After Years Of Trying To Kill YouTube, Movie Studios Are Embracing & Profiting From It

from the funny-how-that-works dept

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.

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Companies: megaupload, mpaa, viacom, youtube

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Comments on “After Years Of Trying To Kill YouTube, Movie Studios Are Embracing & Profiting From It”

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Robert (profile) says:


How much do you want to bed it’s the studios hiring people to upload “leaked” “illegal” content to filesharing sites? Think about it, if it takes off in popularity, they know it will be worth the advertising money and a large theatrical release. If not, little promo, maybe a theatrical release or straight to DVD.

But with either case, always blame piracy for hurting profits (which are ever higher) and artists (which are screwed over even more in the name of “piracy”).

“Oh sorry Mr Artist, you see, thanks to piracy, your record did not sell well, so we’ll have to lower your advances or not give you any more advances, and take larger shares of your other streams of income.”

Mr Artist: “Why, Mr Lawyer, is your collections agency taking my daughter’s babysitting money?”

Mr Lawyer: “Because of piracy. We all have to make sacrifices Mr Artist. Now run along and rant to your fans about how piracy has taken away your daughter’s babysitting money. Get your friends to do the same and maybe, just maybe, we’ll give your daughter a whole dollar at Christmas. Unfortunately, she’ll have to be taxed as though she earned her full babysitting income for the year, so in the end she’ll still owe us.”

Mr Artist: “Cursed piracy.” *to fans and potential consumers* “Thanks for ruining my life. We artists need to eat too.”

nospacesorspecialcharacters (profile) says:

The only thing that slightly bothers me about this is how original ‘remixed’ content now gets taken over by these so called ‘rights-holders’.

I had a non-profit personal video which I included a 20 second snip of a track just for background music, I could have used or switched it for a number of different tracks.

So along comes Mr rights-holder with a DMCA who converts it to a revenue source (ads appear alongside). Fine, I don’t mind this but when I go to view MY OWN VIDEO on MY OWN ANDROID TABLET on MY OWN CHANNEL, I’m told the “owner” of this video has not permitted it on mobile devices – WTF?!

So because a small sample of their work is included in my new work – they get to claim the whole thing?!

I deleted the video off YouTube because of that. They don’t get to ‘own’ it and I can change the backing track and upload again. However Google seriously need to change the wording and come up with a way that both ‘owners’ can have some control.

Michael says:


“So because a small sample of their work is included in my new work – they get to claim the whole thing?!”

Yup, even though it was very likely a clear-cut example of fair use. Apparently it’s only fair to them when they can profit from it.

But guess what? They’re also syphoning ad revenue using Content ID off of completely legitimate, non-infringing content as well. There are troll copyright groups going around claiming individual user content as their own property and then syphoning the ad revenue. That’s copyfraud.

Don’t think for one second just because the industry figured out how to profit off of YouTube that it will cease trying to regulate and control the whole internet. No matter the form of content distribution, they want to be in a position of control.

That Anonymous Coward (profile) says:

It really is a shame that Google hasn’t locked Viacom out yet.
The Belgian newspapers cried and cried how Google was stealing money from them, so Google dropped them. Suddenly they were trying to sue Google again for not driving traffic to them any more.

They totally should block all Viacom owned content from all Google holdings until the damn lawsuit is done. To allow Viacom to continue to use things Google owns while at the same time suing Google for having those tools is insane. It seems like alot of these players need to actually experience what happens when they get their way, maybe then the left hand will bitchslap the right hand for trying to hurt the company with stupid lawsuits.

Anonymous Coward says:

‘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.’

shame the same bloody fools couldn’t have seen how many non-infringing files there are on sites like TPB and ruled that it was/is legal. with various countries blocking websites, the internet itself will be next, until the entertainment industries realise how it and sensible file sharing at sensible prices will enhance Hollywood, rather than kill it.

Anonymous Coward says:


Yup, they always complain until someone else shows them how to make money. The MPAA was still suing Sony after the home video market was bringing in more money than the theatrical market. YouTube shows them how to make money by uploading free videos. There’s many more models out that that will allow consumers to listen to or view something for “free” while the studios and record companies actually make money from it.

Jay (user link) says:

corporate socialism

There’s a curious myth out there that big corporations are in favor of free enterprise. That’s absurd. Most big corporations are and always have been in favor of socialism and rigid government controls. They are in favor of government control because they benefit from it. The big corporations can afford to hire lobbyists and give big campaign contributions to get laws in place that protect the status quo, that is to say, the people who are already rich. The small up-and-coming guy with a new idea can’t afford that. Sure, government regulations cost them money. But when government regs cost every widget producer $100,000 a year, the big company that makes $1 billion a year grumbles and pays it. The little guy who makes $90,000 a year is out of business.

Almost every new technology is fought tooth and nail by people who have a vested interest in the existing technology. And government almost always sides with the vested interests.

Anonymous Coward says:


Most technology can be used legally or illegally. guns don’t kill people, people do. so when technology like YouTube is used legally no problem, but when it’s used illegally you get a $1 Billion Dollar lawsuit with Viacom.

The conversation is not about pro/con technology, it’s about Legal Vs. Illegal uses, it’s simple math.

Guns in the USA aren’t banned, their use is licensed and regulated. When people break the law, they are brought to justice.

Cars in the USA aren’t banned, their use is licensed and regulated. When people break the law, they are brought to justice.

quimbylips says:


Legality is not an absolute statement of morals for all time. Laws change and adapt to suit society’s changing morals, culture, and (yes) technology. If it weren’t this way women would still not be able to vote, slavery, etc, etc. “It’s illegal” may be a true statement but misses the point of the argument. The point is that the laws are antiquated and being warped by big business to increase their monopolies. Shooting someone is still illegal because they get hurt or die. Copyright industries have failed to substantiate their losses. What they HAVE demonstrated is anti-competetive behaviour and censorship, which IS bad for the consumer and society in general, and IS also illegal.

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