YouTube Finds Signing Rights Deals Frustrating

Carl Bialik from WSJ writes "YouTube executives are finding it a slog to get all of the necessary permissions to license the songs and shows users are putting on the popular site, the Wall Street Journal reports. 'YouTube or its partners must locate parties ranging from studios to actors, and from music composers to the owners of venues, and get them to sign off. Where they don't succeed, YouTube risks being hit with lawsuits or having to take popular content down. "It's such a mess because the [entertainment companies] have all of these valuable assets that are just locked up with so many people who need to sign off on them," says YouTube Chief Executive Chad Hurley. "I don't know what it requires, if the government needs to be involved," Mr. Hurley laughs. "I don't know."'"

Google bites the dust on this one

[Fnkmaster]

Not to say that Google are complete idiots, but we all knew this was coming.

Were I behind the reigns at Google, I would have required they at least ink a few big content licensing deals before closing the transaction. In fact, with a bunch of licensing deals in place, possibly even some exclusive ones, I could see justifying a high valuation.

Why pay the huge takeout premium they paid and then have to do all the hard work after the takeout? I meant, the technology is commoditized and trivial, and the userbase can't really be worth that much to a company as big as Google, especially when they already have Google Video and could easily outgrow YouTube by spending a tiny fraction of the takeout price on advertising and promotions.

The whole deal is just downright strange.

Video Version of ASCAP

[mlmitton]

It seems like it's time for a video version of ASCAP. For those who don't know, ASCAP is an association of music writers. When your local bar plays a song, it is legally obligated to pay the writer of that song. It would of course be impossible for every bar, restaurant, night club to get permission from every songwriter they want to play. Thus comes ASCAP. Songwriters join ASCAP, bars pay a fee to ASCAP, and ASCAP distributes money to its members according to ASCAP's measure of what music is being played. (They sample.) This is an obvious, very big efficiency (which is why the government has let ASCAP and BMI bypass antitrust laws).

This hasn't been so much of an issue with respect to television. The number of outlets providing video feeds is, relatively speaking, quite small, and what they play is sufficiently uniform (or self-created) that a bureaucracy like ASCAP is unnecessary. But this changes with GooTube. Under the current model, YouTube does not have control over what gets uploaded to the site. This means they either have to police the site to be sure copyrighted content stays off -- which is difficult if not impossible, and not what the viewers want in any event -- or they have to slog through the myriad possible copyright owners who could end up on YouTube.

An ASCAP like organization solves this conflict, and it benefits both YouTube and copyright holders. By banding together in this type of organization, the copyright holders can leverage their collective value to extract money from YouTube (and everyone else). That is, all copyright holders acting together will get far more money from YouTube than acting alone. On the flip side, YouTube gets to avoid the significant expense of acquiring licenses (as TFA says), and insure against the always-real possibility of a lawsuit for copyright infringement.

It's a model that has worked in music for many decades, and it's what we need to look for in video.