Thoughts on Music Licensing in a YouTube World

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The music industry has been making a lot of noise about the rampant illegal use of music on video sharing sites such as youtube. The artists and publishers want to be compensated when their work is used by others, which is perfectly reasonable. But there’s a big problem with how they’ve been handling things.

Let’s say that you want to create a video to share with the world. If you want the video to be accessible by as many people as possible, putting it on youtube just makes sense. It’s pretty much the de facto standard in online video, with all modern mobile devices having native support for it right out of the box. Now let’s say you’ve decided on the perfect song to go with your video, which happens to be copyrighted of course. Being the upstanding citizen that I’m sure you are, you decide that the artist should be properly compensated for your use of their hard work. So you try to find out who and how much you need to pay for the use of the song. Here’s where things get ugly.

The problem is that the major music licensing agencies in the business (ASCAP and BMI) don’t have any system in place to actually properly bill and collect money for music used on video sharing sites like youtube.  You can’t buy the rights if you wanted to!  The licensing options they have are geared towards larger business use such as night clubs or television commercials.  If you just want a small one-off use they don’t have options for you.  You could fill out an application and pay their performance license fee, but since there’s no connection between your application and what goes up on youtube, that would do nothing to prevent them from issuing a take-down notice on your video regardless of how much money you put in their pockets.

So now people who want to be legit and pay the artist, can’t. And the artists that want to get paid, can’t.  Brilliant business model…

What I would love to see done to simplify the process (or even create the process) for all involved is a deal be created between large video sharing sites like youtube and the record labels and licensing agencies.  The deal would allow the video sharing sites to sell “premium” accounts to their members.  The premium accounts would allow users to upload content with copyrighted music as long as they pay a reasonable fee for that privilege.   The fee could be based on traffic, with options to either cap views at certain budget levels or buy more when popularity soared.    The money made from the premium accounts can be used to pay the licensing agencies their piece of the pie.

A system such as that would allow small businesses and individuals an easy legitimate way to use music in their content at a reasonable price.  Having the music being essentially bought in bulk with the costs spread to all of the “premium” customers would allow users to only have to pay a fee equivalent to the amount they use.  Making it a lot more reasonably priced for the end user.  It would also mitigate the need for the music providers to deal with potentially millions of small requests and they could work with high dollar-value contracts with the video sites directly.  The video sites can even make a little money off the top for being the middle man.

The people get options to use music legally and in an affordable way.  The artists and publishers get their fair share, the video sites make some extra cash, and hopefully avoid a lot of litigation.  It’s a benefit to everyone (well except for the people who don’t want to pay, but you can’t form a business model around them anyway).

If you have any comments, suggestions, or better ideas we’d love to hear them in the comments.



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