The following guest post comes from Ryan Born, the CEO of AdRev, a YouTube asset administration service and Multi-Channel Network (MCN). AdRev operates ContentID.com, a do-it-yourself platform for music monetization and copyright enforcement on YouTube.
First, my disclaimer…
“I’m not representing the views or opinions of YouTube. AdRev does not in any way feel that YouTube encourages its users to perform any of the actions depicted in this post. In fact, it is our opinion that each of the four scenarios listed here would violate YouTube’s Terms of Service. This post is not about YouTube as a company, YouTube personnel, or any policy of YouTube. Any references to YouTube’s guidelines are based on publicly available information and comments made by others.”
Now, my post…
At AdRev, we currently manage over 3 million music assets and have claimed 10 million YouTube videos. At ContentID.com, which is our newly-launched, self-service YouTube monetization platform for musicians, labels, and publishers, we pay out 80 percent of earnings to our partners. AdRev is a YouTube-certified company and we are 100 percent dedicated to YouTube monetization. Our clients include the largest production music libraries on the planet, as well as independent labels, publishers such as BMG, and songwriters such as Jossua Mosser (co-writer of “Radioactive” by Imagine Dragons).
We’ve been administering music copyrights within YouTube for nearly 3 years and in that time, we’ve seen YouTube users do lots of bad things. When it comes to copyright, YouTube feels like the Wild West. Every time we think we’ve seen it all, YouTube users (aka “YouTubers”) will surprise us and do something more egregious and absurd than we’ve ever seen before.
What follows are 4 examples of naughty things YouTubers may be doing with your music…
1) Uploading videos containing your music and encouraging others to rip out the audio.
Our clients regularlyfind HD YouTube videos with their music, encoded in a higher bit rate format than can be legally streamed online. Now if that doesn’t bother you, because let’s say “you’re cool with fan uploads,” what if I told you clients have found YouTube users (by way of the video description fields and in the comments to their own channel subscribers), encouraging viewers to download YouTube audio ripping software such that they can extract and download your recordings in high fidelity without having to purchase them at retail.
YouTube is the #1 music discovery platform in the world and the #2 search engine (behind Google). Therefore, you can bet your bottom dollar that before buying your content at retail, fans are likely going to first find it and stream it on YouTube. Unless you want potential buyers to be encouraged to download full length, hi-res mp3s of your music for free, it would be a good idea to start tracking use of your music on YouTube and determining which usages to allows and which to shut down.
2) Reselling your original recordings as if they were their own.
Getting people to “shoot the lock off their wallets” and purchase your music with their hard earned money is tough enough. But it only makes things harder when you find some hack reselling your recordings as if they were their own. I’m not even talking about remixes or derivative works (which we’ll get into later), but literally reselling your original, unmodified recordings as if they were the copyright holder, and driving viewers of their YouTube channel to a personal digital storefront where they sell your recordings without your permission and keep 100% of the money.
A variation of this scheme is when a YouTuber will build an audience with your recordings (which they may even claim are their own) and then send the YouTube traffic (by way of the video descriptions and comments) to websites where fans complete surveys and trial offers (e.g. sign up for Netflix to unlock this download) that generate affiliate advertising income for them while your music is given away in exchange. Ugh.
3) Creating unauthorized derivative works based on your original music and reselling the new recordings as their own.
In case it’s unclear on what I mean by “derivative work” here, for purposes of this post let’s simply define it as follows: “taking your original recording, singing over it or remixing it, and claiming the new, slightly modified recording as their own”. Yep, it happens, and I’m not talking about a more detailed legal matter like Robin Thicke / Marvin Gaye here. I’m taking about literally rapping over your original music (looped) and calling it their own.
The YouTuber may then go and resell/redistribute the derivative work in iTunes by way of a digital distributor. We’re aware of at least one case where an estimated $200,000 was earned by the “unauthorized derivative work” and the copyright holder of the original, underlying work would never have known about the existence of the scheme had they not signed up to be a client of ours. This client is now in the process of collecting what is rightfully theirs.
4) Posting pirated films and TV episodes that contain your music (and even monetizing these videos)
Ever placed your music with a music library or synchronization/licensing agent? Do you own / operate a music library? Has your music been placed into a single television commercial, TV episode, promo, trailer, or film? If you answered YES to any of these questions, then there is a very high likelihood that your music is on YouTube and synchronized, copied, and performed within unauthorized/unofficial uploads.
For clarification, I am not talking about legitimate, authorized licensees posting official videos to YouTube (e.g. Sony Pictures Entertainment posting trailers of their latest movie). I’m referring to ripped off, unauthorized and unofficial versions of any and every popular television commercial, trailer, TV show, film that can be found on network and cable television, Netflix, etc. YouTubers have been known to rip and upload this content to unofficial YouTube channels – both in short form, mash ups, and even full length (i.e. entire episodes).
If your music has ever been legitimately licensed, then it’s likely on YouTube illegitimately via unauthorized/unofficial/unlicensed uploads. Just search YouTube for your favorite shows and you’ll see what I mean.
Don’t shut them all down; there’s good money to be made.
YouTube continues to explode in popularity. Barclays recently estimated YouTube’s 2013 revenue at $3.6 billion and growing at 20 percent annually. A great deal of that revenue is being shared with both channel partners and music rights holders that monetize videos containing their content. There are two main ways to participate in YouTube’s cash flow stream, which are as follows:
(a) Upload to your own channel and monetize (by way of ads) content that either (i) you own 100% or (ii) have permission (i.e. a license) to monetize. Such monetization can be done directly via partnership with YouTube or via a 3rd party Multi-Channel Network (MCN),
(b) Find videos that have used your content (sound recordings, compositions, or audiovisual – i.e. footage, films, TV shows, etc.), claim those videos, and collect the advertising revenue generated by those videos either (i) through direct access to YouTube’s system or (b) though an MCN / administrator such as AdRev or via a self-service product like ContentID.com by AdRev.
Getting access to monetize via method A above appears simple. Pretty much anyone with a minimal view count and an AdSense account in good standing can sign themself up for the YouTube partner program. If you have any sort of traction on your official channel, you can join an MCN, like the one we operate at AdRev, where today we manage around 1,500 channels and administer 3 million music assets. To quote YouTube’s guidelines:
“MCN services could include dedicated partner management, technology/tools, production facilities, promotion, channel optimization, advertising sales support, and/or other services”.
So it seems that there are good reasons why the majority of the top YouTube channels have partnered with MCNs.
We believe that it’s because the partners get much more value from the MCN than the MCN takes via any revenue share.
Based on previous posts and comments here at DMN, there seems to be some confusion about the difficulty in getting access to monetize your music (via method B above) and how easy it is to operate optimally. Some say that direct access (method B(i) above) has been reserved for larger, well established rights holders. Maybe that’s true, but even if it were, then why would nearly all of the major music publishers choose to place some of their assets with an MCN / administrator like AdRev ?
Could it be possible that we provide many of the value-added services depicted in YouTube’s guidelines? Or that direct access alone isn’t good enough for everyone? Are there opportunities to make more money and reduce costs by utilizing a network than by going at it alone?
There is real money at stake on YouTube. Accordingly, it’s not a place to set it and forget it.
At AdRev, we have plenty of clients making over $100,000 per year on YouTube and there are many individual songs that generate upwards of $100 per day. We’re on pace to pay out $4 Million in annual YouTube related earnings.
It doesn’t take a big name / big label to have big money potential on YouTube. Sometimes all it takes is a viral cat video mash-up with your song running in the background, or one popular moment from television where your music was legitimately sync’d. You should be ready for when that day comes.
While you may want to shut down YouTube videos that cross the line, consider monetizing those that don’t, and please do your homework – talk to potential partners and determine what’s best for you.