YouTube's Soul Stealing Music Key Contract

What you should know.

If there is a reoccurring theme so far in 2015, it surely is the dis-satisfaction and frustration that music industry professional share for YouTube. Maybe no other artist globally is as vocal about their feeling towards YouTube then Zoe Keating. In 2014, she released her revenue statements from all her digital streaming sources, and called out YouTube for their lack of monetization efforts, describing how the streaming service helped to cannibalize her sales efforts. Last week, Zoe shared a discussion she had with her Google Rep, feeling pressured into agreeing to YouTube’s unfair new terms for Music Key.

Keating is one of the most prominent artist releasing music herself, rather than through a label. She is therefore not covered by a deal between YouTube and indie labels licensing agency, Merlin, which was signed in 2014 following a similar over contractual terms for Music Key.

My Google YouTube rep contacted me the other day. They were nice and took time to explain everything clearly to me, but the message was firm: I have to decide. I need to sign on the new YouTube music service agreement or I will have my YouTube channel blocked,” wrote Keating in a blog post outlining her concerns.

1) All of my catalog must be included in both the free and premium music service. Even if I don’t deliver all my music, because I’m a music partner, anything that a 3rd party uploads with my info in the description will be automatically included in the music service too.

2) All songs will be set to “monetize,” meaning there will be ads on them.

3) I will be required to release new music on Youtube at the same time I release it anywhere else.

4) All my catalog must be uploaded at high resolution, according to Google’s standard which is currently 320 kbps.

5) The contract lasts for 5 years.

Many indie artist are independent because they don’t want someone telling them what music to create or how to release their music. With these updated terms and conditions, YouTube effectively grants themselves a mandatory 5 year contract and distribution deal for any content an artist releases online under that term. In addition to the music an artist puts out, YouTube grants themselves the right to effectively own distribution rights to any 3rd party content that is uploaded to their platform, even if the creating artist consciously decided not to put on the YouTube platform.

This news is contradictory to how Google reps have described their new music service publicly. Sources like The Guardian describe YouTube’s policy as not to block or remove artists’ channels if they do not agree to its Music Key terms. They can still upload videos, but they cannot make money from advertising around them, nor can they claim third-party videos that include their music via the content ID system.

Keating would still be able to get those tracks removed if she chooses, but without content ID she would have to first find them herself, and then submit individual “takedown” requests for each video – a time-consuming process, especially for a self-released artist. Indie artist are already wearing many hats, filtering YouTube’s massive content library for infringing content is just like finding the preverbal needle in a haystack, but only if the hay was reproducing at 4 billion straws per day. To that we say

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There is no doubt that the online video space is becoming more fragmented nearly everyday. Content is still king, but controlling distribution has become the name of the game for many creators globally. Artist like Weird Al, labels like Def Jam, and management companies like RocNation are testing new release strategies for their content, hoping to control either more of the data collection or the monetization efforts. These updated terms don’t come as much surprise from YouTube, as it would behoove them to create terms that grant them such egregious rights.

All of this said, I think artist and the music industry as a whole have a misconception of the true value of YouTube. YouTube’s value is in the size of the audience they can reach and the social engagement happening on their platform, not in their ability to be creators go to monetization technology. Just like when artist license their music videos to MTV or VH1 without seeing part of the revenue share from TV ads, artist placing their content on YouTube are really doing it for the exposure.The fact that they allow artist to earn anything seems to be a step up from what Facebook, Twitter, InstaGram, etc offers to creators for engaging with their platforms.

For more on other Online Video Platforms (OVP’s) and digital distribution strategies, like us on Facebook or Twitter and stayed tuned to your feed!.

We recently wrote about the importance of creating a proprietary web ecosystem for artist as monetization and aggregation tools, but many of the questions we received related to the alternative, YouTube.

YouTube provides value to countless creators globally, creating a whole new class of celebrity, the viral online star. But in today’s digital streaming society, the biggest challenge has been margin, which has left many demanding larger revenue share or alternative monetization solutions.

But what are the limitations of YouTube? What do artists need to know before planning their content strategy online?

The devil is in the details, and we decided to analyze the YouTube Terms and Conditions to gain some clarity. Here is what stood out:

4. General Use of the Service—Permissions and Restrictions You agree not to use the Service for any of the following commercial uses unless you obtain YouTube’s prior written approval:

  • the sale of advertising, sponsorships, or promotions placed on or within the Service or Content

Artists and creators are not allowed to sell advertising, sponsorships, or promotions within their own content. This is likely because Google, YouTube’s active sales team, is selling the same ad space, and any additional sponsorship sales could conflict with the Google efforts. As a manager trying to maximize digital revenue for my artist, how do I know Google is looking out for my best interests? How do I know that they are giving me some of the premium ad campaigns to run against my content rather then giving it all to Taylor Swift, Justin Bieber, or PewDiePie? Why can’t I set the value of my artist content?

 

  • the sale of advertising, sponsorships, or promotions on any page of an ad-enabled blog or website containing Content delivered via the Service, unless other material not obtained from YouTube appears on the same page and is of sufficient value to be the basis for such sales.

Followed by no ad sales or promotion within the content comes the inability to sell ad space around the content. This is Google’s subtle way of telling content creators that they aren’t allow to sell ads on the same pages there is a YouTube embed without their permission…which to me would be the same thing as Facebook telling me I can’t paint the walls in my house blue.

  • You use the Embeddable Player on your website, you may not modify, build upon, or block any portion or functionality of the Embeddable Player, including but not limited to links back to the YouTube website.

 

Any website owner can attest, keeping an audience engaged throughout any viewing session is a difficult task. The ones that do it well see significantly higher time spent, page click through rates, and overall site traffic. Artist benefit from producing, non arguably, the most engaged content online (VEVO accounts for significant amount of YouTube’s total traffic, and that doesn’t include Warner Music Group who distributes through YouTube direct and other 3rd party vendors). It would be behoove artist to remove hyperlinks routing to third party websites, driving engagement away from their site, brand, monetization tools, and tracking mechanisms.

5. Your Use of Content In addition to the general restrictions above, the following restrictions and conditions apply specifically to your use of Content.

  • The Content on the Service, and the trademarks, service marks and logos (“Marks”) on the Service, are owned by or licensed to YouTube, subject to copyright and other intellectual property rights under the law.

Signing up to YouTube grants YouTube a license all logos and trademarks to YouTube, allowing them to exploit them however they see fit. I don’t think we need to explain why this might not be a good idea for artist and creators.

 

  • You understand that when using the Service, you will be exposed to Content from a variety of sources, and that YouTube is not responsible for the accuracy, usefulness, safety, or intellectual property rights of or relating to such Content. You further understand and acknowledge that you may be exposed to Content that is inaccurate, offensive, indecent, or objectionable, and you agree to waive, and hereby do waive, any legal or equitable rights or remedies you have or may have against YouTube with respect thereto, und, to the extent permitted by applicable law, agree to indemnify and hold harmless YouTube, its owners, operators, affiliates, licensors, and licensees to the fullest extent allowed by law regarding all matters related to your use of the Service.

Two things stand out to us with 5(b). The first part states that YouTube isn’t responsible for the safety of your intellectual property. This is followed by a clause that grants YouTube the ability to run any content they want in front of your content, including offensive or indecent content. Doesn’t sound brand safe to us.

6. Your Content and Conduct

  • You shall be solely responsible for your own Content and the consequences of submitting and publishing your Content on the Service. You affirm, represent, and warrant that you own or have the necessary licenses, rights, consents, and permissions to publish Content you submit; and you license to YouTube all patent, trademark, trade secret, copyright or other proprietary rights in and to such Content for publication on the Service pursuant to these Terms of Service.
  • For clarity, you retain all of your ownership rights in your Content. Jedoch, by submitting Content to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the Content in connection with the Service and YouTube’s (and its successorsand affiliates’) business, including without limitation for promoting and redistributing part or all of the Service (and derivative works thereof) in any media formats and through any media channels. You also hereby grant each user of the Service a non-exclusive license to access your Content through the Service, and to use, reproduce, distribute, display and perform such Content as permitted through the functionality of the Service and under these Terms of Service. The above licenses granted by you in video Content you submit to the Service terminate within a commercially reasonable time after you remove or delete your videos from the Service. You understand and agree, jedoch, that YouTube may retain, but not display, distribute, or perform, server copies of your videos that have been removed or deleted. The above licenses granted by you in user comments you submit are perpetual and irrevocable.

 

By agreeing to terms of service, you license to YouTube all patent, trademark, and copyright rights. 6(g) goes into further detail about the license that is granted to YouTube, which are in perpetuity…or FOREVER!

The main take away is that a YouTube deal is a licensing contract with a social community. Jedoch, it is not a true monetization technology meant to drive the highest monetary value from content distribution for artist. If artist, Etiketten, and management companies want to start generating new revenue streams for their talent, they need to start by re thinking their content strategy, and focus on the development of need monetization and tracking technologies drive more value from direct fan engagement with their brand.

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