[A2k] Music industry and amateur videos story

[Manon Ress]

Surge in Online Video Challenges Music Industry
On YouTube and Other Sites,
Amateurs Ignore Copyrights;
Lip-Synching to *Nsync
By KEVIN J. DELANEY and ETHAN SMITH
June 10, 2006; Page A1

The music industry is grappling again with how to protect its
copyrights on the Internet, as amateur videos featuring commercial
songs flood the Web.

Some of the most popular videos on sites such as YouTube and Google
Video show amateurs lip synching to music by the Backstreet Boys,
*Nsync and other pop artists. Many home-videos posted on such sites
include songs as soundtracks, as well as snippets of concerts
captured by music fans with their cellphone cameras. Virtually all
this material is put online without securing permission from the
owner of the rights.

The concerns have taken root as the popularity of video sites --
which allow users to post their own and view others' videos -- has
exploded, thanks in part to the spread of high-speed Internet
connections and the rapidly expanding amount of amateur and
commercial content online.

One of the most popular video sites, YouTube Inc. of San Mateo,
Calif., was founded only in February 2005, but has seen its traffic
increase dramatically. Each day, YouTube says, consumers upload more
than 50,000 videos to its site, and watch its online videos more than
50 million times. Companies including Google Inc., Yahoo Inc. and
CNET Networks Inc., have gotten into the act too.

But with the videos attracting millions of users -- and a rising
amount of advertising revenue -- some in the music industry are
debating whether to attempt a crackdown. At a May meeting of the
Recording Industry Association of America, the industry's main trade
group, the world's largest music company, Universal Music Group,
pushed for an aggressive stance against amateur videos using
commercial songs.

For now, the strongest option on the table appears to be sending
legal notices to video-sharing sites advising them to remove
copyrighted songs, according to people familiar with the discussions.
Lawsuits have not yet been raised as a serious prospect. Some
executives say they remain more concerned about issues like pirated
professional music-video content and the online sharing of music
files that remains rampant.

But concerns about music in amateur videos could come to a head as
Internet companies begin generating significant revenue from the ads
displayed alongside them. The music industry's considerable legal and
commercial firepower, if wielded, could make it harder for those
companies to raise financing, attract advertisers or cut business
deals. Among other things, record companies also have commercial
relationships around the distribution of music videos with many of
the Internet players. The music industry could try to leverage those
relationships to get the video sites to crack down.

Some predict that the industry will sharpen its focus on the issue as
ad revenue grows. "When it gets big enough, they will go after it,"
says Gerd Leonhard, CEO of Sonific LLC, an Alameda, Calif., digital
music licensing startup.

The National Music Publishers' Association said in a written
statement that it is "concerned about sites that are deriving profit
from unlicensed use of music." The trade group added that it would
"monitor the situation."

The video sites say they're on firm legal ground, and very different
from the file-sharing companies, such as the original incarnation of
Napster, that music labels have targeted previously. YouTube and
others remove any infringing content when formally requested to do
so, under a recognized procedure that some legal experts say protects
them from liability. Some sites also post warnings that uploading
videos containing commercial music without permission can violate
copyrights, and say they plan to offer libraries of licensed music
that consumers can legally use in their videos to discourage
infringement.

Generally Protected

Some legal experts say the video sites likely are generally protected
as long as they comply with any so-called take-down notices sent by
music companies asking them to remove videos containing their songs.
That approach, outlined in the Digital Millennium Copyright Act, is
how the sites generally handle copyrighted video. "As long as the
sites are complying with letters being sent it's going be hard for a
court, under existing law, to shut down the services," says Daniel
Harris, an attorney and global head of the intellectual property
group at Clifford Chance in Menlo Park, Calif.

Still, the tension underscores the sometimes unexpected consequences
as the Web blurs the line between private and public content,
allowing consumers to post home videos to audiences of millions with
a click or two. It also raises questions for the music, TV and film
companies, which want to keep tight control on their products while
capitalizing on any sales-boosting buzz they can get.

"There are a lot of questions about whether a quality remix of
background music with good video imagery is positive publicity" for
the music companies, says Jason Zajac, Yahoo general manager of
social media. "It definitely has not been nailed down and I think
even the music industry's views will evolve over time."

In the battle against file sharing, music companies have taken a
strict approach, suing individuals and Web sites linked to copyright
infringement. But such legal campaigns are costly and can negatively
affect public opinion.

This time around, in a philosophical shift, some in the industry are
seeking instead to reach business arrangements before issuing legal
threats. Both Warner Music Group Corp. and Universal Music, a
division of Vivendi Universal SA, are exploring a variety of
possibilities with YouTube and others, including sharing any revenue
from ads displayed when their songs are playing.

"They're definitely concerned about their rights. We are too," says
Chad Hurley, chief executive of YouTube. "But the discussions are
revolving around the opportunities."

Recording-industry executives say they were encouraged to see YouTube
and other video sites recently enter negotiations with Broadcast
Music Inc. and the American Society of Composers, Authors and
Publishers, which collect royalties on behalf of songwriters when
their music is played in public or broadcast. Both Ascap and BMI say
they are working toward setting rates for use of their members'
compositions on video services. Both organizations base royalty rates
either on a licensee's revenue or on the number of times listeners
hear a licensed piece of music.

But even those looking to forge ties with video sites remain wary as
the phenomenon spreads. "I'm not going to embrace these guys and try
to figure out a legitimate business model for two years," says Alex
Zubillaga, Warner Music's executive vice president for digital strategy.

Others say they want to make video sites prove to be more than
flashes in the pan before they invest time and energy in reaching
licensing accords. "We draw a distinction between what is a
phenomenon versus what is a new business model," says Adam Klein, EMI
Music's executive vice president for strategy. EMI Music is part of
EMI Group PLC.

Meanwhile, some companies are pushing ahead. The CEO of video site
Grouper Networks Inc., Josh Felser, says his company is in
discussions with music companies about promotional relationships that
will allow Grouper users to legally use tunes as soundtracks in their
videos. Grouper's software includes a video-editing application that
will provide one way for users to access cleared music. Mr. Felser
expects the first songs to be available by next month. Pump Audio
LLC, which licenses independent artists' music for uses such as TV
shows and commercials, says it is in talks with Internet companies to
let users tap most of its catalog of 65,000 tracks for their videos.

Technological Solutions

There also are some technological solutions being examined. YouTube
is one of several companies that says it is exploring technology that
can automatically spot commercial tunes in order to remove them or
share related ad revenue. Gracenote Inc. has created digital
fingerprints of roughly nine million songs, and says it can identify
tracks from excerpts as short as four seconds. The Emeryville,
Calif., company says its technology could be used to pinpoint
specific commercial songs in the video sites' databases, but declines
to say whether it's discussing that with any of the sites.

Still, many of the most popular songs likely won't be cleared for
inclusion in amateur videos. And for now it remains easy for
consumers to slap commercial music tracks into their videos without
permission, using home-editing software such as Apple's iMovie, and
upload the result to the Web. It also is tough for video sites to
sift through the tens of millions of videos available online in
search of music excerpts.

One day this past week, the most-watched video on YouTube showed a
young woman lip-synching to "United States of Whatever," a novelty
song by a singer named Liam Lynch.

Other popular clips in recent months have included no fewer than two
juggling routines choreographed to the Beatles' "Golden Slumbers,"
"Carry That Weight" and "The End," and at least two others that show
comedians offering a "history of dance" set to medleys of songs by
Elvis Presley, the Bee Gees, Michael Jackson and others. And more
than one million viewers have viewed a clip of two Chinese students
cartoonishly grimacing as they lip synch to the Backstreet Boys' hit
"I Want It That Way."

--Nick Wingfield contributed to this article.

Write to Kevin J. Delaney at kevin.delaney@wsj.com and Ethan Smith at
ethan.smith@wsj.com

************************************************
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

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