What’s Taylor Swift’s beef with YouTube? Swift is in league with the likes of Paul McCartney, U2, Billy Joel, and dozens of other musicians, plus the three big record labels — Universal, Sony, and Warner Music — calling on legislators to rewrite the laws that YouTube and similar platforms allegedly exploit. Their petition calls the Digital Millennium Copyright Act (DCMA) “one of the biggest problems confronting songwriters and recording artists today” which “has allowed major tech companies to grow and generate huge profits by creating ease of use for consumers to carry almost every recorded song in history in their pocket via a smartphone, while songwriters’ and artists’ earnings continue to diminish.”
The open letter, featured in Politico and the Hill, takes aim at the DCMA, but its real target is YouTube. Musicians want a bigger cut of what YouTube gets from their music and videos; YouTube presents itself as a preferable alternative to piracy and claims it’s playing by the rules.
It is best to not expect significant, meaningful legislation on this issue to arrive anytime soon. Congress is not generally known for taking swift (hey!) action; it’s unlikely the artists and copyright holders behind this petition expect the DMCA to be dismantled within the year.
“I would not expect some big, sweeping thing, like The Taylor Swift Income Protection Act of 2017,” said Peter D. Rosenthal, a partner in the New York office of the entertainment and intellectual property law firm Ritholz Levy. “Rather than having any political or legal consequence, it’s kind of a PR effort to bring this idea to the public attention.”
Besides, the petition isn’t even proposing anything specific, just a general, “Do… something!” Why fight this fight now? As Re/code reports, all the big labels are currently in discussions to renew their licensing deals with YouTube. The question is really, “How big of a check does Google have to cut to shut up Paul McCartney?” said Jeff Peretz, professor of music theory and performance at Tisch School of the Arts’ Clive Davis Institute of Recorded Music.
https://twitter.com/irvingazoff/status/744944495632908288
I’ll Tell You What They Want, What They Really, Really Want: To Go Back To 1998
Music industry revenue has been plummeting since its peak in the 1990s, when we were all suckers at Sam Goody shelling out $19.99 for a Spice Girls CD. The battles between artists and streaming services have been well-publicized. Taylor Swift and Beyonce pulled their catalogs from Spotify as they left for Apple Music and Tidal, respectively. Listen closely and you can hear the low-level discontent with Spotify, particularly its “freemium” model, and Pandora.
“But silently,” said Peter DiCola, professor of law at Northwestern University specializing in intellectual property and media law. “Everyone looked around and realized: No one was making very much money from YouTube.”
In 1998, Congress passed the Digital Millennial Copyright Act. “It was actually a very progressive, responsive piece of legislation at the time,” Rosenthal said, but, as you can imagine for a document drafted nearly 20 years ago, “it is completely antiquated,” said Peretz. It predates the creation of Napster (est. 1999); Napster also-rans like Limewire (2000), Kazaa, and Grooveshark (2006); iTunes (2001); and, of course, YouTube (2005). Peretz went on: “Digital streaming was not even a concept when the DMCA created its boundaries, so there’s nothing that stipulates how we should handle this.”
In short, the DMCA “got lapped by the industry,” Peretz said. The rules of the music business “were based on physically moving units,” not on streaming. “The DMCA tried to address fair accounting and adjustments for that, but it could never have predicted that we were going to shift into this streaming economy, and that’s where its left in the dust.”
Today, when Jon Bon Jovi is complaining about the DMCA, what he’s really complaining about is a section within it called the Online Copyright Infringement Liability Limitation Act, sometimes called OCILLA (pronounced oh-sih-luh) and colloquially referred to as the “safe harbor” provision.
Think of that provision, DiCola explained, as a “legislative bargain.” The DMCA gave the copyright owners “all kinds of goodies they wanted: They stepped up enforcement, increased penalties for infringement, and wrote an anti-circumvention provision.” Copyright owners planned to rely on high-quality encryption of digital files, figuring that, “if someone traffics in decryption software, we’ll just sue them and put them out of business that way.”
In exchange for that, the DMCA said that an internet service provider — at the time, the model for an ISP was AOL — wouldn’t have any liability for what was happening on anything it was carrying. This “storage at the direction of users” practice is one employed by “pretty much every internet company,” DiCola said, and it helps them keep their hands clean. Twitter and Facebook, for instance, store your tweets and photos, but are not liable for what happens on their platforms. The argument goes, basically, that you can’t blame the bulletin board for the offensive flyer someone thumbtacked there.
Now, if you know that your site is being used for infringement — or if your employees, as happened at Grooveshark, are uploading copyright-protected material — and fail to act, safe harbor doesn’t protect you. The way the courts have typically read this provision is very tech-friendly: It places the “burden for policing infringement on the copyright owners,” not the websites, DiCola said.”They have to find out where it’s happening and notify the platforms.”
“You can understand the rationale for it, which was very good at the time,” Rosenthal said. “The thought was, AOL, how can it be liable as a copyright infringer for all this stuff passing through its pipes that other people are putting in there?”
But like so many things that seem totally fine in the moment — holding national elections on a Tuesday, throwing back that last shot of tequila — the flaws in the plan are clear in hindsight. That “decyrption” plan? Never worked out. “Congress and the record labels weren’t really understanding what was going to come down the pike,” DiCola said. “The internet comes of age in the shadow of safe harbor… So it ends up that the bargain [copyright owners] struck with Congress was bad for them. The goodies that they got weren’t that good, and the little thing they gave up wound up being huge.”
They Don’t Really Care About Us
You may notice that a party is missing from these negotiations: the consumers.
“The key thing that sucks about copyright legislation is that it’s always a deal between the tech companies and the copyright owners, and neither one of those groups represents the public,” DiCola said.
Asked, “Isn’t it Congress’ job to represent the public?”, DiCola responded with what can only be described as hysterical-bordering-on-hyena-like laughter. “You can’t really think that,” he said, finally. “You’re calling me from a 202 number.”
“Facebook and YouTube want efficiency and to make the most money,” he went on. “The copyright owners want to make the most money and exercise control. Neither of those things guarantees the public can exercise free speech rights and do what they want to do online.”
Congress, DiCola pointed out, is not famous for its thorough, nuanced understanding of the internet and the average person’s usage of it. “How many members of Congress can understand the conversation we’re having?” he asked. “We haven’t had major copyright legislation for 18 years, and that’s why the courts have been allowed to interpret the DMCA.”
“Congress isn’t equipped to understand these issues and represent the public,” DiCola said. “They just bring tech companies and copyright owners to the table and let them work it out. There’s a laziness, I think.”
DiCola, for what it’s worth, agrees with the courts’ interpretation of the law and isn’t playing tiny, copyright-protected violin music for the record labels. “I don’t understand why we’d have sympathy for lobbyists who get everything on their wish list and it doesn’t work out for them.”
Also not focused on the people, for once, are the artists, who used to aim their ire at “pirates,” regular people using Napster. “In the past, the record industry — labels and artists — their beef used to be with, in effect, their fans,” Rosenthal said. “People used to be called pirates for pirating CDs and swapping stuff on Napster.”
Maybe you remember the Recording Industry of America suing a bunch of college students for uploading stuff to Napster; it was, unsurprisingly, a PR nightmare. This petition pits copyright owners against a more palatable foe: tech companies.
As you may notice, “there’s no mention, at all, in this petition about people uploading all of this stuff that they shouldn’t be uploading,” said Rosenthal. “The blame here, as it were, is with YouTube.”
Hot Take(down)s
Websites like YouTube have Terms and Conditions that clearly state users can’t upload things they don’t own, and that if the copyright owner notifies YouTube, they’ll go through the takedown process. But, naturally, thousands and thousands of people went on to upload things they didn’t own every single day.
What resulted was a massive game of Whac-a-Mole, which literally no one enjoys. It’s a bummer for whoever at Paul McCartney headquarters has to waste away precious time, resources, and energy writing up hundreds, if not thousands, of takedown notices; on the flip side, YouTube doesn’t want to spend similar time and energy going through the process of complying with those takedowns. Artists won’t admit it, but they benefit from their videos being available to fans — and, more importantly, potential future-fans — on the site. And YouTube does not benefit from being a website full of black boxes that read, “sorry, the video you’re looking for no longer exists.” Consumers, too, want what they want when they want it. Consumers do not want takedowns. Consumers want “Gangnam Style.”
“The argument is, the artist shouldn’t have to chase this stuff down,” Peretz said. “They signed a contract with these platforms who are claiming they can’t do anything about it. Whose responsibility is it to police this?” It’s an important question, he said, but one “that doesn’t get solved by putting more money into one side or the other.”
So YouTube, in order to “play nice with the copyright owners and get licenses,” DiCola said, created “Content ID.” Think of Content ID as a digital fingerprint: It stamps videos for audio and video content and identifies what’s there. If you’re a Content ID partner as a copyright owner, YouTube will share the profits with you.
“The law did not make Google do that,” DiCola said. (Remember: Google owns YouTube.) “Google offered to do that, because they wanted to make money, to sell ads, and leave the videos up.” YouTube also started selling advertising and giving a cut of that money to record labels, music publishers, film studios, and the like. It was a way of avoiding the takedown tango and, in theory, a win-win. But copyright holders earn very, very little from each YouTube play, hence the petition.
Why did anyone ever sign the Content ID deal in the first place? “They signed this thing that they hate because that’s how powerful Google is,” DiCola said.
If Swift is angry with YouTube’s deal, you might be wondering, why not quit the platform entirely? She’s done it before, after all, and Spotify has 100 million active users. But you know what’s cooler than 100 million users? One billion users, which is to say, the number of people on YouTube. Not even the biggest pop stars on the planet can say no to that. “YouTube is so valuable that even when Taylor Swift said ‘no thanks’ to Spotify, she stayed on YouTube,’ DiCola said. “YouTube pays less per stream than Spotify!” (He clarified that, while “it’s hard to pin these things down, the estimates are that YouTube is paying less.”)
The New Normal
“With digital streaming right now, writers and artists will take a hit and it will never recover,” Peretz said. Change the laws all you want, up the percentage of revenue Google-by-way-of-YouTube has to send your way, push for more transparency; it’s all well and good, but “it doesn’t really affect the issue,” Peretz said. “All the music that’s already out there, there’s nothing we can do about it. You can’t find out how many times a Lady Gaga song was shared among friends. You can’t quantify that.”
“It’s not necessarily ‘fair’ right now,” Peretz said. “It is kind of slanting towards big business and not towards ‘the artist.’ but I think the fundamental issue of how it’s all accounted and distributed needs to be addressed, not just ‘here’s more money to shut you up.’” (In this case, Peretz expects that Google “will acquiesce the way Apple did to Taylor Swift, and basically what that was is just cutting a check.”)
“You can adjust the rates, but it doesn’t address the issue of what needs to be regulated moving forward,” Peretz said. Really, “everybody is going to have to realize that they’re going to ‘take a hit.’ Artists will no longer make the same amount of money that they did. Eventually, the YouTubes and Spotifys and Apple musics will not retain as much of the revenue as they do now.”
Artists who are clinging to the old ways — a CD for $19.99, an absurd heyday that was never going to last — “should go and make benches and sell benches at the flea market and for every one you hand to a customer, they’ll hand you money,” said Peretz. Music is not exchanged in that clear a transaction anymore, and to pretend or pray otherwise is pointless.
High price points for streaming are not the future either, DiCola said. “The momentum is all pushing in the way Google, Apple and Amazon works, not the way Tidal works right now.” You know, unless consumers “wake up and say they really care about audio fidelity.”
“I think artists need to recognize that the days of strictly controlling their output is not happening anymore because of technological advances, and the corporations who rely on these loopholes and little ways of absconding themselves of responsibility for piracy, that’s going to continue as well,” Peretz said.
Thought experiment: Swift and Co. get everything they say they want. YouTube starts paying higher rates to compensate for piracy. Where does that money come from? Maybe they “[have] to lay off 100,00 employees, and that will get bad press, and that’s just the ball getting smacked back to the other side of the court,” Peretz said. “The real issue remains unaddressed: What happens going forward?”
Forget 1998. What Will The Music Industry Look Like In 2098?
DiCola has an idea. It’s a bit of a conspiracy theory. Or is it?
His argument: What’s really valuable about Spotify (to use one example) is not the music they give to the listener but the information the listener, just by listening, gives to the service. Data is the currency of the future. (Well, that and Bitcoin.) “It’s on a different vector,” DiCola said, but go ahead and run with it: If you spend your whole day listening to Pandora at work, skipping and favoriting and so on, you give Pandora a stunning amount of data with which to work.
Run a little further: If you listen to music on Amazon Prime all day, you give Amazon all your music data, which can be held up against your purchasing data, your TV-viewing data, and all the other heaps of intel they have on you.
“The pithy line is, this is about how to sell people more paper towels, too,” DiCola said. “If Amazon gets a little bit better at figuring out how to get you to subscribe to Bounty paper towels instead of buying them once in a while, that’s better for them. It increases your loyalty to them. There’s a whole set of things that goes along with it that aren’t music.”
So, “what do you do with entities that would give music away for free just for the right to watch you listen to it? To see what you do?” DiCola asked. “What does that mean for artists and the copyright system, which was propped up on the idea of selling plastic discs? This is a new thing, where the value is coming from something that isn’t music, and the artists are upset, rightly, that they’re not getting money where the value is.”
While the copyright owners have some “wish list” items, like replacing the notice-and-takedown model with a notice-and-stay-down one, and getting a bigger slice of the revenue YouTube rakes in from video views, DiCola said, “even that might be a little myopic, because what’s really going on is Google is making money by observing people.”
“What we’re looking at is a world where Google, Amazon, Facebook and Apple — the big four — have business models in mind about how they’ll make money. Music is a piece of that for all of them,” DiCola said. Though Facebook is a bit of an outlier now, it could change if they buy Spotify, a rumored potential acquisition. “We want to bring in the privacy concerns.”
Streaming platforms that try to use a high price point as a way to net more money for artists, like Tidal, won’t be able to compete in this marketplace, DiCola said. “The pressure is for the price to go to zero because music is going to be a loss meter for these giant companies that are trying to sell you Tide.”