Entertainment Industry

Category: YouTube

Why Google and music labels don't get along

Robert Levine, author of "Freee Ride," talks about why he thinks Google rubs music labels the wrong way
It's no surprise to Robert Levine that Google Inc. is having a difficult time making inroads with the major music companies.

Levine, a former executive editor of Billboard magazine, diagnosed it simply: "They have oppositional aims. And they come from completely different cultures. The combination is a recipe for antagonism."

The title of Levine's recent book, "Free Ride: How Digital Parasites Are Destroying the Culture Business and How the Culture Business Can Fight Back," gives readers a clue as to where he's coming from. In it, Levine argues that media companies, from news organizations to entertainment studios, were taken for a ride -- a free ride -- by technology sirens who sold them the line that on the Internet, "information wants to be free."

Levine, who lives in Berlin, is scheduled to give a talk Tuesday at USC's Annenberg School for Communication & Journalism on the subject of Google and how the Silicon Valley technology giant "benefits from the work of others."

We spoke with him more narrowly on Google's 18-month, thus-far-unsuccessful effort to work with music companies to secure the licenses for storing, selling and streaming songs through its myriad of Web services. An edited version of the conversation follows.

Why hasn't Google been able to get the music licenses it wants?

Levine: Labels are essentially suppliers, and Google wants to be a distributor. The labels want a high price. Google wants a low price. They have oppositional aims. That's just capitalism.

Fair enough. But isn't there also a cultural dissonance?

The labels are essentially in the business of investing in intellectual property. Goggle is entranced by the possibilities of technology. They’re into the idea of making stuff as widely available as they can. But they get caught up in the transmission of information, and they tend to forget how much it costs to create that information. It costs very little to transmit a song over the Internet. But it costs a lot to create it.

What about YouTube, which Google owns? There's a ton of content on YouTube that's produced very cheaply by users. And yet, it's a very big business.

If you look at the top 10 videos of all time on YouTube, eight out of 10 are professionally produced music videos. It shows you how important professional content can be. That's why Google wants to do deals with the labels.

Major music companies have been criticized for not being forward thinking enough and not innovating new business models. If so, aren't some of their financial problems of their own making?

People ask me, "Aren't the labels just being stupid?" The answer is, sometimes yes. But greedy and stupid people still have rights. Take my book, for example. If you think I am greedy and stupid, it doesn't mean you can download my book illegally. It's still stealing, no matter what you think of me.

Does that necessarily mean Google should be held responsible for the piracy that goes on? It's not as if Google equals the Internet and can control everything that happens on it.

People talk about the Internet as though it sprang full grown from the brow of Zeus, and it is what it is. It shouldn't be regulated. I don’t believe in technology determinism. Some say, if left to their own devices, people will essentially do good. In my view, people who believe that usually get mugged. You still need laws that defend your rights. 

OK, bottom line: Will Google eventually succeed with the labels?

The question is how do their interests coincide? Google needs great content. The labels are in this weird position because they are peasants who are also kingmakers. They play an important role in deciding which Internet companies dominate in the next 20 years. At some point, both will realize that there is a great deal of money to be had. All of a sudden, you will see them getting along very well.

-- Alex Pham

Photo: Robert Levine, author of "Free Ride." Credit" Jo Bayer.

YouTube records deal with Merlin, the fifth largest music label

YouTube Logo

YouTube has snagged a licensing deal with Merlin, a consortium of independent music labels that together represent 14,000 artists including The Prodigy and Aphex Twins. 

The deal lets musicians represented by Merlin receive royalties each time a YouTube user publishes an online video that uses all or parts of a song owned by a Merlin artist. 

Merlin is considered to be the world's fifth-largest record label, after Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI Group, which is now being auctioned off by its owner, Citigroup. 

YouTube, which is owned by search giant Google Inc., already reached similar licensing arrangements with the other four major labels. YouTube has also buttoned agreements with independent labels Merge Records and Beggars Group. Merge represents Arcade Fire and Spoon, and Beggars is Adele's label.

The world's largest online video site has been keen to wrap up all the necessary licenses with both music and movie rights holders. So far, it's had more luck dealing with the music industry. In August, YouTube settled a copyright infringement lawsuit with the National Music Publishers Assn., an organization that represents independent songwriters.

The company has not, however, had as much luck coming to terms with Viacom, which is suing YouTube and its parent Google for allegedly hosting copyrighted clips from its shows, including "South Park" and "The Daily Show." A federal judge last year ruled in favor of YouTube, saying the company complied with the law by removing offending videos when asked to do so by rights holders.

On Tuesday, Viacom asked the U.S. Court of Appeals in Manhattan to throw out the lower court ruling.


YouTube ends lawsuit with music publishers

Federal Court tosses out method for calculating music royalties 

-- Alex Pham

YouTube plays nice with video games

Game publishers have found a unlikely ally in YouTube.

The online video platform has become a key place not just to market games, but also to acquire new audiences and tap into a game-obsessed fan base who themselves generate millions of homegrown videos touting their beloved hobby.

Using a combination of traditional video ads and cut scenes from upcoming game releases, Electronic Arts Inc., for example, has garnered 560 million video views on YouTube -- 472 million of which were in the last 12 months.

That doesn’t count the views from videos that players create of themselves playing EA’s games, some of which feature tools that make it easier for people to record “brag clips” of their game-playing prowess or make funny mash-ups from edited game footage. One EA game, Spore, invited players to upload animations of fantastical creatures they created within the game. About 184,000 people did so, and their videos generated 25.5 million views, said Michael Herst, EA’s director of consumer marketing.

Machinima.com, a Los Angeles-based company that features professionally edited game footage, has accumulated 2.6 billion views from its YouTube channels, more than Lady Gaga.

And IGN Entertainment, a game-centric news and reviews site owned by News Corp., recently put its entire library of videos, about 70,000 pieces of content, on YouTube, said Bernard Ho, vice president and general manager of video at the San Francisco company.

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YouTube inks licensing deal with music publishers, ending lawsuit

Ending a four-year legal battle with over 3,000 independent music publishers, Google Inc.'s online video site YouTube has agreed to pay licensing fees with the National Music Publishers Assn.

The deal, which covers songwriting rights, paves the way for YouTube and Google to begin monetizing user-generated videos that contain music written by artists represented by the NMPA. The arrangement does not cover the four major music publishers owned by EMI Music Group, Universal Music Group, Warner Music Group and Sony Music Entertainment, each of whom has separate licensing contracts with YouTube.

"We are now going to be business partners in these videos, and we all get to share in that revenue," said David Israelite, NMPA's president and chief executive.

The contract with NMPA covers synchronization rights on behalf of songwriters. It includes, for example, videos that play covers of a licensed song. Under the deal, YouTube would share a portion of the advertising revenue tied to videos featuring licensed music. The terms of the royalty payments, however, are confidential.

At the same time, NMPA agreed to drop its class-action lawsuit against YouTube. Filed in 2007, the suit alleged that YouTube enabled infringement of songwriters' rights when the online video platform hosted videos that featured copyrighted songs.

Members of NMPA have until mid-September to decide whether they wish to opt out of the licensing agreement with YouTube or continue to pursue legal action against the video platform on their own.

Among the publishers that have not yet joined in the new licensing agreement is BMG Chrysalis, considered to be the fourth-largest music publisher in the world, with a catalog that includes works by Blondie, David Bowie and Michael Jackson.


Google Inc. in preliminary talks to buy Hulu

YouTube bolsters its movie rental service with 3,000 Hollywood titles

YouTube aims to expand movie service to compete with iTunes, Amazon

-- Alex Pham

Google Inc. in preliminary talks to buy Hulu

Google Inc. is in preliminary talks to buy online video pioneer Hulu, people familiar with the situation said.

Hulu has begun meeting with potential buyers including Google, Microsoft Corp. and Yahoo Inc. to drum up interest in a sale, said these people, who requested anonymity because the discussions are confidential.

The presentations to the potential suitors are a first step as Hulu's owners weigh whether to sell the site after having received an overture from Yahoo.

Hulu's financial advisors, Morgan Stanley and Guggenheim Partners, set up the meetings with media, technology and communications companies.

The technology heavyweights are seeking to capitalize on the widespread popularity of online video and position themselves to reach the growing number of viewers who watch television shows, movies and short videos on computers, mobile devices and Internet-connected television sets.

Hulu's rights to the current season’s TV shows have drawn interest from Google and Yahoo, in part because these popular programs have attracted more than 600 advertisers -- including such major brands as McDonald's, Johnson & Johnson and Toyota. Indeed, the site expects to bring in $500 million in revenue this year from advertising and proceeds from its Hulu Plus subscription service.

Google, which has had a testy relationship with Hollywood, is making a major push to add professionally produced content to its mix of user-created videos on YouTube. It has hired industry veterans to help the Internet search giant make inroads and strike deals.

Yahoo is crafting its own strategy of bringing more premium content to its popular portal. Microsoft has had success offering access to movie subscription service Netflix Inc., dominant sports cable channel ESPN and the Hulu Plus paid offering to users of its Xbox game consoles.

Key to all three potential suitors are Hulu's licensing deals for popular TV shows such as “Glee,” "Modern Family" and Comedy Central's "The Daily Show with Jon Stewart." The lure of these top-rated programs quickly vaulted the 3-year-old service to among the top destinations for online video, with some 28 million monthly viewers, according to the measurement firm comScore.

Two of the media companies behind the online video service, Walt Disney Co. and News Corp., recently renewed licensing agreements to make Hulu more attractive for a sale. Comcast agreed to give up NBCUniversal’s management control in the venture to get approval for its acquisition of a majority stake in the media conglomerate. Comcast is required to provide programming to Hulu on the same terms as the other owners.

But the new agreements may include provisions that would require users to prove they're paying cable or satellite TV subscribers before they can watch current episodes of shows one day after their initial airing. Otherwise, they would be forced to wait.  The agreements would remain intact if Hulu is sold.

A Hulu spokeswoman declined to comment. A Microsoft spokeswoman could not provide immediate comment. Google and Yahoo could not immediately be reached for comment.

A sale would allow Hulu's media owners to make a graceful exit from a service whose success nonetheless created friction with traditional business partners. Cable and satellite distributors complained about paying for the right to carry programs that Hulu offered free online. A transaction would also enable owner Providence Equity Partners, which put $100 million in the venture, to see returns from its its investment.

Janney Capital Markets analyst Tony Wible said he expects Hulu’s owners to seek the same valuation for Hulu that Netflix commands from investors, about $2 billion. Hulu earlier scrapped an initial public offering that some investment bankers said could have valued the company at more than $2 billion.

Technology companies may be willing to pay a premium to get the kind of original content that draws advertising from major brands, said Andy Hargreaves, an analyst with Pacific Crest Securities.

But Arash Amel, research director for digital media for IHS Screen Digest, says he isn’t sure how much of a premium. Google, Microsoft and Yahoo are not buying Hulu’s technology, so they would risk paying through the nose for shows when content deals expire, he said.

“If you had those deals for 10 years, OK, you have time to build a business,” Amel said. “But look at what they are trying to do to Netflix. They help you until you are successful then they want most of what you make or they try to kill you.”

-- Jessica Guynn and Dawn C. Chmielewski


Comcast has to sit on its hands while Hulu drama plays out

What's next for Hulu

 Yahoo approaches Hulu about possible acquisition

Hulu is popular, but that wasn't the goal

Photo: Hulu screenshot showing Stephen Colbert of Comedy Central's "The Colbert Report." Credit: Hulu

Google bringing movie rentals to portable devices

Fresh off its movie deal for online video site YouTube, Google Inc. said it will offer film rentals on Android phones and tablet computers.

Google announced Tuesday that it will begin renting thousands of movies, including "Harry Potter and the Deathly Hallows: Part 1" and the animated hit "Despicable Me" through the Android Marketplace (which is Google's version of the Apple iTunes store). Movies can be rented on home computers, then made available to watch on a tablet computers or mobile phones.

Verizon customers who own a Motorola Xoom tablet can begin renting movies directly from the device. In coming weeks, an update to the Android software will expand that feature to other devices.

Terms are identical to YouTube's expanded movie rental service announced Monday. Prices for newly released films start at $3.99; while older movies rent for $2.99 and up.

-- Dawn C. Chmielewski

Related stories:

YouTube bolsters its movie rental service with 3,000 Hollywood titles

YouTube aims to expand movie service to compete with iTunes, Amazon

YouTube bolsters its movie rental service with 3,000 Hollywood titles

Youtube-thumb Google Inc.'s online video service YouTube dramatically expanded its movie rental service Monday with the addition of 3,000 titles from major Hollywood studios, positioning it to capitalize on the growing number of Internet-connected televisions and portable devices.

Details are still emerging, but YouTube chief Salar Kamangar said in a blog post that the site's millions of users will be able to watch "full-length blockbuster films," trailers and behind-the-scenes extras. YouTube did not identify participating studios, but Sony Pictures Entertainment, Warner Bros. and Universal Pictures are all expected to offer their movies on the same day that the films are available on other on-demand services.

Other studios, including Paramount Pictures, 20th Century Fox and Walt Disney Studios, had been reluctant to join because of larger concerns that Google had not done enough to combat online piracy, according to people familiar with the matter.

YouTube, which has been propelled by the popularity of user-created short videos, has been adding more professionally produced content, including music videos, live concerts and sporting events. The service augmented its offerings with more long-form content as users showed a willingness to watch TV shows and movies on their Internet-connected phones and tablet computers.

The site began making movies from the Sundance Film Festival available for online rental early last year and offers a limited selection of movies to rent including the Weinstein Co.'s 2006 release  "Scary Movie 4" and the 2007 slasher flick "Saw IV." 

"Six years ago, there were just two types of video: video you watched on your TV and video you watched on your laptop," Kamangar wrote in a YouTube blog post Monday morning. "Today, there's increasingly just video and it's available everywhere: on a phone, a tablet, a laptop or a television screen."

Kamangar wrote that the addition of more Hollywood movies helps position YouTube for the day when the distinctions between online video and other forms of video -- say, television programming -- disappear. Some 27 million Internet-connected TVs shipped worldwide last year, and the number is expected to grow exponentially to 49.2 million by the end of 2011, according to researcher iSuppli Corp.

-- Dawn C. Chmielewski




YouTube awards cash, schooling to budding videographers

Zach King Thumbnail
Even as Google Inc.'s YouTube works to secure newly released Hollywood films for users to rent, the dominant online video site is cultivating a promising crop of amateur videographers through funding and professional training.

YouTube identified 45 users, among thousands of entrants, to participate in a pair of programs designed to support original content creation. YouTube says some 35 hours of video are uploaded every minute, driving billions of views every year. To keep YouTube as a launching pad for new talent, it has begun this program of funding, education and promotions.

Twenty people were selected to participate in YouTube Creator Institute, where they will gain new-media training at either the USC School of Cinematic Arts or Columbia College Chicago. Another development program, YouTube NextUp, awarded $35,000 each to 25 creators to help advance their work on YouTube.

Zach King, a 21-year-old film student at Biola University, said he would use the cash he received from the NextUp program to develop a series of short films that focus on storytelling. His award-winning submission, "Contest Entry Gone Wrong,"  relies on special effects -- he appears to dodge an assault by airstrikes and groundfire as he calmly pleads his case to be selected for the YouTube award.

"I started my channel two years ago, FinalCutKing, I started posting video tutorials," King said. "I recently turned to posting cool videos, doing digital effects."

One video in particular, in which King seems to be demonstrating a fictional "hologram setting" on his new Apple iPad 2, attracted notice. "That's why we decided to enter a special-effects video on YouTube," he said of the video shot with his friend, Aaron Benitez. "It was different."

-- Dawn C. Chmielewski

Photo: Zach King from his video, "Contest Entry Gone Wrong."  

YouTube to require 'tutorials' for copyright offenders

Google Inc.'s online video behemoth YouTube toughened its enforcement of copyright laws, requiring violators to attend "copyright school" and pass a test before they can resume uploading videos to the site.

The changes come amid calls -- both in Hollywood and in Congress -- that YouTube do more to combat piracy. Google General Counsel Kent Walker recently defended the search giant's commitment to content protection in testimony this month before the House Judiciary Committee's subcommittee on intellectual property.

Under the new rules, YouTube users who receive notice that they used someone else's content without authorization must attend "YouTube Copyright School,"  which entails watching a tutorial and passing a quiz to demonstrate they understand the rules governing content. YouTube also created an online resource center to help educate YouTube user about the nuances of copyright law.

"Because copyright law can be complicated, education is critical to ensure that our users understand the rules and continue to play by them," YouTube wrote in a blog post Thursday notifying users of the new policy. "That’s why today we’re releasing a new tutorial on copyright and a redesigned copyright help center. We’re also making two changes to our copyright process to be sure that our users understand the rules, and that users who abide by those rules can remain active on the site."

YouTube suspends users who have received three notices of copyright violation. Under the new rules, longtime YouTube content creators, who have uploaded "thousands" of videos but nonetheless receive a third strike, can avoid suspension if they successfully complete the copyright school and demonstrate "good behavior over time."

Christopher J. Dodd, the new head of the Motion Picture Assn. of America, the industry's lobbying arm, issued a statement applauding Google's recognition of copyright problems on YouTube -- and calling on the search giant to do even more to deter Internet piracy. 

"To help demonstrate whether its new program is effective, we would hope that Google shares the data regarding its impact on repeat infringers as well as details on the speed in which it takes down illegal content found on its sites," Dodd said in a statement. "We also hope that Google will now take long overdue steps to address its role as a search engine in providing priority listings and rankings for rogue sites offering stolen movies and television shows."

YouTube has had a Content ID system in place since 2007 that scans videos as they are uploaded to determine whether it is someone else's copyrighted work. If the system finds a match, YouTube follows the rules the content owner has put in place to determine what to do with the new video -- whether to block it, track it or attempt to place advertising against it and share the revenue.

-- Dawn C. Chmielewski and Richard Verrier

YouTube launches summer "creators" program with USC, Columbia College of Chicago

Yearning to become the next "Fred?"

YouTube has formed a partnership with the USC School of Cinematic Arts and Columbia College Chicago to offer a series of new media classes for budding YouTubers to hone their creative skills.

The newly launched program, dubbed YouTube Creator Institute, will begin offering courses this summer that touch on various aspects of digital media, from developing story arcs and cinematography, to making money and employing social media to build audiences.

The YouTube-USC program will run May 25 to June 22 in Los Angeles. Columbia College's institute begins May 31 and ends July 22, and will be housed in the school's television department in Chicago. Each will accept 10 students.

-- Dawn C. Chmielewski



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