After just completing a text course detailing the entertainment industry’s battle against online piracy, I was pretty surprised to wake up this morning to find this one: FreeAllMusic Strikes Deal With EMI For Ad-Supported Downloads.
Finally a common sense approach (indeed it’s almost the Hulu model for music) to the illegal downloading of music! We all knew that the digital revolution was coming. We all knew that it would changes our lives in unforeseen ways, and numerous commentators knew that it would greatly affect the framework of our Intellectual Property regime and copyrights specifically. But it’s as if someone forgot to tell the entertainment industry that this digital revolution was coming.
Instead of innovating and adopting novel legal solutions to the illegal downloading of music, movies, and television, the entertainment industry (through the RIAA and MPAA) has simply chosen to sue everyone under the sun! In the abscense of legal alternatives, of course people were forced to turn to illegal downloading, and the RIAA ended up suing 12 year old kids and 83 year old grandmas. Until the iTunes music store came along a few years ago, there was no real alternative to illegally downloading music.
The MPAA didn’t take much notice about the problem (not until a few years ago) because at the time that music files were being pirated across the world, the technology was not good enough to transmit massive movie files. Well, now that technology has caught up and broadband allows the transfer of massive amounts of information (including movie and TV shows) the MPAA has adopted the same approach as the RIAA – sue everyone in sight!
That is why it was so refreshing to read about FreeAllMusic.com’s deal with Universal Music and EMI. Albeit the deal is about 5 – 7 years too late to make any real difference, it does show that the music industry has finally realized that IP commodities will never be the same again. Simply put – the days of gauging consumers for $20 CDs is over, and if you want to continue to be viable in the marketplace you better find ways to innovate to stay ahead of the competition.
The MPAA realized this a few years ago when they launched Hulu.com in March 2008, a website that offers commercial-supported streaming video of TV shows and movies fromNBC,Fox, ABC and many other networks and studios. Hulu is a joint venture of NBC Universal, Fox Entertainment Group (News Corp), and ABC Inc. (The Walt Disney Company), with funding byProvidence Equity Partners, which made a $100 million equity investment and holds a 10% stake. Basically, it is a streaming video website that is owned by the content owners – this is how they were able to get the necessary licenses to host and display the content.
According to Dallas Mavericks owner and entrepreneur Mark Cuban, Hulu will eventually run YouTube into the ground. Its been over three years since he posted a declaration on his blog that only a moron would buy Youtube and that Google was crazy for actually going through with it, and he is starting to look more prophetic by the minute. Further he claims that while YouTube “hides behind” the safe harbor of the DMCA, Hulu has s superior advantage because it is able to license its content:
“Hulu has one HUGE advantage over YouTube, it has the right to sell advertising in and around every single video on its site. It can package and sell any way that might make its customers happy. YouTube on the other hand, has that right for only the small percentage of the videos on its site that it has a licensing deal with. For probably 99% or more of the videos on the site, YouTube isn’t supposed to know what they even are.
How can that be? Because YouTube hides behind the Digital Millennium Copyright Act. Hulu is a media site that presents videos with advertising. It can do whatever it wants. YouTube is a hosting service. It’s not allowed to know what videos are uploaded by users and its not allowed to generate revenue against those videos. It can only sell advertising around videos it has licenses to.”
One downside to all of this – if Cuban is right, and it looks like he is, content holders themselves will just about have exclusive control over their content online. This is especially true if Google and YouTube lose their upcoming $1 billion legal battle with Viacom. While some feel that YouTube may be protected by the safe harbor provision of the DMCA and the recent decision in Veoh, others feel that YouTube is destined to lose the case because there are reports that YouTube employees may be uploaded some of the ingringing content with the knowledge of their managers – this would be fatal to their case, and maybe their existence.
You can read more about the story of the entertainment industry’s battle for online supremacyThe Entertainment Industry’s Battle Against Online Piracy and Copyright Law in the Digital Age.