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That Story You've Read About YouTube 'Blocking' Indie Artists... Yeah, That's Not Accurate

from the a-bit-of-spin-and-you-can-make-anything-look-evil dept

As you may have heard, there's been some hubbub this week about claims that YouTube is going to remove some videos from indie musicians/labels who don't agree to the contract terms for YouTube's upcoming music subscription service. Ellen Huet, over at Forbes, has a good article explaining how this isn't as dire as some are making it out to be, but the more I'm digging into it, it seems even less than that. There's no doubt that this is a royalty dispute, with some indie labels upset about the basic terms that Google is offering, but, if you haven't noticed, the complaints seem to be coming from the same folks who complain about the royalty rates of every single online music service. There are some people who will just never be satisfied. Furthermore, the deeper you dig into this, it becomes quite clear that any artist who wants to have their videos on YouTube can continue to do that.

Here's the main issue: YouTube, which has long been the most popular place for people to find and listen to music, is about to launch some sort of premium subscription service. This has been rumored for ages, and it's expected to build a Spotify-like service on top of YouTube's existing content. As part of this, YouTube is going around and negotiating royalty deals with labels and artists, most of which have signed on. This is providing a new revenue stream to those artists. Currently, for artists on YouTube, they're only able to make a cut of advertising revenue (which isn't that much) via YouTube's Partner program. By launching a premium subscription service, YouTube is adding a brand new revenue stream, which by all accounts will pay noticeably better than the current partner offering. Just as Spotify pays more to artists when a "subscriber" streams a song than when an ad-supported user streams a song, it appears that YouTube will do the same.

Now, the one big sticking point is the removal of certain videos. While Huet points out that there are very, very few videos likely to be impacted by this, it is likely to still hit a few. And, that's why it's quite reasonable to look at that and have the gut reaction: "that's bullying" or "that's unfair." It's even easier to try to spin it, as some critics have, as Google threatening people who don't agree to the royalties that it's offering. But where things appear to have been muddied is in understanding what is meant by "removing" the videos. As far as we can tell, Google is just saying it will remove those videos from its partner program. YouTube is an open platform. Anyone can go and upload videos for free. Any musician who wants their video on the platform can do so for free. However, for videos that are already in the partner program, if they reject the new deal (which, again, is better than the existing deal), Google will no longer have a license to host that video as a part of its partner program, so that copy may be removed because the artist has effectively pulled its license from YouTube to host it. The musicians and labels can still go back and re-upload their own videos -- it's just that they've chosen not to monetize the video at all by joining the partner program. You could argue that Google could just "move" the video from the partner program to outside the partner program, but then these same folks would probably try to spin it as Google infringing on their copyrights by hosting their videos without a license...

Put yourself in the shoes of the indie band here. Under the existing system, you can "monetize" your videos by getting a cut of the tiny ad revenue that comes in from each view. From what everyone says, unless you're absolutely huge, the money just isn't that great. Such is the nature of online advertising these days. But the new offering gives you a cut of subscription revenue also, which is likely to be higher. So, now, as an indie band, the options are: take Google's music streaming deal, which is better than the crappy ad share deal you're currently getting or... have your video removed from YouTube's partner program.

In short: before, you had two options:
  1. Post your video and monetize it via YouTube's partner program with a bit of ad revenue.
  2. Post your video and don't monetize it.
And now you'll have these two options:
  1. Post your video and monetize it via YouTube's partner program with a bit of ad revenue and some subscription revenue
  2. Post your video and don't monetize it.
And, somehow, the same folks who complain about every music service are spinning this second option as some sort of insult, even though it's better than the existing options. It takes some kind of special level of bullshit to argue that a company offering to improve your deal is doing something bad.

Sure, perhaps it's fair game to argue that the new deal isn't good enough for a subscription service, but it's difficult to see how acts are complaining that their videos will be taken out of the partner program when the existing deal is even worse. So, basically, Google is offering these labels a better deal than before, and it's being attacked because it's removing the option for the old not so good deal. It's a little difficult to see how that's a fair complaint. After all, YouTube has given these artists a massive, powerful and robust platform to put their videos up for free with no bandwidth costs at all, and even given them a variety of monetization options, from ad shares to linking people to buy MP3s and such. And now it's removing one option while adding a better paying option... But a few indie labels are spinning it negatively because they want an even better deal. And maybe the royalty rates they want are justified. But to present this as somehow hurting those indie artists just seems to be pure spin.

Hell, go back to the time before YouTube, and think about the deal that indie artists had if they wanted to put videos online? They would have to pay through the nose for something like a Real Video Server, then pay for all the bandwidth, and then know that it was still almost impossible for anyone to watch the video. Then YouTube came along and made it both easy and free for anyone to put their videos online, plus build a large community of people who want to watch those videos, and then added ways to monetize those videos. Now, YouTube is adding another way to monetize those videos even more, and the artists are suddenly claiming it's an attack on them? Yikes.

Reader Comments (rss)

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  1.  
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    Anonymous Coward, Jun 20th, 2014 @ 10:28am

    Logistics

    I suspect google does not want to deal with keeping track of what videos are in the old program vs the new program and then have to filter the subscription service based on what program a particular video is in.

    Thats why they are simply removing the videos of those not wanting to accept the new better deal.

    If people are so upset about potentially making *MORE* money through their google videos I suggest they delete the videos themselves and go post them on some other site.

     

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    Rabbit80, Jun 20th, 2014 @ 10:31am

    Thanks for cutting the crap out of what the big media have been saying the past few days.

     

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    Anonymous Coward, Jun 20th, 2014 @ 10:32am

    Why can't there be four options? 1) Post and don't monetize. 2) Post and monetize solely through ad revenue (i.e., the artist's video cannot be watched ad-free). 3) Post and monetize solely through subscription fees (i.e., the artist's video can only be watched by subscribers). 4) Post and monetize through both ad revenue and subscriptions. It makes more sense to provide more options.

     

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    Mike Masnick (profile), Jun 20th, 2014 @ 10:38am

    Re:

    2) Post and monetize solely through ad revenue (i.e., the artist's video cannot be watched ad-free)

    I think the concern here was about the consistency of the user experience. Under that scenario, for example, someone could see an official monetized video on the ad-supported part of YouTube, and be asked to pay for an "ad-free subscription." Then... s/he would still see that same video *with ads* and get annoyed that they had paid for an ad-free video... but didn't get it.

     

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    Mr. Oizo, Jun 20th, 2014 @ 10:46am

    Re:

    Yep, that what makes it 'google strongarming the indies' They have no choice but to accept the new rules. They cannot simply stay with the old 'just go for the ads'.

     

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    Anonymous Coward, Jun 20th, 2014 @ 10:47am

    "Google is always thinking of the little guy", says Google's unofficial spokesman, Mike Masnick.

     

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    wallyb132 (profile), Jun 20th, 2014 @ 10:48am

    Well said Mike...

    I figured there was some kind of special bullshit at play with this whole ordeal... There always is...

     

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    Michael, Jun 20th, 2014 @ 10:49am

    Re: Re:

    It could also be that they wanted a little bit of incentive for artists and labels to move to the ad-free subscription model.

    Record labels are crazy resistant to change and Google coming to them with a subscription model that even looked great on paper could have resulted in a lot of labels not signing onto it.

     

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  9.  
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    David, Jun 20th, 2014 @ 10:54am

    There is no reason whatever why YouTube should remove any videos from the existing platform. If YouTube have restructured the 'partner' contracts so that use of the existing platform is conditional on signing up to the new one, then that is YouTube's choice, and is about as clear an abuse of YouTube's dominant position as could be imagined. Let's try a simple analogy: suppose you have a contract with a broadband supplier to supply broadband services, then they diversify into cable TV, and tell you 'You can't continue to use the broadband service unless you sign up for the TV service'. You would be outraged, and rightly so. If, in addition, the broadband service happened to have a near-monopoly, you could make a complaint to the anti-trust authorities, which is what the independent music labels are doing with YouTube.

     

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    Mike Masnick (profile), Jun 20th, 2014 @ 10:56am

    Re:

    There is no reason whatever why YouTube should remove any videos from the existing platform.

    I think you're misunderstanding what's going on (as are many, so it's understandable). The issue isn't so much YouTube removing the videos as the *artists* removing their license to YouTube to host the video.

    So... if they leave it up, they'll face claims of infringement.

     

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    Anonymous Coward, Jun 20th, 2014 @ 10:59am

    No, Mike. It's YouTube saying that the old licenses are no longer interesting to them, so they no longer want them.

     

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    Michael, Jun 20th, 2014 @ 11:02am

    Re:

    'You can't continue to use the broadband service unless you sign up for the TV service'

    Or like a cable company saying "you can't get FOX without paying for Animal Planet and German Cooking HD". Oh, wait, they actually do that.

    You have a good point - changing contract structure mid-contract is a bit of a dickish move, but you are missing something key in your analogy - the change Google is making turns out to actually benefit the copyright holder. Google is not asking them to pay additional money or to take a smaller percentage of ad revenue.

    If the copyright holder actually ended up with less ad revenue and the subscription fees they received did not make up the difference, they may have something to complain about, but I have seen what this ad revenue looks like and it seems unlikely to get much smaller.

     

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    Michael, Jun 20th, 2014 @ 11:06am

    Re:

    Looking at it from that perspective, the content owners would have absolutely nothing to complain about.

    You cannot complain that someone is not using a legally granted license for something. That's like selling someone a bike and then bitching that they don't ride it.

     

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    bob, Jun 20th, 2014 @ 11:11am

    More apologies and misdirection to protect GOOG

    Wow. Google is about to CENSOR people who don't pay them off. At least that's the rhetoric you would normally use if you were talking about the RIAA shutting down someone's ability to hear or see something online. But whoops. Now that GOOG is doing it, you've got another definition and another way to rationalize it. I'm so surprised.

     

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    Anonymous Coward, Jun 20th, 2014 @ 11:16am

    Re: More apologies and misdirection to protect GOOG

    And as usual you didn't even read the article you bitch about. I'm so surprised.

     

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    Michael, Jun 20th, 2014 @ 11:18am

    Re: More apologies and misdirection to protect GOOG

    shutting down someone's ability to hear or see something online

    You see, this is the kind of post that is really useless. You COULD have an actual argument here, but instead you post something ENTIRELY untrue. A content owner can absolutely continue to post their videos on YouTube.

     

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    Chronno S. Trigger (profile), Jun 20th, 2014 @ 11:24am

    I don't know how it is for the bigger channels, but my monitizaton rate is about 5-8%. For every 100 views I get, around 5-8 of them earn any money. From what I hear, bigger channels aren't much better off. The problem is that advertisements are so terrible that most people feel forced to use things like Adblock+.

    I don't see how adding a subscription model so people don't even have to bother with Adblock is a bad thing. I wish that they would roll this out site wide. I'd pay for a Youtube subscription. $10-$15 per month? I'd go for it.

     

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  18.  
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    Anonymous Coward, Jun 20th, 2014 @ 11:33am

    Re: More apologies and misdirection to protect GOOG

    Wow. Google is about to CENSOR people who don't pay them off.

    100% wrong, as they can take their content and go elsewhere, both before, or after accepting Google's offer. Google is not a publisher, who would demand control over works by requiring assignment of the copyright, but rather offering a service on a profit share basis.

     

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    Anonymous Coward, Jun 20th, 2014 @ 11:33am

    If I should venture a guess, this has little to do with Youtubes actual services and everything to do with the deals offered to the different parties and Youtubes services being held as a hostage.
    Especially the big companies have a reputation as extremely nasty negotiators, requiring huge concessions for joining ventures and not shying away from blowing up a scandal if it suits them. On the other hand indies and small companies have a reputation for actually embracing the internet and being much more concilliatory with music services.

    Now if the smaller companies somehow got wind of the offered prices for the big companies and they get only a fraction, this current situation would make a lot of sense. Since numbers aren't traditionally negotiated in the press, this is the only real way to create some drama in the press and make their negotiation position better. It is sad, but these types of negotiations are run "The Godfather"-way.

     

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  20.  
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    Chronno S. Trigger (profile), Jun 20th, 2014 @ 11:40am

    Re:

    I would agree wholeheartedly, but from what I'm reading, that's not the case. They're complaining that Google might be offering too much for free, undermining pay services like iTunes and Spotify. I don't know how that makes any sense, but that's what I read.

     

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  21.  
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    Leigh Beadon (profile), Jun 20th, 2014 @ 11:49am

    Re:

    Though the details of the deals aren't public, currently it sounds like the only difference is the guarantees/minimum payouts. Which, honestly, is perfectly fair -- it's not saying indie music is worth less per listen, just that it's not as sure a bet for a certain number of listens as the pop hits pumped out by the majors.

     

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    Bob, Jun 20th, 2014 @ 11:51am

    Re: Re: More apologies and misdirection to protect GOOG

    Oh rilly? That's still not clear as even the article admits. It includes the famous wiggle words, "As far as we can tell..."

    In any case, it's CENSORSHIP! If the RIAA did it, Mike would be hauling out all of the usual arguments about net neutrality and the people's right to hear and see anything they want without paying the artists anything. But now that GOOG is involved, Mike is going to defend GOOG as somehow helping. Balderdash. It's about bullying. If you don't accept their terms, you're out of YouTube. OH maybe they'll keep some weird corner to satisfy the anti-trust people, but for most intents and purposes I'm sure GOOG is going to pad their bottom line by pushing the songs that bring them the most money. And the rest? Let's just use the word "CENSORSHIP".

     

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    madasahatter (profile), Jun 20th, 2014 @ 12:07pm

    Basic Economics

    Ad revenues shares are low for a reason but a share of a subscription per play may get more money depending the rates offered.

    The real reason to be on YouTube or Spotify is not to get rich from the fees but to get exposure with the bonus of a little bit of money. If no one has heard of the band they can get fans.

     

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  24.  
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    Gwiz (profile), Jun 20th, 2014 @ 12:10pm

    Re: Re: Re: More apologies and misdirection to protect GOOG

    Let's just use the word "CENSORSHIP".


    Let's not, because you don't understand the meaning of that word.

    If you ask me, this whole thing is like a deli who offers up free samples of ham everyday, then one day decides to start offering up filet mignon instead.

    Would you complain about the deli bullying people into eating filet mignon? Would you bitch about a monopoly because that deli is the only one in town?

    If YouTube was actually charging the content creators for the services YouTube provides them, maybe this would be a different scenario. But they don't. It's free. Quit bitching about the free lunch you are getting, sheesh.

     

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    Anonymous Coward, Jun 20th, 2014 @ 12:29pm

    I don't agree with Mike on this. Google is trying to force musicians into accepting its terms "or else" and the revenue they are offering these indie musicians is employing slave labor for where Google gets the majority of revenue and the indie artists get very little.

     

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    Anonymous Coward, Jun 20th, 2014 @ 12:36pm

    Re: Re:

    Wow Marcus.... I wonder how much more money you will be making on your music from Google's new scheme? Might it be enough to move out of your Mom's basement?

     

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  27.  
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    Anonymous Coward, Jun 20th, 2014 @ 12:40pm

    Re:

    That's right. While the artist may get nominally more than the pittance from the shared ad revenue of before. It real terms, Google will be making even more than under the old scheme and as a percentage of the total, the artists will get less. Nope, that's not evil.

     

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  28.  
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    FamilyManFirst (profile), Jun 20th, 2014 @ 12:41pm

    Re: Re: Re: More apologies and misdirection to protect GOOG

    If you don't accept their terms, you're out of YouTube.

    Baloney. You can post whatever you want, for free. YouTube won't interfere with that. Or, you can sign up for their Subscriber program. However, the Ad-Sense program is going away, so if you only post your videos there, they'll go away when that program goes away.

     

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  29.  
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    Gwiz (profile), Jun 20th, 2014 @ 12:45pm

    Re:

    Google is trying to force musicians into accepting its terms "or else"...

    What is this "or else" you speak of? If you don't like the terms, remove your content from YouTube and receive nothing from them. Pretty simple.


    ... and the revenue they are offering these indie musicians is employing slave labor for...

    Seriously? You are comparing it to slave labor? Who exactly is forcing you to use their platform that they provide, maintain and pay the bills for?


    ...where Google gets the majority of revenue and the indie artists get very little.

    Once again, it's their platform. If you don't like it, remove your music from it and receive nothing from them. Not a hard concept. No one is forcing you to keep your music on their service.

     

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    Bob, Jun 20th, 2014 @ 1:00pm

    Re: Re: Re: Re: More apologies and misdirection to protect GOOG

    Oh please. Mike and everyone at this site misuses CENSORSHIP all of the time. Why can't everyone else? If someone loser can't torrent something for free, everyone around here immediately cries, "CENSORSHIP". Sure, said loser could just go to Amazon and pay money for the same content, but no one around here cares. If you can't get it for free, someone is being CENSORED.

    And that's what GOOG's doing. But I'm beginning to love this. As GOOG turns into a content company, it's going to start to love copyright again. And then MIke will need to change his tune. Suddenly copyright trolling will become beautiful again, once the unevil people at GOOG start doing it.

     

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    Gwiz (profile), Jun 20th, 2014 @ 1:05pm

    Re: Re:

    Google will be making even more than under the old scheme and as a percentage of the total, the artists will get less.


    So what? The artist still gets MORE than before. What the fuck does it really matter if Google earns more. You'd think you would WANT them to earn more so they can keep providing you a free platform so you can earn some money on your content.

    Why don't you put up the cash to hire the programmers, buy the hardware, pay the bandwidth costs and build your own wildly popular video service? That way you can pay the content creators 100% of the profits and drive yourself into bankruptcy within a month.

     

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  32.  
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    Anonymous Coward, Jun 20th, 2014 @ 1:07pm

    Re:

    So, you think that even if Google no longer has a contract with these labels allowing it to host their content, it should leave the videos -- which will then be infringing -- up on YouTube? Since when do you advocate for Google to commit flat-out piracy?

     

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  33.  
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    Anonymous Coward, Jun 20th, 2014 @ 1:09pm

    Re: Re: Re: Re: Re: More apologies and misdirection to protect GOOG

    If someone loser can't torrent something for free, everyone around here immediately cries, "CENSORSHIP"

    Please link to one example where that happened. Prediction: you can't.

     

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    Gwiz (profile), Jun 20th, 2014 @ 1:10pm

    Re: Re: Re: Re: Re: More apologies and misdirection to protect GOOG

    Why can't everyone else? If someone loser can't torrent something for free, everyone around here immediately cries, "CENSORSHIP". Sure, said loser could just go to Amazon and pay money for the same content, but no one around here cares. If you can't get it for free, someone is being CENSORED.


    Really? Care to link to a single article where that was ever said by any of the writers at Techdirt?

    I'm waiting.....

     

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  35.  
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    Mike Masnick (profile), Jun 20th, 2014 @ 1:52pm

    Re: Re: Re: More apologies and misdirection to protect GOOG

    Hey Bob!

    Mike would be hauling out all of the usual arguments about net neutrality and the people's right to hear and see anything they want without paying the artists anything.

    "All the usual arguments..." Okay, so surely you can point to at least a couple of links where I've argued for "the people's right to hear and see anything they want without paying the artists anything."

    I'll wait.

     

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  36.  
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    Mike Masnick (profile), Jun 20th, 2014 @ 1:56pm

    Re:

    Google is trying to force musicians into accepting its terms "or else"

    Again, the terms offered are better than existing terms. So the "or else" is... what, exactly? 1. They get a better deal than existing or 2. they get nothing, as they could before.

    What is being forced upon anyone?

    the revenue they are offering these indie musicians is employing slave labor

    Slave labor? Really? Again, the artists are still free to just not have their works on the site. Same as before.

    Google gets the majority of revenue and the indie artists get very little.

    Have any evidence to support that? All of the reports argue that Google's royalty offerings are "on par" with other music services out there... none of which are profitable (most of which pay upwards of 70% to artists). So, uh, yeah... [citation needed]

     

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  37.  
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    Karl (profile), Jun 20th, 2014 @ 2:15pm

    Welcome to the "fair market rate" for music.

    Say, remember when all of those major publishers wanted to do their "partial withdrawals" from ASCAP in order to blackmail Pandora into higher royalty rates?

    The rationale that they gave was that ASCAP's consent decree hampered them from getting a "fair market rate" for their music. They argued that the only way they could get a "fair market rate" was to reject blanket licensing, and do deals with Pandora individually.

    They are still pressuring the government to change the laws so that this is allowed. And it's working - the DOJ announced that they are reviewing the consent decrees, with ASCAP's leadership and the major publishers (but not ASCAP's songwriter members) hoping that "partial withdrawals" will be allowed.

    You wonder what will happen if they are? Well, look no further than this story.

    The deals that the indies were allegedly "forced" to do with YouTube, are exactly what would happen if the consent decrees are altered. The major publishers would do individual deals with Pandora or Sirius, and the indie labels and individual songwriters would be out in the cold. They would be offered deals that are far worse than the ones major publishers, on a take-it-or-leave-it basis.

    So, that's the "fair market rate" that the publishers are after. The major publishers get to blackmail Pandora and Sirius into crippling rates, and everyone else gets nothing.

    It is beyond ironic that the people who complained about the Pandora rates are the same people who are now complaining about the YouTube deal. Either you want a "fair market rate," in which case you're in favor of the YouTube deal; or you don't, in which case you're in favor of the Pandora deal. Make up your mind, but you can't have it both ways.

     

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    Mr. Oizo, Jun 20th, 2014 @ 2:22pm

    Re: Re:

    It is not only a matter that people have no choice to accept the new terms but also the bait and switch: attract everyone to your platform, and then change the licensing terms so that they are mainly in favor of Google.

    You argue that 'it is a lot better'. From what perspective is it better ? And for who exactly ? If Google suddenly sees its profit double and the artists see their profits increase with only 10%, then the artists are still being screwed over (albeit at the second differential).

     

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    Karl (profile), Jun 20th, 2014 @ 2:24pm

    Re:

    Google gets the majority of revenue and the indie artists get very little.

    Well, under the current Partner program, the indie artists get slightly more than half of the revenue from their videos.

    The new deal will actually make artists more money than that. Even if it's not on par with what YouTube makes, it's still an improvement.

    And I'm betting that the artist's take will still be higher under YouTube's deal than it ever was under a traditional label deal. The unfortunate truth is that artists have never made the majority of revenue from their music. It's always gone primarily to the labels and retailers.

     

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    Mr. Oizo, Jun 20th, 2014 @ 2:30pm

    Re: Welcome to the "fair market rate" for music.

    Since when _must_ artists see youtube as a music platform like pandora ? The problme is choice: they don't have it. They cannot stick to the old ads-only strategy.

     

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  41.  
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    That One Guy (profile), Jun 20th, 2014 @ 2:40pm

    Re: Re: Re:

    Wait, how is an increase in profits for both Google and the artists 'screwing' the artists? They may not get as large an increase in profits as Google, but they're still making more money than before, how is that bad for them?

     

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    Mr. Oizo, Jun 20th, 2014 @ 2:47pm

    Re: Re: Re: Re:

    It is like banks, it distorts the economy. If a bank makes 200% profit, and you only get 110%, then after a while, the ecosystem collapses, because year after year, the 200% gainers become more powerful, while the 110% guys become as poor as the rest. In the end they have no choice anymore, which is becoming apparent even at this moment in how Google deals with their content-providers. It is not a good situation that they have to force this new deal through the artists' throat. If the new deal were indeed as fair as Google presents it, then artists would jump at it, but they are not.

     

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  43.  
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    Mr. Oizo, Jun 20th, 2014 @ 2:52pm

    Re: Re: Re: Re:

    Your argument sounds a lot like the dinosaur music labels: We make shitloads of money, and some artists still get some. So they should be happy. They can't be unhappy with the scraps we leave them.

     

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    That One Guy (profile), Jun 20th, 2014 @ 3:25pm

    Re: Re: Re: Re: Re:

    Really now?

    How many artists are having to sign over the ownership rights to their music under this new deal?

    How many of them are being told that nope, even though they got tens of thousands of views, they still haven't 'recouped' what they owe Google and they'll be getting nothing?

    How many of them are being told that they can either agree to the terms offered, or not post their music on YT at all?

     

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    alex (profile), Jun 20th, 2014 @ 3:43pm

    Re:

    ^^^ this

     

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    Leigh Beadon (profile), Jun 20th, 2014 @ 4:38pm

    Re: Re: Re: Re: Re:

    Your argument sounds a lot like the dinosaur music labels: We make shitloads of money, and some artists still get some. So they should be happy. They can't be unhappy with the scraps we leave them.

    Okay -- but here's the thing: YouTube is making an offer to get the license to host your videos. If you don't like the offer, because you think it's unfair or exploitative, don't take it. Don't grant them the license.

    But now, having not accepted the offer and not granted YouTube a license, what exactly do you expect them to do? You have not given them permission to host your videos — so of course they have to take them down. It would be copyright infringement to leave them up.

     

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  47.  
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    Leigh Beadon (profile), Jun 20th, 2014 @ 4:41pm

    Re: Re: Re:

    Where's the line between a "bait and switch" and just normal contract renegotiations?

    You realize that these labels in question are not just typical users: they are YouTube partners with direct contracts and relationships with YouTube. And now, before the next renewal cycle on those contracts, YouTube wants to renegotiate. With 90% of their partners, they have reached a new deal; with 10%, they have not. And thus those 10% will no longer be YouTube partners.

    All sounds like pretty straightforward business to me. If that's a bait and switch, then nobody is ever allowed to legally renegotiate any deal of any kind without being accused of the same.

     

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  48.  
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    Leigh Beadon (profile), Jun 20th, 2014 @ 4:44pm

    Re: Re: Welcome to the "fair market rate" for music.

    Since when _must_ artists see youtube as a music platform like pandora ?

    Since YouTube -- an entirely separate company that is the one running and operating this service -- decided to expand in that direction.

    You seem to think that YouTube has some duty to never, ever change so long as 10% (or less?) of its partners don't want it to. Why?

     

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  49.  
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    Anonymous Coward, Jun 20th, 2014 @ 4:47pm

    Re: Re: Welcome to the "fair market rate" for music.

    They still have the choice as to whether to use YouTube, and if they do, whether to monetize via YouTube or not. If they choose to monetize they will likely make more money. The labels may see the new model as a problem, as it becomes another way musicians can earn money without giving up their copyright, or the bulk of the income for the dubious benefits of having a publisher.

     

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  50.  
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    Gwiz (profile), Jun 20th, 2014 @ 4:48pm

    Re: Re: Re: Re: Re:

    Speaking of banks...I was trying to come up with a suitable analogy for this situation and why the artists' reaction confuses me:

    The situation is kind of like this:

    I have money in a interest bearing savings account at a bank. They pay me interest on my money and I am smart enough to realize that the bank takes my money and loans it other people and makes a lot of interest. Now the bank comes to me and says: "Hey, if you put your money into this other account, where we loan it out at a much higher rate and we make a shit load of interest on your money, we will give you 2 times your current rate."

    Why would I bitch about that? I don't get the artists' reaction here.

     

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    Chronno S. Trigger (profile), Jun 20th, 2014 @ 4:56pm

    Re: Re: Welcome to the "fair market rate" for music.

    And how exactly do you propose to give them that choice? How would you do it without coming back tomorrow and saying Google is screwing the little guy again?

    The artist chooses to keep the ads, but what do they do about the people who pay not to see the ads? Are they blocked? Then you'd come right back here and bitch about how Youtube is blocking access to the artist. Does the subscriber still get ads? Then you'd be right back here bitching about how Youtube is not keeping up with their deals and forcing the user to pay twice, or even worse pushing the user away from the artist due to no ads elsewhere.

    Do you get the idea yet? Google saw a problem with Adblock and the severe lack of ad views and decided to help out the little guy by giving another payment option to the end user. But to do that they're forced into a take it or leave it deal. They have to or they screw both the artist and the end user.

     

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    zip, Jun 20th, 2014 @ 5:16pm

    The "New Coke"

    It was a major strategic blunder by Google/Youtube to, suddenly and without recourse, take away something that so many people had grown accustomed to. That sort of thing always generates at least some degree of complaints and ill will, regardless of whether the "new and improved" replacement might be better or worse.

    The "New Coke" fiasco was a textbook example of everything that can go wrong in a PR marketing failure, which in that instance was all about making an insignificant change in a product that would have otherwise gone unnoticed, and then expecting people to automatically embrace the "new" product.

    A more recent blunder was Ford's decision to stop making a car which for many years had a near-total lock on the market for police cruisers, and instead offer up a "better" more-modern model as its replacement. Police forces nationwide were not the least bit pleased, and most of them balked at Ford's "replacement" model, and - for the first time in decades - started buying Chevrolet and Dodge cars as replacement cruisers.

    Human psychology being what it is, it's almost always a mistake for companies to think that customers will gladly accept change -- instead of rebelling against it. Google should have seen the YouTube firestorm coming.

     

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  53. This comment has been flagged by the community. Click here to show it
     
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    Anonymous Coward, Jun 20th, 2014 @ 5:17pm

    The idiots on this site will defend the evil corporation known as Google no matter what happens.

     

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  54.  
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    Leigh Beadon (profile), Jun 20th, 2014 @ 5:32pm

    Re: The "New Coke"

    It was a major strategic blunder by Google/Youtube to, suddenly and without recourse, take away something that so many people had grown accustomed to.

    I don't think it was sudden and without recourse. These negotiations have been going on for some time, presumably since long before the current partner agreements are set to expire. For those with whom a new agreement has not been reached, the current contract expiry marks the end of the partnership.

    I understand what you're getting at with those examples, but the test with the *customer base* really hasn't happened yet. That will happen when videos actually come down, and even then it's likely to be so few that it won't make a big difference. Either way, despite the (fairly mild, in internet terms) firestorm over this, I highly doubt that users have been turning away from YouTube en masse over the past couple days a la New Coke.

    The labels, meanwhile, are not so much YouTube's customers as they are its business partners. But if you want to put it in seller-customer terms then... well, it's pretty clear isn't it? YouTube is the customer. YouTube is the one paying the labels for the rights to host their content. The money flows one-way. YouTube, as the customer, has made an offer: "here's what we're willing to buy, and here's the price we're willing to pay". About 90% of the labels agreed to sell them what they want at that price; about 10% didn't. The labels are the ones refusing YouTube, not the other way around.

     

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    Anonymous Coward, Jun 20th, 2014 @ 5:35pm

    There is no hope for humanity...

     

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    Karl (profile), Jun 20th, 2014 @ 5:47pm

    Re: Re: Welcome to the "fair market rate" for music.

    Since when _must_ artists see youtube as a music platform like pandora ?

    I was talking about the misguided notion of a "fair market price." If the DOJ's review of the consent decrees results in allowing "partial withdrawals," then everyone who currently deals with ASCAP or BMI will instead start dealing directly with publishers instead. The publishers won't give them the choice, just like they tried to give Pandora no choice.

    If this happens, then companies like Pandora and Sirius will treat indie artists exactly like YouTube is treating them. (Or at least like they're complaining that YouTube is treating them.)

    If they don't want that sort of treatment from Pandora or Sirius, they should be opposed to changing the DOJ's consent decrees.

    And if they want the government to intervene in the YouTube negotiations - which they are, in fact, trying to do - then they can't complain about the lack of a "fair market rate" due to government intervention.

    Can't have it both ways.

    The problme is choice: they don't have it. They cannot stick to the old ads-only strategy.

    I agree that this is a shame, and I hope that YouTube changes that policy. But let's be perfectly honest: that was never the labels' choice to make.

    YouTube can offer their services under whatever terms they like. The indie labels can accept them, and use YouTube's services; or reject them, and not use YouTube's services.

    What they can't do is demand that YouTube have no choice but to provide them with services on their terms. Which is exactly what they're doing.

     

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  57.  
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    Anonymous Coward, Jun 21st, 2014 @ 1:36am

    Re: Re: Re:

    You sir, don't see the ball at all.

     

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    Stevo (profile), Jun 21st, 2014 @ 1:53am

    That Story

    Hey Mike I’m not disagreeing that indies should upgrade their deal with Google because it’s as you say:
    ‘better than the crappy ad share deal you're currently getting’.
    but in 2009 you said that:
    ‘It's not hard to make the argument that the music industry should have been THRILLED with the free service that Google/YouTube provided’.
    Was the Masnick of 2009 more idealistic or the Masnick of 2014 more honest?
    Also in 2009 I think you were referring to record labels when you talked about ‘gatekeepers’ but isn’t Google engaging in some pretty aggressive gatekeeping now?
    Masnick: ‘Gatekeepers are the middlemen that people generally have the biggest problem with. Those are the ones who put *themselves* — rather than the creators — at the center of the marketplace, they limit who can even be in the market, and they tend to take a disproportionate percentage of any money made.’
    Of course 5 years ago we were all more optimistic and enthused about the possibilities of the internet. I don’t think we should give up hope, but if there’s gonna be progress we have to be honest about what it is and what it isn’t.
    In 2009 you spoke of the ‘enablers’:
    ‘Enablers, on the other hand, keep the creator at the center of the market, and just provide them with the tools and services that enable them to do more of what they want to do… and do it better. So those are the companies who enable a content creator to create, to distribute, to promote and to monetize… without having to take control over the whole process.”
    it’s a nice idea but evidently it’s time has not yet arrived…

     

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  59.  
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    Mr. Oizo, Jun 21st, 2014 @ 2:55am

    Re: That Story

    That is also my problem with Techdirt & Google. Techdirt tries so hopelessly to be neutral wrt Google, while, in this case Google is pretty much behaving as any old fashioned music label from the stone age. Yet, because it is Google, they must somehow turn and twist it so that the lack of choice for artists is a good thing.

    Now, in any case, I enjoy the discussions here. I learn a lot from them, like in this case that this is a deal only for people who already have a contract with Google.

    Notwithstanding, the reporting bias is starting to burn all old articles because you start to realize that Techdirt has always been about Google.

     

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    Tom Mink (profile), Jun 21st, 2014 @ 4:57am

    The indie downside

    Youtube and Google provide an immensely valuable service for free... in exchange for the use of uploaded artists' content. It has been an uneasily balanced relationship with ad revenue as a sweetener for artists, not a charitable endeavor by Google to provide the service.

    The purpose of the service from an artist perspective has been to help with discoverability. Even the ad revenue is secondary to the ability to track further uploads from the masses through Content ID (which is apparently a service available to "partners").

    It's not clear whether participation in the subscription program precludes also making content available to non-subscribers. Presumably, Google would prefer to protect the exclusivity of their paid program. It's also not clear whether the lack of an ad supported partnership option will remove access to Content ID in order to track uploads.

    As a music subscription service, Youtube could potentially provide much higher revenues to participating artists. Since most indie artists use Youtube as a tool to aid in the discovery of their music, the direct revenue isn't as important as the ability to reach as many people as possible and to track total views. The Guardian article cites roughly 1/3 of new music revenue comes from indie sales, though the indies make up a relatively tiny part of the industry. That seems to indicate that the indies disproportionately rely on building their audiences rather than marketing a large catalog.

    I would say that it's understandable for the indies to kick up a fuss as a industry-shaping music discovery tool looks like it's being revamped to favor the major incumbents and are being asked to participate in a less useful service on even less favorable terms than the favored majors.

    It's Google's service and they can run it as they like, but the switch has echoes of Amazon-style strong arming that isn't very palateable.

     

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  61.  
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    Mike Masnick (profile), Jun 21st, 2014 @ 6:08am

    Re: That Story

    Also in 2009 I think you were referring to record labels when you talked about ‘gatekeepers’ but isn’t Google engaging in some pretty aggressive gatekeeping now?

    How so? Again, everyone is still free to upload their own videos. No one is being blocked from doing so. Gatekeeping is when the company is making the decision about who can and who cannot use the service. But that's not happening here.

    I actually am quite concerned about Google becoming a gatekeeper (and am particularly worried with some of their actions on the Android platform in particular). But I don't see how this move is a gatekeeper move in any way, UNLESS you only read the misrepresentations of what happened.

    Once again: no one is being blocked from uploading their videos here. The only situation is that artists (the artists) are being offered a *better* monetization system, and anyone is allowed to join. So, again, how are they acting as a gatekeeper in this situation? I don't see it.

     

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  62.  
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    Mike Masnick (profile), Jun 21st, 2014 @ 6:11am

    Re: The indie downside

    It's not clear whether participation in the subscription program precludes also making content available to non-subscribers.

    I've seen no indication whatsoever that this is true.

    Presumably, Google would prefer to protect the exclusivity of their paid program. It's also not clear whether the lack of an ad supported partnership option will remove access to Content ID in order to track uploads.

    I've asked about this and told that the new program will have no impact on contentID. That could be wrong, but...

    It's Google's service and they can run it as they like, but the switch has echoes of Amazon-style strong arming that isn't very palateable.

    Again, can you explain how that's the case? Remember, this offer is to IMPROVE the value that artists get out of YouTube. And if they don't like the new offer they can still keep their videos up, they just can't be a part of the partner program.

     

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  63.  
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    nasch (profile), Jun 21st, 2014 @ 7:49am

    Re: Re:

    They have no choice but to accept the new rules.

    If they don't like the rules, nobody is forcing them to use YouTube.

     

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    Stevo (profile), Jun 21st, 2014 @ 8:32am

    Re: Re: That Story

    If You Tube is now a music distributor, selling music as a PRODUCT, then ipso facto, the new You Tube will be in fact, a gatekeeper.
    Because for me to use their subscription service I have to PAY, get it? No pay no get in. Can't be part of the special people club.
    Nothing wrong with that right? That’s just business. 
    (Of course if a musician expects to be paid for their music,the trolls will start up with ‘music wants to be free, you should only make it for the love of making it’.)
    I am sure Google desires to maintain the non-subscription You Tube as open to uploads as possible. The growling between the remaining indies and Google is probably just part of the negotiation process and I would be very surprised to see You Tube ‘block’ or the labels to ‘pull’ anything since it’s not in anybody’s best interest.
    but going back to the subscription business of You Tube ,
    if they gently inform labels that they no longer offer revenue contracts to entities that are not in their special people club, then THAT is in fact gatekeeping, and it's perfectly understandable!
    from Billboard-
    ‘President of the American Association Of Independent Music, Rich Bengloff, also took aim at the majors yesterday, who have signed up to YouTube’s audio service on unknown terms. Speaking to Billboard, Bengloff suggested that a fear of the indie labels’ growing market share had led, at least in part, to the majors entering an alliance with Google that gives them preferential treatment.’   
    None of us know the facts and perhaps the indies are paranoid since they and we aren’t privy to what dealmaking went on between Google and the big labels, but…
    their fear is based on well known collusion between the major labels and the streaming services where the streamers compensate the labels with cash and stock upfront so the companies will accept worthless royalty rates. If it’s true that Google is giving the majors the same kind of ‘preferential treatment’  the other streamers are giving, then yes that would be gatekeeping also.

     

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  65.  
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    John Fenderson (profile), Jun 21st, 2014 @ 10:41am

    Re: Re: Re: That Story

    "Because for me to use their subscription service I have to PAY, get it? No pay no get in."

    But nothing is forcing you to use their subscription service. The service as it currently stands isn't changing.

    "the trolls will start up with ‘music wants to be free, you should only make it for the love of making it’"

    I honestly can't remember anyone making this argument. I can remember lots of times when people have accused others of making this argument, though. It's no more true now than it was before.

     

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    Laroquod (profile), Jun 21st, 2014 @ 10:43am

    YouTube is just implementing user 'protection'

    'Gee... that's an awfully great music video. What's it got? 100,000 views? How many likes? How many comments? That's a lot of momentum you've built behind that URL! It'd be a shame if anything were to suddenly... happen to that URL that would force to re-upload all over again and start from zero. But you can keep that URL by signing this new contract...'

    This is what you're supporting Mike, and I'm shaking my head here, wondering why you can't see this from the uploader's point-of-view. I never credited any accusations that you have a blind spot for Google, but this article here is the first that has ever given me pause.

    You called this one wrong, period. YouTube's 'sign on the dotted line or be removed' tactics are pure slime, and obviously a form of extortion. Sooner you own up to that, the better for all of us.

     

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  67.  
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    Leigh Beadon (profile), Jun 21st, 2014 @ 11:18am

    Re: YouTube is just implementing user 'protection'

    Can you explain a version of contract renegotiations that you would consider acceptable?

    I mean, I just don't get it. YouTube PAYS these people -- and when contract renewal time came up, it sought to renegotiate, just as anyone paying for a license in any contract might seek to do. In the course of negotiations, it reached a new deal with a bunch of labels -- but small minority didn't agree to it. So what exactly is YouTube's choice but to end its partnership with them? And how exactly was YouTube supposed to go about this so it's not "extortion"? Or should YouTube, as a business, never be permitted to renegotiate contracts or grow its business model, simply because it's popular and some people will always dislike the change?

     

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  68.  
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    Stevo, Jun 21st, 2014 @ 12:07pm

    Re: Re: Re: Re: That Story

    Where did I suggest there is FORCE involved?
    you lifted my sentence out of context as if to suggest I'm complaining and I'm not!
    I was illustrating the DIFFERENCE between the 2 You Tubes and as I said before there's nothing wrong with them offering a paid subscription service. In fact I'll probably sign up. I already pay for two of their services because they are good deals.
    I suspect you have skimmed past the 'you should make music for love of it' postings without noticing because they are very common and usually brief .
    Now I feel awful for using the word troll , it's the haters that come to my mind first but much more often they are very nice people that like to share their creations and aren't familiar with the lives of professionals.
    Perhaps appear more often on UK sites or Torrentfreak. For instance I'll paste here a few lines from a conversation in a UK newspaper a coupla days ago.
    ***
    anon on techdirt-
    many artists see the art as an end in itself and not as a paycheck
    ***
    conversation from the Guardian-
    Ric
    If you make music for profit then this sucks, but if you don't then so what. Upload it somewhere else like SoundCloud, which also offers video, and enable the download function freeing it up to whoever wants it.
    But if profit is your motive then I'd like to know what a song sounds like in a box I'll never open. bob@Ric 18 June 2014 7:41pmHow dare people make a living out of music! Perhaps you should work for free, too. Ric 18 June 2014 8:55pmAll of my music is free. Work... yeah I like to get paid for that, but joy, pleasure or artistic expressions I like to share.
    ***
    Later I traded comments with both of these commentors and we came to a good understanding. That's really why I go on these pages, not to unload vitriol but hopefully get past barriers, of my own or others.

     

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    Karl (profile), Jun 21st, 2014 @ 1:46pm

    Re: Re: That Story

    particularly worried with some of their actions on the Android platform

    Off-topic, but could you point to some things that are causing you to be concerned?

    I've done Android development in the past, and hope to continue doing so in the future. So if they're doing something to make it more of a closed system, that's something I'd like to know.

     

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    Leigh Beadon (profile), Jun 21st, 2014 @ 1:48pm

    Re: Re: Re: Re: Re: That Story

    [This is a bit of a tangent, but I wanted to talk about the whole profit/love thing a bit more]

    Personally, I don't subscribe to the idea that musicians should only make music for the love, or that making money is a bad ambition.

    However, doing something for the love and doing something to get paid are different in many ways, and while you can certainly do both, there will have to be compromises — because your love and the market's love won't always be identical, and your love might not extend to all the tasks surrounding music-making that enable success, so sometime's you'll be forced to choose between curbing your love in favour of money or sacrificing some money in favour of love. You'll also probably get some times where the two line up perfectly.

    The problem is when creators act as though pursuing their love should result in material success automatically. I mean, sure, that's basically what everyone wishes for in this world, and it's a good slogan for a perfectly society — but it's hardly the norm, and it's unfair for creators to act as though the internet has somehow taken this away from them and only them, when in fact neither they nor anyone else ever really had it as a baseline.

    For example:

    - Many artists object to the suggestion that success now means being an entrepreneur, promoter and businessman in addition to a good musician. They want to focus on their art. That's a fine demand if you are doing it solely for the love, but an unfair one if you want to compete in the market for money.

    - Many artists mourn the death of cultural things like record stores, album art, underground imports and back-room bootlegs — a perfectly fine thing to do if you're only in it for the love. But if you want money, then you have to accept that the market forces which killed these things made a lot of sense, and the market benefits outweigh the market downsides, especially for music consumers, and you have to reconcile that with your nostalgia.

    - Indie labels such as those in this dispute highlight their importance as places where new, different artists get exposure and support, and insist that they are an important artistic and cultural counterbalance to the major labels, and should be valued just as highly. I agree, from the perspective of a music lover. But if these labels and their artists are also seeking to make money, then they can hardly complain that by the stark reality of dollars and cents, their bargaining position in the market is weaker than that of the majors, and they often won't be able to get the same deals.

     

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    Stevo (profile), Jun 21st, 2014 @ 9:39pm

    Re: Re: Re: Re: Re: Re: That Story

    my dad is a jazz musician and the idea that he would be rich and famous was certainly not why he and his friends devoted their lives to music.
    I on the other hand became a rock musician at an early age so I have close experience with the delusions of grandeur that afflict so many rockers. Especially those that came of age in the late 80s and early 90s. The idea that you need to be rich and famous or you are a ‘loser’ is the most soul crushing burden a person can place on their own back. We musicians can thank the internet for liberating us from the expectation of riches at least. Meanwhile ‘reality’ television has convinced the rest of the species that if they are rude and sarcastic enough, they deserve to be famous!
    As far as the ‘death’ of physical retailers I don’t see at all that what we have gained has YET outweighed the downsides but it’s clear that all of us have benefited from having incredible access to the entirety of music history.
    I hope this phase of humanity will end soon, we were not meant to live our lives in front of a computer monitor.
    I believe one day we will pour out into the streets and parks and when that happens we will be listening to music!

     

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    Stu, Jun 22nd, 2014 @ 5:38am

    There's more to it than this

    Some thoughts in response to this story, starting with the fact that it's not the same people that complain about other streaming services.

    Many of the indie labels that are angriest at YouTube now have backed streaming from the early days – including enthusiastically adopting YouTube as a platform rather than bitching about its rates, as larger labels and publishers have done.

    This isn't the 'same old' rightsholders at all.

    But yes, what their complaints are specifically:

    1. That YouTube sent contracts directly to indie labels. They have a licensing agency, Merlin, which negotiates streaming rights on their behalf. It was set up to try to secure rates for indies that were comparable to those of the major labels. YouTube appears to be trying to cut Merlin out of the negotiating process here.

    2. That the contracts YouTube is sending to indies are non-negotiable: it's 'sign this or don't sign it'. Which creates problems for some of the terms below, like...

    3. That the contract demands global rights. A lot of indies don't have them – they license to one another around the world, a patchwork of partners and distributors. In many cases, they don't have the rights that YouTube is demanding in the contract.

    4. That the contract restricts exclusives off YouTube (iTunes, Spotify, whatever – labels say that they're being asked to guarantee YouTube will get new music as soon as any other partner gets it. My understanding is that the majors will not have agreed to this – but they got to negotiate. The indies don't have that luxury.

    5. That the contract demands they put their whole catalogue on YouTube, enabled for monetisation. Got an artist who wants to withhold, for whatever reason? A big problem – but it’s not negotiable.

    6. That the dialogue accompanying the contract has included the threat that if they don't sign, their content will be blocked on YouTube. I agree, there are differing interpretations of what 'blocked' means – some people have suggested it means 'blocked from monetising' rather than 'blocked from YouTube'. Several labels – who after all, fielded the actual calls in which this information was delivered – say it was clearly 'blocked from YouTube'.

    7. Blocked from monetising is a concern for them too. Labels fear that their official videos will be blocked, and that they'll be blocked from claiming and monetising videos using that music uploaded by fans too. What they’re worried about: Artist X’s official videos are taken down, they can’t claim and monetise fan-uploaded videos featuring Artist X’s music (including full album rips etc); and if, say, they weren’t allowed to use Content ID, they’d have to go back to the days of individual takedowns.

    But perhaps the most important point about this whole row:

    8. The indie labels are angry about YouTube's deals with the majors: they believe it has paid big upfront advances to the major labels, possibly in exchange for a low per-stream rate (yes, as you say, a constant source of arguments in this industry), and that YouTube is now trying to force indie labels to accept that per-stream rate without any of the advances. And they're also questioning how the major labels will pay those advances through to artists (a whole different can of worms).

    So this isn't 'idiot music rightsholders v YouTube'. It's independent labels claiming that major labels have muscled to get big advances out of YouTube that will go straight to their bottom line, then that YouTube has muscled to try to force indie labels to sign up to the streaming rates dictated by the majors' settlement.

    Is this right? It would be good to see someone like Techdirt investigating more deeply into all this, as much of the online discussion around this row is surprisingly confident ‘YouTube isn’t doing X, it’s actually doing Y’ without citing sources for that information.

     

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  73.  
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    creatif (profile), Jun 22nd, 2014 @ 5:49am

    Re: There's more to it than this

    Sorry, that was a bit long!

    As a quick follow-up, though, I don't know if those claims are correct or not. It's more that it frustrates me that the labels' specific complaints aren't being discussed more.

     

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  74.  
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    John Fenderson (profile), Jun 22nd, 2014 @ 8:36am

    Re: Re: Re: That Story

    "if they're doing something to make it more of a closed system, that's something I'd like to know."

    They're not.

    Google is tightening up some rules about what can be in the Play Store, but as always, the Play Store is not the only way that you can sell software for Android.

     

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  75.  
    identicon
    Anonymous Coward, Jun 22nd, 2014 @ 9:18am

    Re: Re: YouTube is just implementing user 'protection'

    In the course of negotiations, it reached a new deal with a bunch of labels -- but small minority didn't agree to it. So what exactly is YouTube's choice but to end its partnership with them?

    Why would it have to end its partnership with them? Since when do all parties have to have the same contracts? In fact, isn't part of the problem here that the majors got a sweeter deal than the indies? I don't see why they have to use their monopoly position to force a change in contract down the other party's throat. Why can't YouTube just stick with the old deal? Were they losing money?

     

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  76.  
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    Leigh Beadon (profile), Jun 22nd, 2014 @ 11:56am

    Re: There's more to it than this

    Thanks for this comment. You raise a lot of good points -- however, we really aren't trying to say this is "idiot music rightsholders", just that there are a lot of holes in their position. Also, I'll grant that I'd love to see YouTube do more and even sacrifice more to give indies a leg-up -- it would be a great community move and win them a lot of goodwill from me and others -- but I just don't see them as having any obligation too, and it seems like something nobody would expect from most businesses, yet people are acting as though it's somehow a duty.

    To expand on some of your points (not saying this directly refutes every one of them, but just pointing out other aspects)...

    1 - If approx. 90% of independent labels have signed the contract, as is being reported, then would a group negotiation be likely to make much of a difference? And is there any reason to hold up those 90% for the other 10%?

    2 - Well, that kinda sucks, but "non-negotiable" only holds as much weight as people let it. Again, 90% of labels agreed -- if they hadn't, negotiation would be back in the picture.

    3 - I'm all for YouTube putting its foot down over global rights, and I suspect a lot of internet users feel the same. The artificial distribution borders ensconced in old, arcane licenses and contracts are obsolete, and between the difficulty of getting out of them and ongoing attempts to maintain them, they are severely holding up the progress of digital media distribution. I'm sorry for the labels that find themselves in a difficult spot because of this, but if they want to use a global website on the global internet with a global audience, they are going to have to sort their own mess out. Neither fans nor YouTube are particularly interested in hearing about their "patchwork of partners and distributors" -- sounds like that was a foolish situation to get themselves into in the first place.

    4 - I have mixed feelings about the use of exclusivity online, and whether it's ultimately a true scarcity for an artist to sell, or an essentially artificial scarcity that shouldn't exist (I think it can sometimes be both depending on the circumstance). So I'll leave this point alone for now. It'll be interesting to see (if we ever do) exactly what the differences in terms are for the majors and indies.

    5 - Similarly to the global rights issue, this is something that I understand YouTube putting its foot down on -- though it's perhaps not as solidly defensible in all situations. But the fact is that comprehensive availability should have been the norm on the internet for a long time now -- in fact it has been, in the world of piracy -- and labels' weak attempts to parcel out their content in limited ways is only holding them back and frustrating users. The internet is capable of making all music constantly available to every corner of the globe, and YouTube is demanding that people get on board with that vision. While I imagine there are some legitimate reasons for withholding certain content that may give me pause, overall I find it hard to condemn YouTube for trying to force this issue. As I said once before: the culture machine has been built, and pirates shouldn't be the only ones using it properly.

    6 - So much has now been tossed back and forth about the blocking issue that I'm not sure there's much more to be said until we actually find out the true details. However, I'd make a decent wager that the labels will in no way be "fully blocked" from YouTube, and that the very worst case scenario would be them needing to re-upload everything and start from scratch as normal youtube users -- though I admit that if YouTube does make them do that, it would be a bit of a dick move.

    7 - Again, I think we'll have to wait until we find out exactly what's happening regarding ContentID, because I've heard several different versions. However I will point out that "individual takedowns" is all the law requires of YouTube -- ContentID and the ability to monetize user videos are things that YouTube created for rightsholders.

    8 - Well, finally, one more that I'll withhold strong judgement on until there are more details... But it will likely always be very hard to say with any certainty whether the advances were "in exchange for" a low per-stream rate -- and when you look at it without that speculation, it seems pretty fair: of course labels can get bigger advances, because it's a safer bet that they will bring in the necessary number of views to offset them. And it's not as if getting matching advances would really change anything for the indies: they would just be stuck paying them off from per-stream royalties for longer. That's assuming these are sensible advances -- if they are of the "you'll never recoup so we own you forever" variety, then that's a cruelly ironic twist from YouTube, and while I can't really support it, I also can't say I don't grin just a little bit at the majors getting a taste of their own medicine.

     

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  77.  
    icon
    Karl (profile), Jun 22nd, 2014 @ 5:11pm

    Re: Re: Re: Re: That Story

    Google is tightening up some rules about what can be in the Play Store, but as always, the Play Store is not the only way that you can sell software for Android.

    Well, as far as I'm concerned, Google can do whatever it wants with the Play Store, so long as it's not becoming a closed system (like iOS is).

     

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

  78.  
    identicon
    zip, Jun 22nd, 2014 @ 6:52pm

    Re: There's more to it than this

    An excellent eight points, Stu, and I hope more than just a few people read it, being this long after the original post.

    But to rewind for a moment ... As I understood it, this whole "partnership program" came about as a kind of negotiated out-of-court 'settlement' resulting from the major labels' anger that their content was being massively infringed on Youtube, along the lines of the "if you can't beat 'em, join 'em" strategy. (Let's not forget that sites like Youtube were once viewed by the content industry as little different from MegaUpload and other "pirate" sites.)

    Now that Youtube is seen by the record industry more as a valuable promotional tool and supplemental revenue source than a medium of 'piracy' to be stomped out at any cost (or, at best, managed like some incurable chronic disease) then it shouldn't be surprising that YouTube might be starting to take a harder line in its contract negotiations (or lack of, as the independents complain) especially now that YouTube has achieved almost monopoly-like status.

    One factor that stands out, however: If YouTube is negotiating with the Big Three labels in secret contract deals, while giving the small independent labels a 'take it or leave it' non-negotiable contract, then that certainly raises the question of fairness -- as the indies presumably have little negotiating muscle compared to the major labels *AND* may be much more dependent on Youtube as their primary promotional vehicle.

     

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  79.  
    identicon
    Lee, Jun 23rd, 2014 @ 10:57am

    Figures, Masnick, Google shill would write this garbage.

     

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  80.  
    identicon
    Anonymous Coward, Jun 23rd, 2014 @ 11:04am

    Re:

    Figures, you have nothing to contribute.

     

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

  81.  
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    Tom Mink (profile), Jun 24th, 2014 @ 11:00am

    Re: Re: The indie downside

    Sorry I did I drive-by. It seems that the story evolved before I was able to check back in.

    The further comments do seem to indicate that Youtube isn't trying to entirely fence off content for paying subscribers-- though it certainly would make business sense for them if they could get away with it. The access to ContentID and the ability to monetize (or even track) fan uploads seems fuzzy since ContentID seems to be a service for "partners" but there's no telling whether that partnership will also be rolled into the new service.

    The Amazon strong arm tactics- yeah, that's kind of a rhetorical stretch. Though, from a business standpoint, a large distribution player presents suppliers with take it or leave it contracts. They target smaller groups specifically with poorer terms in a divide and conquer fashion. The terms may overall seem favorable at first blush, but it's hard not to make the comparison on the tactics. That may just be the way business is done these days.

     

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  82.  
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    Laroquod (profile), Jun 27th, 2014 @ 3:50pm

    Re: Re: YouTube is just implementing user 'protection'

    I don't get you and Mike. How difficult is it to understand that the holding your former URL hostage in order to force you to sign a new deal is extortion?

    How difficult is it to understand that the right thing to do here was to allow indie labels to opt out and STILL KEEP THEIR OLD URL. There is no Earthly reason not to allow this. Mike's blustering about legal liability is just -- bluster. Any change in liability could have been accomplished by having the user sign an opt out waiver in order to keep their music video's canonical URL. Since You Tube didn't provide this no-brainer option, clearly they are trying to railroad users into accepting rights by threatening to destroy data they've accumulated.

    It is totally unethical and congratulations: you two are not only helping Google, you're pretending as if this is the only way.

    My respect for Techdirt has just gone through the floor on this. I definitely don't think I will trust anything y'all ever have to say about Google again -- I'll have to make damn sure to corroborate your nonsense elsewhere.

     

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  83.  
    identicon
    Nate, Jul 10th, 2014 @ 7:45am

    "the complaints seem to be coming from the same folks who complain about the royalty rates of every single online music service. There are some people who will just never be satisfied."

    LOL. And there are some musicians who value themselves and their music highly enough to not make it available for streaming on services that pay pennies for tens of thousands of streams.

    Doesn't anyone remember the infographic that made it startlingly clear that an artist would have to have 4.1 million streams per month to make the same amount of money from selling 155 CD's online or at shows?

    If not, here it is

     

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  84.  
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    Gwiz (profile), Jul 10th, 2014 @ 8:43am

    Re:

    Doesn't anyone remember the infographic that made it startlingly clear that an artist would have to have 4.1 million streams per month to make the same amount of money from selling 155 CD's online or at shows?


    Useless comparison. Apples to oranges.

    CD sales are a one time purchase for most all consumers. Pay once, listen forever.

    Streaming sales are ongoing forever. You get paid for each play.

    To make your comparison even close to accurate you need to calculate the earnings from streaming all of the songs on the CD, on every streaming service, over the average lifetime of a CD, say 10 years or so, not just over one month.

     

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  85.  
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    nasch (profile), Jul 10th, 2014 @ 8:51am

    Re:

    Also, what do you suppose the future trends are for CD sales and for music streaming?

     

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


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