ASCAPing YouTube: This Is How We Pay for Music in the Real World

The blogosphere has reacted with horror at the notion that the RIAA—the Recording Industry Association of America—might take action against YouTube for hosting content using recorded music without permission. Cory Doctorow of the Electronic Frontier Foundation characterizes this as “crazy, of course,” while John Battelle, author of The Search (a good book: my review here), puts the point more colorfully: “Wake up. This is how we use music in the read world. Get over yourselves.”

YouTube is the next future of television. Maybe or maybe not, but YouTube and sites like it are scorchingly hot right now. These sites host video content created by users (user-generated content or amateur content). Some of the content is extraordinarily good (my favorite: 10 things I HATE about commandments (watch it twice and count the number of probable copyright violations the second time)), most is dreadful. As Cory Doctorow’s post makes clear, the RIAA has not said that they would pursue action again these sites or the consumers creating the content.

For the music industry, this is a not-so-golden oldie and the conflict illustrates the persistent gap between actual law and the public’s knowledge of that law and, frequently, perceptions of fairness. On these facts, far from being crazy or somehow a misuse of copyright, I think that music copyright holders have a straight-forward action against YouTube. To see that, we should start in 1917.

Music was sold as sheet music. You bought a copy of the song, gathered the family around the piano, and sang. Of course, you could take the same sheets of paper to your home or to anywhere else. Enterprising sorts did just that. Sheet music was played live at restaurants and hotels. Dinner and a song.

The 1909 Copyright Act assigned a number of rights to copyright holders. These included the right to print and make copies of the work; to perform the work publicly if the work was a drama; and, for musical compositions, to perform the work “publicly for profit.”

Be clear on what this means. Same piece of paper—sheet music—but different rights depending on use. I could buy sheet music and take it home and sing to my heart’s content, but I could not take it to my restaurant and do so without violating copyright if that counted as a public performance of the music for profit. Was it? Yes, indeed, said the Supreme Court in 1917, in Herbert v. Shanley Co., in a unanimous opinion authored by Justice Holmes. Eight years later, a federal appellate court reached the same conclusion for the new mass medium of that day, radio broadcasting.

These are not laws of nature. We could have a rule that said that anyone buying sheet music can use it in any fashion possible, at home or in a restaurant, on the radio or streamed from YouTube. Our original copyright law—enacted in 1790—didn’t say anything about music at all. This is a choice, a choice that some uses are different from others and that copyright holders can appropriately charge different prices for different uses.

The 1917 decision led to the creation of ASCAP—the American Society of Composers, Authors and Publishers. If restaurants playing sheet music are supposed to pay up, how does a song writer collect? ASCAP established an institutional structure—policing, licensing and distribution of fees—to make this work. This isn’t easy and can give rise to its own problems, as ASCAP and BMI, a parallel rights organization, are frequent antitrust targets (I discuss this here).

And what I have said is just a bare glimpse of the full complexities of this situation. I have focused on hosting services such as YouTube and musical compositions. I haven’t said anything about the individuals producing the content—do they face liability too or can they claim fair use?—or about the fact that a separate copyrighted work—the sound recording—is also in issue in these situations.

But this is how we pay for music in the real world: different uses, different prices, and until we change the law and come up with a better way to pay for music, you should assume that the music industry is going to show up one day and knock on YouTube’s door.

Comments

[Ed Felten]

Doesn't YouTube qualify for the DMCA safe harbor for content hosting services? If it does, then as long as YouTube responds properly to takedown notices from copyright owners, it's sheltered from liability.

[Randy Picker]

Happy to see that you survived the ski jumping. You did two more jumps than I would have.

This isn't about liability, this is about coming up with a business model that makes sense. Just as Victor Herbert undoubtedly wanted the restaurants to serenade their customers with his songs, the music industry should want kids lip-synching in YouTube videos. The question is how to come up with a compensation system to make that work.

So not notice-and-takedown--clumsy as it is--but ASCAP-style licensing. Keep the content up, but pay for it.

[Tim Lee]

Do you think that would work? The vast majority of these videos get a tiny, tiny number of viewers, so the revenue involved is likely to be trivial. And it's not likely to be feasible to charge users, so YouTube would have to pay the fees themselves. Yet to assign revenues, presumably somebody would need to watch each video and identify which copyrighted material was contained in each one. That by itself could cost more than the paltry revenue a video that's played by 100 people could generate.

It seems to me the music industry is likely to conclude that dealing with millions of extremely small-scale uses of their work isn't worth the bother. The transaction costs are too high. So instead, they're likely to prohibit small-scale uses and only deal with people who are willing to pay enough to make it worth the costs of negotiating a license.

Small-scale personal use, high transaction costs, minimal impact on the market for the original: this seems to me like a textbook case for applying the fair use doctrine.

[Tim Lee]

I should clarify that I'm not saying that it's necessarily fair use under current law, but as a matter of policy it seems to me that it ought to be.

[Cory Hojka]

Tim,

Since YouTube is able to rank material by popularity, personal ratings, etc., doesn't that seem to imply that it's not so hard for them to review the bulk of the most popular material for licensing issues? I think it would be very easy for a licensing agency to set thresholds here, below which they won't necessarily sue for usage, but above which the YouTube-like provider has an obligation to review and license.

In addition, do we necessarily need a human being reviewing each and every video? The ability of computer software to identify music samples through correlation isn't exactly infant technology anymore, though admittedly it is more difficult with visual images to use the same techniques effectively.

[Randy Picker]

Tim,

The ASCAP and BMI licenses are typically based on a percentage of revenues of the licensee. The key point there is that it means that we don't have to invest that much time tracking actual use.

Actually, no time needs to be invested tracking use vis-a-vis the licensee. Some time may be required to know how to divided the revenues among the copyright holders.

[Tim Lee]

It seems to me you've still got a needle-in-a-haystack problem. Unlike commercial settings where you can make the DJ or the club owner do the reporting, you're going to be hard pressed to get YouTube's users to label which videos have copyrighted content. Which means some ASCAP or YouTube employee is going to have to watch thousands of videos and then find and identify any copyrighted material in each.

The scheme could probably be made to work, but it could be quite wasteful if much of the revenue generated had to be spent paying people to watch videos.

[Bill]

O.K., all well and good, but is there any law that takes into account for copyright of ones own mind? For example, I have no control over whether I hear a song over and over again, but this song gets "copied" again and again into the space of my mind. How about that kind of copyright? I should be compensated for that use of my mind.

[Dan]

It seems to me that an online content license that places like myspace and youtube had to pay makes far more sense than what live music venues have to pay. The monitoring mechinism is built in to the internet(like it is with musak networks). Plays are tallied automatically. The plays are what the blanket license group bases it's payment on. For live music, it's just a guess, for a youtube video owned by an Ascap member, real revenues could be a reality based on the number of plays- As it should be: YouTube will profit from the display of this material, just like a restaurant profits by offering music and television in whatever form, just like television stations profit. Many artists are not paid directly by the purveyor of their property, but by the amount of plays that affect their share of the blanket license.

And bill, yes, if your brain is somehow magically displayed before the world as an original work owned by you, you should be compensated for its use by someone profiting from that work. In relation of course to the rest of the people in your brain display pool, of course. However, if you managed to distribute copies of those works in your head for a profit, you should have to pay the producer of that material.