MySpace, YouTube targeted by Universal Music Group
9/14/2006 11:31:36 AM, by Eric Bangeman
YouTube and MySpace may be next on the music industry's hit list, according to Universal Music Group CEO Doug Morris. Labelling them "copyright infringers," Morris said that the label has plans to deal with the popular web sites and their hosting of infringing videos.
MySpace is the trendiest social networking site around, while YouTube has come from nowhere to become one of the most popular destinations on the Internet. While copyrighted material is peripheral to the success of MySpace, the plethora of snippets from popular TV shows like The Colbert Report and The Daily Show along with countless music videos on YouTube has made it a very high-traffic site.
YouTube "respects the rights of copyright holders," according to the Copyright and Inappropriate Content section of its Help Center. However, it puts the onus on its users to ensure that the material they post is not infringing. Given the type of content available on the site, it's clear that users aren't too concerned about who owns the rights to the material they are uploading. That said, YouTube readily takes down copyrighted material once it is notified of the infringement, as fans of a Saturday Night Live sketch found out earlier this year.
YouTube's policy is apparently not enough to appease UMG, as Morris says that the label believes "these new businesses are copyright infringers and owe us tens of millions of dollars."
YouTube is aiming to legally host music videos, as cofounder Steve Chen has said that the site wants to host "every music video ever created." The site has been in negotiations with the record labels, but nothing concrete has emerged as of yet. Morris' comments may be intended as a negotiating tactic, or they could be a shot across the bow to warn of imminent legal action.
The law does provide some protection for both YouTube and MySpace. Since they merely host material, they fall into the category of online service providers under US law, which gives them some basic protections under the DMCA. Once presented with the infamous DMCA Takedown Notice, YouTube and MySpace can avoid further trouble by immediately removing the infringing material.
Questions of profitability muddy the water. If YouTube and MySpace are shown to be profiting from hosting infringing materials, then the liability question may have a different answer. If the labels can demonstrate a financial loss from the infringement, then the sites' defense becomes a trickier proposition.
Perhaps the most troubling aspect of the situation is that YouTube represents a huge opportunity for the record labels. The massive amounts of older and obscure music videos available on the site—as well as newer stuff—demonstrates that there is an underserved market here. The question becomes whether the interested parties will be able to come up with a way to profit from the demand or whether the goose that lays the golden eggs will be served for dinner instead.