YouTube Ordered To Pay $1.6 Million To ASCAP
from the making-sausages dept
You may remember last year around this time, a district court set a totally arbitrary royalty fee that AOL, Yahoo and RealNetworks had to pay ASCAP for music streamed over their services. Reading through the details of the decision was immensely troubling, because it seemed to calculate the amounts on a somewhat meaningless formula based on taking a percentage of revenue from the companies that had absolutely nothing to do with music itself. Basically, it looked at almost any revenue that somehow sorta kinda touched on music (including search) and included that as part of the calculation process. Recently, ASCAP and Google went through a similar case in front of the same district court to determine just how much Google has to pay ASCAP for all the music streamed on YouTube. To be honest, I'm still not sure why it makes sense that Google has to pay anything for this, but that's one of the oddities of modern copyright law.While the decision hasn't received much press attention, last week, the court ordered Google to pay $1.6 million to ASCAP (thanks to Eric Goldman for sending me the decision). The court seemed to take a "split the difference" approach, as ASCAP had asked for $12 million for all music streamed between 2005 and the end of 2008 (and another $7 million for 2009). YouTube, in response, had suggested $79,500 for 2005 through the end of 2008 and then $20,000 per quarter ongoing. The court rejected both proposals, and dinged both companies for weakly supporting their positions, or being somewhat misleading in their assertions. Google, for instance, tried to focus on the number of "music videos" as compared to the total number of videos on YouTube, though the court noted that the music videos seem to get a lot more views than many of those other videos, and it doesn't take into account the time spent viewing each video. ASCAP basically said: "just take that formula you used last year for AOL, Yahoo and Real and apply it to Google revenue."
The court, instead, went into a lengthy justification of trying to come up with a "fair" proposal, involving an awful lot of redacted information on YouTube's revenue (though... if you work through all the numbers you might be able to piece back together some revenue info) and eventually came up with $1.4 million for 2005 through 2008, and then $70,000 per month afterwards, which, when added to the additional fees this year, brought it up to $1.61 million to date (and counting). Of course, this is all supposed to be a temporary sort of thing until the two sides can work out an agreement on their own -- but given the vast differences in proposals (as the court noted, ASCAP was asking for a rate 150 times as large as YouTube's proposal), it doesn't seem like the two sides are close.
Either way, reading this ruling as well as last year's ruling shows what a total mess this process is. Basically, ASCAP gets to go in and demand cash from anyone who benefits from music anywhere, and a judge sorta randomly makes up reasons to give them cash. I know that ASCAP supporters will claim that the money is for songwriters, not the record labels, and it's important and blah blah blah. But the whole system of such collective licenses is a mess that it makes it close to impossible to do anything with music without getting yourself into a huge licensing hole. For more than a century now, Congress and the courts seem to look at every innovation and simply slap another license fee on it, and leave it to the courts to sort out any mess. All of these license fees add up to a massive tax on innovation that divert money from good business models and into the hands of collections societies, who siphon off a piece and often don't do a very good job distributing that cash. It's a massively inefficient model that's simply not needed.
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Filed Under: copyright, court, rates, songwriters, streaming
Companies: ascap, google, youtube
Reader Comments
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I would...
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Re: I would...
God yes! Sharp shiny things to the rescue!
Actually, yes, that's a very good idea.
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Re: Re: I would...
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Re: I would...
Yes! I call for a more relaxed grip on ALL money, everywhere!
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What is...
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Re: What is...
http://lmgtfy.com/?q=ascap
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Re: What is...
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Seriously
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Collection Society Siphoning
No fees for them asshats.
They deserve nothing.
No matter what somebody wants to do in life, there is a way to make money doing so. Having a government mandate to have money handed to you isn't fair to the rest of the world. Get a job.
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Re: Collection Society Siphoning
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Re: Re: Collection Society Siphoning
I will just go run and hide now then.
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Re: Collection Society Siphoning
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...and that's why
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Re: ...and that's why
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What for?
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Re: What for?
We should put them all on an island of their very own and let them litigate themselves to death...
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Re: Re: What for?
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Re: What for?
.. as opposed to actually purchasing it ..
everyone wants something for nothing, yet cry calamity once the well dries up XD
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Google's fault.
All the limitations on YouTube are only going to slowly, but surely, push consumers further away from the service. I wanted to share an SNL clip on Facebook, but YouTube removed it due to copyright infringement. So, I went to DailyMotion instead. Knock one down, another will rise in its place.
It's almost like record labels, TV networks and movie studios don't want fans.
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Re: Google's fault.
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Re: Google's fault.
DJ wrote:
True whichever way you look at it. :)
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I would ...
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Re: I would ...
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Re:
Uh, I'm in favor of neither.
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the reason music video's get more views
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ASCAP is the enforcer
For this, they have radio receivers hooked to song recognition systems in each town listing for what is played. But how do they snoop what is played on youtube?
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Re: ASCAP is the enforcer
You may be confusing ASCAP with SoundExchange, which collects for the labels. ASCAP collects for the song writers and publishers.
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Re: Re: ASCAP is the enforcer
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This will help drive a business transition
ASCAP may now want You Tube to be successful. For the music industry to figure out the Internet, they need to perceive that some portion of their success is tied to it.
The irony would be if someday ASCAP is driven to argue for You Tube and against newer competitors to protect its court ordered revenue flow!
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I Quit
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Must Pay Asshat
But then I wasn't far off
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Fair's fair...
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Re: Fair's fair...
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Re:
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Re: Re:
Looking at a single entity and saying that it is "losing millions" is myopic. Sure, it would be nice to find a way for that one technology platform to earn more than it costs, but if it drives revenues in other areas it isn't fair to label it as nothing but an expense hole.
I bet if Google decided to recoup that "million dollars a day", it would cost them dearly.
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Re:
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Re: Re:
Fair enough, but then the artist should also have to pay the creators of YouTube if they wish for their work to remain up for popularity's sake, since they would be using the product, which is the platform, which ALSO makes money for Google and, through popularity and exposure, the artist.
Or we could just call it even, waddya say?
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no losers, no victims
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Re: no losers, no victims
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ASCAP is . . .
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Re: ASCAP is . . .
Logical fallacy: claiming that this is the only way you could make money/write more music. If that crutch of a collection society weren't there, there are many other ways to make money.
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yeah, right.
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Re: "Does anyone really think ASCAP is going to distribute 1.6 million?"
SESAC, another performance rights organization, is a for profit organization and does not have to disclose their finances.
What is funny though, from all of the music artists I know, SESAC pays quicker and more money to their artists. They are, however, a smaller and more select PRO.
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WHO is the Court?
These may all seem trivial questions, but I just want to understand these rulings with a broader perspective.
Any links or explanations would be helpful.
[Leave all your snide comments at home, just trying to learn something.]
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Money In Their Pockets
I said years ago when they started going after people/groups that they wouldnt stop until they had ruined the industry. Going after royalty monies from internet radio, mainstream radio, websites that play videos is only the start.
Soon they will go after websites that sell music. Mark my words today. If a website uses music in any way, shape or form they WILL eventually go after them.
And in the end only hurting or killing off the market they are attacking!!
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ASCAP
I'm a composer, I work freelance, and my family and I depend on ASCAP to collect money from the use of my music - surely that seems fair. Calculating the value of music, or any other content, is nearly impossible, but the internet is a free-market of ideas and if the price of some commodity, like music, is too great it's easy to use less of it, or for users to make it themselves.
I assume those who describe YouTube as an "innovation" will agree that its use of old, pre-existing music and old, pre-existing video is hardly that. It really should be about making something new, and I encourage you ask:
What does old music have to do with innovation?
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Someone ends up getting hurt!
But when it effects the industry and only hurts it, thats not logical thinking. It is the thoughts of someone that doesnt have your interest at the top of their agenda.
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Licensing/Copyrights
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ASCAP
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Well, Mike, Wrong Again
ASCAP operates under a consent decree mandated by the
Department of Justice.
Under the terms of the decree, ASCAP must license its catalog to anyone - or any organization - that requests a license.
Once the request is made the requesting party is licensed and may immediately use the music in the ASCAP catalog subject to the requirement that they immediately enter into negotiations regarding the fees to be paid. If the fees can't be agreed upon, the consent decree requires that the parties must have the rates set by a rate court.
YouTube requested a license ... negotiations were entered into, but, the parties could not agree upon a fee.
A rate court proceeding was convened.
The proceedings are exactly the same as in any other court. Evidence is gathered and presented and witnesses are called to establish each sides position in the matter. Then the judge, after carefully taking everyone's point of view under consideration, comes up with the rules to be followed and the fees to be paid.
The proceedings can become quite lengthy and intense - not to mention costly - but one thing is without doubt - the results are never because the judge "sorta randomly makes up reasons to give (ASCAP) cash.
The very first order of business is always to determine whether ASCAP is due anything pursuant to the U.S. Copyright Law. Nothing proceeds unless the answer to that question is 'yes.' Of course, YouTube knew the answer at the outset or they wouldn't have requested a license.
To head off what would have been an appropriate discussion on this list, you state, "I know that ASCAP supporters will claim that the money is for songwriters, not the record labels, and it's important and blah blah blah ..."
Well, just so you won't be disappointed, the money collected by ASCAP is for songwriters, not the record labels, and it's important and blah blah blah ...
Why are you always so dead set against paying anything to anyone who creates music? Your message is always that artists, musicians, songwriters are such worthless human beings that don't deserve to be paid for their innovative creativity.
Google is a business ... writing music is a business ... ASCAP is the agent for those who are in the business of writing music ...
Google is a huge business using its might, muscle and money to trample everything in its sight - little guy, big guy any guy that gets in their way ... The use of other peoples music (without paying) has been a huge part of their success story ... However, in the case of songwriters, they have acknowledged - by requesting a license - that something is due the creators of music who are mostly small, independent business people.
So, it was Google that preferred to have a court determine what that payment should be rather than entering into productive negotiations with the writer's agent, ASCAP.
The procedure is well defined by the Department of Justice ... The way to a resolution was clear ... there is nothing at all messy or inefficient about the process as you suggest.
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ASCAP
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Rediculous
This is true.
ASCAP is contacting people (I was) and saying they need to get a license for embedding YouTube videos. They claim any website is "helping" the transmission of their materials even if the website in question hosts or streams nothing. They claim every website needs a $340 license even though the primary purpose of the website may be about something different than music and the video(s) may not contain any music whatsoever by any of their represented artists. Oh, and if you make money from your website that has videos on it, they want a proportion of that as well and have a calculation to determine it based on your total page impressions.
They use page impressions since one naturally has no idea what videos are played how many times and what music may or may not be in them besides the creator and publisher.
Mike is right in their crazy calculation. Let's say you embed a Hulu video on your website. ASCAP will ask for a $340 "New Media" URL license from you because that video "may" contain a piece of music work from one of their clients and they will take you to court to get money regardless of whether there was or wasn't.
They will agree that the video creator and/or publisher has most likely already paid a licensing fee to use the material in the piece of work but they now want money from any website embedding the video.
So what's next? I assume BMI and SESAC will also come and demand a free payment from websites who have any kind of video embedded because it may or may not contain some sort of music by someone they may or may not represent.
Somebody needs to stop the madness.
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My way or.
There are ways to make you very difficult to find on the internet and encrypting your hard drive in such a way that the hard drives turns into Zero's upon tampering.
and since =))))) I dont do anything illegal ever I dont get any papers because little do they know im actually on the West coast right now.... well actually on the east now... wait... hehe
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The adult answer is..
Musician's will make their living how? It's hard enough getting music good enough to record, raise the money to record it, find an audience who appreciates it and then what? Have someone draw a million hits or billions on their website and their mad because they have to pay? Maybe it's the artists that should go on strike, remove all music from radio, tv, film, and the internet and let's see what a great world that would be???
I thought the suit against youtube should have been easily in the hundreds of millions. How many thousands of musicians and songs do they have to split the revenue with? 1.6 million divided by 100,000? equals $16 per musician (or song) for 4 years of royalties. Yeah you're right, ASCAP sure is a mean one, looking out for the rights of those who actually own the material.
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Everyone have a point...
Regards to all,
Nica | College Papers
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youtube used to be fun
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Like Suing MTV in The 90's
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hi
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review
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Tiring
Youtube is now almost as popular as free to air tv(just a guess), stands to reason that they probably should pay performance royalties.
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Web Designer in karachi
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that is good
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