Record Labels Not Planning On Sharing YouTube Windfall With Musicians

from the it's-all-for-the-musicians,-huh? dept

Sure, YouTube might have a good legal defense to anyone who sued them for copyright infringement, but the lawsuits would still be pretty pricey. Not surprisingly, that was part of the sticking point in the negotiations between YouTube and Google before Google finally finally pulled the trigger. In order to make that issue go away, we already noted that YouTube did questionable deals with most of the major record labels the morning before they signed the Google deal -- effectively cutting them in on the deal. Now Mark Cuban is posting an email from an anonymous industry insider that provides a few more details while making the whole deal even more questionable. As the earlier article noted, YouTube was told to negotiate with effectively a blank check (signed by Google) with the record labels to get them to lay off YouTube for a while. But, here's where it gets interesting.
  • The deal was an investment, not a licensing agreement, meaning all that cash the labels got they don't actually need to share with the artists they always claim they're trying to protect. This was done on purpose.
  • While Google and YouTube have apparently put $500 million in escrow to deal with copyright lawsuits from smaller players, handing over cash to the labels came with a promise that the labels wouldn't sue YouTube for at least six months.
  • At the same time, they would sue other players in the space -- which we've already seen from Universal Music.
Add it all up, and you get the music labels effectively taking a bribe to cause trouble for Google/YouTube video competitors, ignoring YouTube to let it grow for a while, and pocketing all of the money without giving it back to the artists they supposedly represent. The claim is anonymous, but the pieces certainly fit together nicely. It would be nice to see an alternative explanation, as this whole thing reads pretty sleazy.

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  1. identicon
    Dom, 30 Oct 2006 @ 8:32pm


    If this is all true, then I am quite unimpressed. Sleazy doesn't quite cover it.

    reply to this | link to this | view in thread ]

  2. identicon
    Gus, 30 Oct 2006 @ 8:34pm

    This is about music -- but what about video? They have just as much a reason to be pissed, don't they?

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, 30 Oct 2006 @ 8:45pm

    you ask me, this kind of thing simply legitimizes piracy. Why not steal from the labels when they steal from everyone they can?

    reply to this | link to this | view in thread ]

  4. identicon
    RantMax, 30 Oct 2006 @ 10:18pm


    >you ask me, this kind of thing simply legitimizes piracy. Why not steal from the labels when they steal from everyone they can?

    Because labels have cash to bribe and sue and you don't?

    Laws work as long as you can enforce them. Law is not related to moral in any direct way..

    This basically means, steal all you can if you can get away with it. And it's the government's job to make sure you can't.

    You're implying that if they steal, they don't have the morale to stop us to steal.. As i just explained, this just doesn't fly.

    reply to this | link to this | view in thread ]

  5. identicon
    Bri, 31 Oct 2006 @ 12:23am

    re: Errr...

    RantMax, if the law becomes divorced from an ethical and/or moral framework, pick one it doesn't matter which, society will collapse. That's historical fact repeated time after time from the very beginning of civiliization. We're already seeing the cracks in our civilization today.

    As for the record labels, none of this surprises me in the least. I stopped buying CD's years ago in protest and I'm not about to buy them again, let alone download any music that gives them a cut. And no, I don't pirate download from the 'net either as that isn't ethical although if I did find a group that I liked and could pay directly to their pockets, I wouldn't hesitate. Old media is hanging on by a thread and a pretty flimsy one at that. Economically they serve no useful function, despite their assertions to the contrary, and eventually they will join scribes and other relics of the history of technology on the junk heap.

    Gatekeepers, which is their function, are no longer required in the zero-distance world of today.

    reply to this | link to this | view in thread ]

  6. identicon
    Ed, 31 Oct 2006 @ 4:41am


    Until someone other than the IT world's equivalent of Jesse Jackson or Al Sharpton comes forward with more convincing information, I'm very skeptical. Not that I trust the record companies any further than I can spit on them, but I trust the integrity of Mark Cuban even less. He will do anything and say anything to keep his name in the news.

    reply to this | link to this | view in thread ]

  7. identicon
    Mousky, 31 Oct 2006 @ 6:28am


    I'm calling BS on this anonymous source. The Google purchase of YouTube involved Google shares not cash. The YouTube shareholders did not have a "kitty of money " before approaching the media companies because the deal with Google was completed AFTER the deals made with the media companies. Besides, if the media companies took an equity position in YouTube, it would seem that they now own a piece of Google?

    reply to this | link to this | view in thread ]

  8. identicon
    Kevin, 31 Oct 2006 @ 6:38am

    Re: BS


    I think what they were saying there is that YouTube was handed a blank check from which to negotiate with the media folks prior to the announcement of Google's purchase.

    The idea is there that Google was "investing" beforehand, knowing they were going to make the deal, since we know full well that the deal was agreed on some time before it was announced.

    Having said that I would agree that one should be skeptical about anything put out there by Mark Cuban especially if it has an "anon" source behind any part of it.


    reply to this | link to this | view in thread ]

  9. identicon
    Sofa King Stoned, 31 Oct 2006 @ 8:15am


    Article summary: "blah, blah, blah, major record labels blah, blah, pretty sleazy." The same summary for every article about the record biz.

    "The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side." - Hunter S. Thompson

    reply to this | link to this | view in thread ]

  10. identicon
    John Tyler, 31 Oct 2006 @ 8:27am

    Want to know why music fans hate the big music conglomerates? This is why.

    The music companies have carefully manipulated the definitions in online distribution (e.g. iTunes) so that an artist receives almost no money per song, CD or bundle that is purchased. Then, the media companies go and do something like this so that they again do not have to pay the artists for the use of their music.

    Yes, many of the bands/singers out today do not really have talent and were created by the media companies marketing, but many are very talented and deserve to be compensated for the use of their music when there should be a license of their music.

    With that said, fair use should protect anyone that is adding a soundtrack to a personal clip, unless that person is doing it for commercial gain. The only reason that fair use will begin to breakdown for personal uses like this is if people begin to get scared and pay for this usage, that will create a market for the use and thus break fair use.

    reply to this | link to this | view in thread ]

  11. identicon
    Anonymous Coward, 31 Oct 2006 @ 8:53am

    Re: re: Errr...

    society collapses if it DOES become based on an ethical or moral framework. You don't legislate morality. Thats why society is collapsing today. Too much of a specific group's morality is being made into law. Not everyone has the same set of beliefs. Morality is neither good or bad. Its just a set of beliefs one person or group abides by. You have it completely backwards. Once you impose beliefs on someone without a logical basis (only a moral one), people will rebel.

    reply to this | link to this | view in thread ]

  12. identicon
    Shane, 31 Oct 2006 @ 9:36am

    not a bribe...

    Ahm, in full view, I don't think this would be considered so much a bribe, as payment on a Protection Racket.

    Looking at this in perspective;

    • A protection racket is usually done by a larger, more expansive group. (while Google has lots of money laying around, they don’t begin to have the influence in producing money / laws that the *AA’s have accumulated)
    • Protection money is usually paid so that “bad things won’t happen to you.” “…handing over cash to the labels came with a promise that the labels wouldn't sue YouTube for at least six months.”
    • Securing a payment from one victim allows racketeers to “reinvest” (coerce) to bring in additional profits from other areas. At no point in time does this solve problems for anyone else (anyone else with money). “At the same time, they would sue other players in the space…”
    • Protection rackets don’t often commit the offending attacks themselves. They simply let it be known that said group is not under their protection. [wikipedia reference] (this is the equivalent of letting the individual labels know that Google/YouTube is free game in the courts)
    • Protection is usually carried out by large, monolithic organizations that are past their prime, and have not adapted to the future. (personal opinion)

    reply to this | link to this | view in thread ]

  13. identicon
    Brian Wilson, 31 Oct 2006 @ 11:03am

    From a PhoList member

    I happen to personally know the guy who ratted on the deal. Like Cuban and every other member on Pho, I got the scoop as well. I immediately called up a few sources and did some crosscheck. Well, all of it is 100% true. But its 100% legal, so what's the problem mate ?

    But, still, I never expected Cuban would actually crosspost a PRIVATE communique on Pho, which btw is a CLOSED mailing list, on his wide open internet blog. Cuban will never be given access to this sort of confidential forum from now on.

    As for the public, lemme say this. America is no democracy. From time immemorial, it is, has been, and will continue to be, a plutocracy. A bunch of us get to decide what happens behind closed doors,. and the rest of you read a filtered version of it in the press.

    Now, if there are narcs in the closed group, why, they will ofcourse be systematically eliminated. Do you really think Google, or any other corp, should openly announce their buyout plans and ask 300m Americans to vote on the deal ? Please.

    This is just business, nothing sleazy about it. If you want real sleaze, why don't you dig up some dirt on that chap Khosla who's getting your government to screw your farmers by buying acres for pennies on the dollar and handing it to him to supposedly grow ethanol crops in the guise of rising energy prices. If I were to tell you what that land is actually going to be used for, why, you would yell and scream, but I would actually have a bullet or two in my brains, so I better hold my peace.

    reply to this | link to this | view in thread ]

  14. identicon
    steveking, 7 Jul 2008 @ 11:31pm today announces YouTube Robot 2.0, a tool that enables you to download video from onto your PC, convert it to various formats to watch it when you are on the road on mobile devices like mobile phone, iPod, iPhone, Pocket PC, PSP, or Zune.

    YouTube Robot allows you to search for videos using keywords or browse video by category, author, channel, language, tags, etc. When you find something noteworthy, you can preview the video right in YouTube Robot and then download it onto the hard disk drive. The speed, at which you will be downloading, is very high: up to 5 times faster than other software when you download a single file and up to 4 times faster when you download multiple files at a time.

    Manual download is not the only option with YouTube Robot. You may as well schedule the download and conversion tasks to be executed automatically, even when you are not around. Downloading is followed by conversion to the format of your choice and uploading videos to a mobile device (if needed). For example, you can plug in iPod, select the video, go to bed, and when you wake up next morning, your iPod will be ready to play new YouTube videos.

    Product page: ww
    Direct download link: ww
    web-site: ww

    reply to this | link to this | view in thread ]

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