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Google Trying To Pay Off Big Entertainment Companies To Leave YouTube Alone

from the bad-ideas dept

Fri, Dec 1st 2006 6:16pm — Mike Masnick

Google is apparently looking to continue the practice of paying off entertainment companies to agree not to sue YouTube, apparently dangling fees of over $100 million to various well-known entertainment companies. The agreement is structured as a "licensing" deal, and the companies would agree not to sue Google over YouTube and give Google about 3 years to figure out how to get the model right. As the article notes, it's an intriguing deal for the entertainment companies, who can't easily pass up $100 million for doing nothing. But, they're also worried about the precedent it sets and the "loss of control" over their content. To be honest, this seems a little backwards. They've already lost control over their content, and no amount of trying is going to get it back. The more worrisome thing is the worry about the precedent that is being set on the other side, by Google. It's great that they're trying to work out some sort of model to get the entertainment companies off their back, and they certainly have the cash to do so, but it opens up a huge list of potential problems. What about smaller and mid-sized firms? Why does Google get to pick who gets compensated? And, once the big entertainment firms are getting compensated, what's to stop the independents or even the amateurs creating content for the site from asking where their cut is as well? While it's understandable that Google might not want to go through a huge legal battle over this (even if the law is probably on their side), setting a precedent of paying people off to leave them alone is only going to attract more attention and more lawsuits from others who want their cut.

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32 Comments

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Anonymous Coward, 1 Dec 2006 @ 6:36pm

Buying YouTube was the biggest mistake
Buying YouTube was the biggest mistake that google has made...
[ link to this | view in chronology ]
Allan, 1 Dec 2006 @ 7:06pm

Buying YouTube
How is that?
[ link to this | view in chronology ]
Anonymous Coward, 1 Dec 2006 @ 7:22pm

The quickest way of ending a war is to lose it.
[ link to this | view in chronology ]
thinlizzy, 1 Dec 2006 @ 8:25pm

Google paying protection
this smacks of people paying gangsters protection money in order to get left alone. Buying Youtube may or may not have been a good investment, but this is NOT a good idea. Now that they've let this genie out of the bottle, they are going to end up being sorry when everybody else starts looking for their cut. Besides its wrong in principle, but since when did principle and capitalism ever have anything to do with each other?
[ link to this | view in chronology ]
- Djehaan, 2 Dec 2006 @ 8:15am
  
  Re: Google paying protection
  but since when did principle and capitalism ever have anything to do with each other?
  
  Since always if you ask me. That is part of the reason Google and AliBaba are so popular now. I must admit that is sometimes have doubts about Googles "Do no evil" lead by example policy
  [ link to this | view in chronology ]
The Dukeman (profile), 1 Dec 2006 @ 8:46pm

Still waiting for YouTube to be useful for cover b
I have a cover band and registered on YouTube with a musicians account. After the deal between Time Warner and "GooTube" was announced, I contacted YouTube to see if we would now be able to share audio and video clips of us performing copyrighted songs using their service. I included a list of possible songs and also requested information on which songs might be available for us to post as a result of this "licensing agreement". The response was the same old diatribe about me accepting the risk of being sued for copyright infringement. Blah, blah, blah! In other words, the "deal" is useless to the users of the service.

Just because others choose to ignore copyright laws and post copyrighted material without compensating the rights holder, that does not mean I will do that, especially since a licensing deal is in place that should allow that very thing to occur legally. The existence of a licensing deal implies the right to post the content. A deal for the site to not be sued is in no way a deal for me not to be sued. Until the "licensing" deal applies to the users who will actually post the content, it in effect does not exist.

If Google hopes to sustain the site long term it will have to make the service legal for legitimate users. I guarantee that my little cover band will do nothing to dent retail CD sales. It's more likely we could increase sales of CDs of the original artists when poeple get reminded of their favorite songs and want to hear them in their cars and at work. Google's use of context sensitive ads such as what is in place in Gmail and on Google Search could make this site a viable business model.
[ link to this | view in chronology ]
Jesse, 1 Dec 2006 @ 9:51pm

Covers
Dukeman: Google gives you the boilerplate because they are not your legal council. I found that http://cdbaby.net/dd-covers is a good resource for figuring out how to obtain a mechanical license or DPD license. The Harry Fox Agency makes it really easy, you can purchase DPD licenses online.
[ link to this | view in chronology ]
- The Dukeman (profile), 2 Dec 2006 @ 12:18am
  
  Re: Covers
  Thanks for the link. However, my band is not a business. It is a hobby. Instead of a legal payola, which is what Google's deal amounts to, what is needed is a venue paid license fee, such as hotels and private clubs pay (through MPAA). These venues (the legal ones) pay the license fees so bands can play there, and attract customers for their cash cow, beverages. Functionally and as businesses, Google Video and YouTube are basically the same type of venue, albeit in a different media. The attraction is entertainment, and the products are whatever the context sensitive ads would be hocking. Likely audio CDs, blank media, musical instruments, and the like for viewers of a cover band's content. Maybe even black lights and posters. Google is already money ahead in that they don't have to pay the bands (except the ad revenue sharing deals YouTube made early on).
  [ link to this | view in chronology ]
STJ, 1 Dec 2006 @ 11:43pm

Well, Google has set a pattern. I hope any singer with any songs/music on Utube will threaten to sue, then demand just a much money as the big companies. If they say no ask them why they are paying off others and not you to.
[ link to this | view in chronology ]
Dr. A, 2 Dec 2006 @ 12:16am

20/80
One must have figure it that 90 % of youtube content commes from 5 % copyright holders. Now if you settle for 90% of the content go stay, you can always take off any of the 0.001% when asked to. The bet is: the ones with 0.001% willl hope to get famous and keep their content online so you get over the pain in the *ss by paying off just a bunch of guys.
[ link to this | view in chronology ]
MEOIP, 2 Dec 2006 @ 5:45am

I hope over time a form of copyright like the CCEL (used in Christian churches) to sing and record copyrighted songs will become available for people to post cover songs or video with songs up on youtube.
[ link to this | view in chronology ]
GetSued, 2 Dec 2006 @ 6:10am

Time for the reaper to reap
I think its time for Google to get sued to be honest. You can't expect a company that big to not make a mistake. A nice legal battle will show the world just how screwed up the whole copyright debacle is. Not to mention, Google is getting way to big for the gov't not to take a piece of that pie!! Man you gotta love America! :-)
[ link to this | view in chronology ]
- Anonymous Coward, 3 Dec 2006 @ 1:10pm
  
  Re: Time for the reaper to reap
  You really have no idea, do you? Google gets sued ALL the time in tens of different countries. Its like saying "its about time high tech companies started outsourcing to India."
  [ link to this | view in chronology ]
Stu, 2 Dec 2006 @ 8:38am

Google has soooo much money, that they can lose sight of the real issue.

Paying blackmailers is never a solution.
[ link to this | view in chronology ]
thinlizzy151, 2 Dec 2006 @ 9:18am

RE:capitalism's inherent lack of principle
Let's see: J.D. Rockefeller, Jay Gould, Enron, WorldCom, Tyco, the S&L meltdown, Yahoo caving into the Chinese govt, Google wasn't much better, the telecoms handing over whatever the Bush admin asked for, HP, the list goes on ad infinitum. Capitalism is just SO VERY PRINCIPLED!
[ link to this | view in chronology ]
- Anonymous Coward, 2 Dec 2006 @ 2:49pm
  
  Re: RE:capitalism's inherent lack of principle
  Let's see: J.D. Rockefeller, Jay Gould, Enron, WorldCom, Tyco, the S&L meltdown, Yahoo caving into the Chinese govt, Google wasn't much better, the telecoms handing over whatever the Bush admin asked for, HP, the list goes on ad infinitum. Capitalism is just SO VERY PRINCIPLED!
  
  Let's See: Stalin, Lenin, Hitler, Pol Pot... The world of 'socialism' is so much better, yes!
  [ link to this | view in chronology ]
Don Dodge, 2 Dec 2006 @ 9:23am

Google is gambling billions - for what?
Are deals with the major studios really necessary? What makes YouTube special? Is it just "time shifting" and "space shifting" of video? Of course not. There are much easier ways to do this with VCRs and DVRs. YouTube is special for all the funny, unusual, bizarre video clips...most of which are 2 minutes or less. YouTubers are not craving half hour episodes of Desperate Housewives or any other network show. They want short compilations of the funniest moments. They want out-takes, bloopers, candid outbursts, people behaving badly, girls gone wild, etc. Having all this crazy stuff categorized, searchable, in bite sized chunks, and available on demand is what makes YouTube special. Does YouTube really need the TV/Movie deals? Rather than spend $Billions on licensing this stuff, why not spend a few million on a lawsuit and establish legal precedents? I wrote an in depth blog on this subject today at http://dondodge.typepad.com/the_next_big_thing/2006/12/google_raises_t.html
[ link to this | view in chronology ]
IANAL_But..., 2 Dec 2006 @ 10:32am

Will the Artists Sue the Music Companies?
I don't see why the artists don't sue the media companies for failing in their fiduciary obligations to the artists. This just looks like a big scam where the media companies are accepting huge bribes to look the other way. Kind of like if you hired a security guard to watch your property but then he took bribes to look the other way while burglars made off with all you stuff.
[ link to this | view in chronology ]
PhysicsGuy, 2 Dec 2006 @ 10:48am

Re: Google is gambling billions - for what?
your assessment of youtube viewers is one i used to share. i, presumably, watched youtube for the same reasons you do. my one word of advice: there are an enormous amount of youtube viewers, it's wrong to assume they all watch it for the same reasons you do...
[ link to this | view in chronology ]
rishi, 2 Dec 2006 @ 1:16pm

I feel that the practice of paying off entertainment companies by Google is something that goes against their motto "don't be evil".

This and the China thing are the few blemishes of Google.
[ link to this | view in chronology ]
Axl Ward, 2 Dec 2006 @ 6:50pm

The article missed the point
Google is not 'paying off' the big entertainment companies. They are engaged in a business deal that they hope will eventually lead to a profit. They are licensing the popular, copyrighted content to attract new users to youtube.

Currently, youtube features the little two minute clips of normal people doing stupid stuff. Google expects the quality of the user created content to get better and better, and to eventually launch Internet TV. So, as they sift through the million videos of girls dancing to 'My Humps' and guys getting hit in the nads, just so they can find the next "It's always sunny in Philadelphia", they need to attract their desired demographic. Hence, the licensed content. Lawsuits are not really the issue.

Also they are not worried about the smaller firms filing lawsuits, because youtube actually benefits the smaller, lesser known content providers. Youtube provides exposure for folks who might never get a shot. The same is not true for "Desperate Housewives," for example. ABC does not need youtube to promote their shows. However, having "Desperate Housewives" or "The Daily Show" helps draw users to youtube, even if it's just the ones that don't have DVRs and forgot to program their VCRs.

That's how I see it, anyway.
[ link to this | view in chronology ]
AndrewG, 2 Dec 2006 @ 9:01pm

First people don't want Youtube being taken over by big corporations and advertisers.....now they don't like it when Google pays them off so they can have some valuable time to figure out a way that the owners of the content and the Youtube users can both co-exist peacefully.

There will always be critics but unless you were in a Google corporate meeting or talked to the CEO lately it's pretty lame to accuse either side of anything.
[ link to this | view in chronology ]
Anonymous Coward, 2 Dec 2006 @ 10:50pm

Google is not 'paying off' the big entertainment companies. They are engaged in a business deal that they hope will eventually lead to a profit. They are licensing the popular, copyrighted content to attract new users to youtube.
I thought they said it was _not_ a licensing deal.
[ link to this | view in chronology ]
- Axl Ward, 3 Dec 2006 @ 3:31pm
  
  Re:
  Anonymous Coward wrote:
  "I thought they said it was _not_ a licensing deal."
  
  According to the article:
  "Google calls these monies licensing fees, according to executives who've been involved in the discussions."
  
  So I think my hypothesis still stands.
  [ link to this | view in chronology ]
  - Anonymous Coward, 4 Dec 2006 @ 7:00am
    
    Re: Re:
    According to the article:
    "Google calls these monies licensing fees, according to executives who've been involved in the discussions."
    
    So I think my hypothesis still stands.
    
    I think AC was referring to the first link to another Techdirt article,
    that said "The deal was an investment, not a licensing agreement, meaning all that cash the labels got they don't actually need to share with the artists they always claim they're trying to protect."
    [ link to this | view in chronology ]
Andrea Little, 3 Dec 2006 @ 7:20am

plister pakc related injuries
Just this week while attempting to open a deadly blister pack, i stabbed myself in the stomach. I may have been holding the x-acto knife at the wrong angle but if you cannot open an impenetrable package with an extremely sharp knife-type device, then it should not be packaged that way!
[ link to this | view in chronology ]
|333173|3|_||3, 4 Dec 2006 @ 6:15pm

I have noticed that sometimes posts appear to be in the wrong topic. I don't know if this is a problem with the board or a PEBKAC error.
[ link to this | view in chronology ]
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