouTube saying that music in that video "may have content that is owned or licensed by rumblefish." Boydston filed a dispute over this -- but was told that it would take a month to hear back -- and in the meantime ads might appear next to his videos with the proceeds going to Rumblefish.

Thankfully, the process didn't take that long. Within a day of filing the dispute claim, YouTube sent Boydston an email telling him that "rumblefish has reviewed your dispute and released its copyright claim on your video." So, at the very least, that's an improvement over the birdsong situation.

So, what happened? Boydston searched around for a while to actually find a contact at Rumblefish and had a short email exchange where he was told that the "system is working the way it should." It turns out that Boydston signed the band up with CDBaby to be his online distributor. They offer his music off of the CD Baby site, but also distribute it to tons of other properties, like iTunes, Amazon and various streaming services. And... it turns out, mixed in with a long list of music stores and streaming sites, is Rumblefish. The company is supposed to help potentially license the song to others, with a cut of the proceeds going back to Boydston (I assume after Rumblefish and CDBaby take their cut). So part of that is that Rumblefish automatically registers all such music with YouTube's ContentID, and sets it to "monetize." That, of course, leads to the silly result that any time an indie artist who uses CD Baby puts their own work up on YouTube, Rumblefish may end up claiming the work as its own (though, in theory, some of the proceeds would eventually get back to the author). Unfortunately, this is not clearly explained at all.

CDBaby does let its musicians opt-out of each individual service, and having gone through this whole experience, Boyston has decided to uncheck Rumblefish, and no longer allow them to claim his own music on YouTube.

We've discussed a few times the legal fight in Germany between YouTube and the overbearing collections society GEMA. German law is a bit bizarre in that it has very little regard for secondary liability protections, and often seems to default to blaming third parties for the actions of their users. On top of that, GEMA is incredibly powerful and controlling in Germany. When I was there a few years ago (in part to discuss this case), I had musicians explaining to me that they had "secret websites" because GEMA wouldn't let them offer their own music for free. The GEMA/YouTube dispute centers around the fact that GEMA wants YouTube to pay a fixed fee every time a video that includes a GEMA-covered song is played (and GEMA has actually suggested the fee for each stream should be identical to the cost of a download -- no joke). After suing YouTube/Google, GEMA refused to negotiate, making Germany the only modern country in the world in which a collection society didn't work out a deal with YouTube (and meaning that Google started blocking tons of music videos in Germany).

Unfortunately, the court has now ruled in the case, and the results seem ridiculous. It has said that YouTube is liable when users post videos (third party liability concepts still just don't make sense to German courts). Even more ridiculous, however, is that the court has said that YouTube's famous ContentID system is not enough. Instead, it must also install a keyword-based filter to block GEMA songs from being uploaded. Keyword-filters? Really. We've done this before a bunch of times and it doesn't work. At all. Keyword filters are really stupid ways to deal with these kinds of things. First off, they tend to block all sorts of legitimate content. But, more importantly, users figure out how to get around them in less than an hour. They just start coming up with easy-to-decipher substitutes. Comparing a keyword filter to ContentID is like comparing a human strapping on wings to a modern fighter plane. One of them works and can actually get the job done. One of them just makes you look like an idiot.

The only "concession" the court appears to have given YouTube is that it only expects such filtering to work going forward, rather than having them search the archive. That, of course, is barely a concession at all. If I remember correctly, this particular court, in Hamburg, is somewhat notorious for siding with copyright holders, so I wouldn't be surprised to see an appeal on this case...

A whole bunch of folks have been sending in this Slashdot story about a guy who had one of his videos "claimed" via ContentID on YouTube due to a purpoted match with content that Rumblefish claims to hold the copyright on. We actually saw this post early on, because it links to an old Techdirt post about questionable Rumblefish takedowns. In this case, the guy says that there was no music in the video, but that Rumblefish said that the birds singing in the background violated its copyright:

"I make nature videos for my YouTube channel, generally in remote wilderness away from any possible source of music. And I purposely avoid using a soundtrack in my videos because of all the horror stories I hear about Rumblefish filing claims against public domain music. But when uploading my latest video, YouTube informed me that I was using Rumblefish's copyrighted content, and so ads would be placed on my video, with the proceeds going to said company. This baffled me. I disputed their claim with YouTube's system — and Rumblefish refuted my dispute, and asserted that: 'All content owners have reviewed your video and confirmed their claims to some or all of its content: Entity: rumblefish; Content Type: Musical Composition.' So I asked some questions, and it appears that the birds singing in the background of my video are Rumblefish's exclusive intellectual property."

While it's still not fully clear what happened, the idea of claiming copyright on birds singing is actually not an entirely new concept (though, yes, it is ridiculous). In 2010, we wrote about Apple getting sued buy a guy, Martyn Stewart, who had recorded a bunch of bird sounds. Someone else had used those sounds in an app called iBird. As I said then, I'm not sure that there really is much "copyright" to claim over recording birds, but even if someone wants to make an argument that recording birds is copyrightable, it's pretty clear that the guy in the story above was just recording his own sounds -- not using someone's "copyright"-covered bird songs...

See the update at the end

The legal fight between Megaupload and Universal Music Group keeps getting more and more... odd. After the court gave UMG basically a day to respond, the company filed its response and made a rather surprising point: that a deal with YouTube/Google lets it take down videos it has no copyright over. This seems odd, and lots of people are screaming about some crazy clause that lets UMG censor anyone's videos. But I think I understand what's going on here -- and it's a very specific situation, where UMG sorta used a loophole -- so read on for the details. UMG is still being questionable, sleazy and short-sighted... but probably legal.

The key part of the company's legal response likely is accurate and probably kills MegaUpload's case. There are a few different ways that content can be taken down off of YouTube concerning copyright claims. One is via ContentID, the automated system that matches fingerprints. One is via a DMCA takedown notice. And one is via YouTube's Content Management System. This last one doesn't get much attention and isn't that well known, but it's basically halfway in between the other two (loosely speaking), granting partners the ability to spot and block videos that aren't matched by ContentID, but without sending a DMCA takedown. If you're familiar with the details of the system (which it appears MegaUpload and its lawyers were not), it was actually easy to tell this was a CMS block by the message that appeared on the blocked video. It said "This video contains content from UMG, who has blocked it on copyright grounds." That's the message that shows up on CMS blocks. DMCA takedowns say that the video is "no longer available."

So, on that point, UMG may very well be correct in its filing, that it's not subject to DMCA sanctions because it didn't actually file a DMCA notice. This is kind of a weak excuse, frankly, and really calls into question how YouTube's CMS system works, more than anything else. In theory, this also means that the only retribution that can happen for UMG wrongly taking down the videos of others is that Google cuts them off. But seeing as Google has a big partnership with UMG to build and run Vevo, that's unlikely to happen. That's a bit scary, but it suggests UMG more or less has a free pass to shut down certain videos it doesn't like without much recourse (well, beyond public ridicule).

That said, a part of UMG's explanation isn't entirely clear, but I have some guesses as to what happened. UMG claims that its agreement with YouTube goes beyond just copyright, and that it's allowed to pull videos for other (unnamed) reasons. This is new, in a sense, because YouTube has always suggested that CMS is for copyright issues -- and, in fact, the original message on the video, did, in fact, say that it was a copyright issue. YouTube later changed that message to say it was a terms of service issue. And that provides a clue.

I believe that part of the Vevo agreement is that UMG gets to "pull" videos of its own artists from YouTube for the purpose of putting them on Vevo. That's the intention anyway. I know when Vevo launched, that was part of the deal. All the YouTube videos of UMG artists magically jumped over to Vevo. So, I'm guessing that UMG basically used this loophole, which was supposed to be about taking videos off YouTube for the purpose of putting them on Vevo, and realized it could just "take the videos off YouTube" as long as they had UMG artists in them, without ever putting them up on Vevo.

In other words, due to the specific nature of the Vevo agreement -- which was intended to move videos from YouTube to Vevo -- UMG can pull videos that show its artists off of YouTube. Of course, in this case, it used it for an entirely different purpose, which was to try to censor this ad. That backfired in all sorts of ways, and it sounds like YouTube told UMG to knock it off, knowing that this was not the intention of the agreement at all. And, for what it's worth, UMG has stopped getting the video blocked, and says it will allow it to stay up for now.

This situation is messy and silly, but it seems like an unintended result of contract language over Vevo that UMG exploited. It may be legal, but in the end, it was pretty dumb by UMG. This whole thing, in true Streisand Effect fashion, actually drove a lot more attention to the ad. And even if it was legal, it sure makes UMG look petty and vindictive.

Update: Received a response from a YouTube spokesperson which makes this a little more interesting.

Our partners do not have broad take-down rights to remove anything they don’t like from our service. In limited cases, if they so choose, and based on exclusive agreements with their artists, partners can take down live performances.

That confirms some of what I thought: that UMG does not have the right to take down any videos (as people keep implying), but that it may be able to take down some videos. The new bit of info is that it's just live performances. So, that would suggest UMG is even slimier. They tried to claim that those video clips of artists in the MegaUpload song were "live performances." That's clearly bogus.

Update 2: And... MegaUpload has conceded that its restraining order request is moot, and so the judge has denied it (pdf), while giving the company the right to file for a preliminary injunction and for discovery. So, not much of anything, but the case will likely continue.