Shining Some Light On The Dark Side Of YouTube

Not too long ago, I wrote about my frustrations with YouTube - a platform that enables unauthorized uploads of copyrighted content (commonly referred to as “user generated content”, or UGC) - uploads that are often illegally monetized, as facilitated by YouTube, and the revenue of which YouTube shares and participates in.

There is also the matter of YouTube’s Content ID System - a digital audio fingerprinting system that is a necessary tool for copyright owners to police UGC, but a system that YouTube selectively allows access to (access which I was denied for reasons unknown), thus creating the ability of those with access to fraudulently utilize Content ID to illegally claim and monetize the content of those without access (with no mechanism in place for the rightful copyright owner to notify YouTube of the fraudulence in question or properly dispute it).

And then of course there’s the matter of YouTube, along with uploaders of illegally monetized UGC and parties misusing Content ID, keeping all the money that was earned as a result of the illegal monetization of copyrighted content.

I was repeatedly falling victim to the above (as detailed here), so I had a decision to make.  I could do nothing and let the anarchy continue.  Or I could engage an intermediary service to gain indirect access to the Content ID System.  While YouTube is extremely selective in granting copyright owners direct access to Content ID, there are a variety of independent companies with direct access, which broker indirect access to the common man.  As far as YouTube is concerned, anyone is free to deal with such “Content ID brokers”.

It is important to note that intermediary Content ID brokers all require monetization of UGC, for which they take a commission on the resulting ad revenue.  In this way, YouTube basically forces the hand of a copyright owner - join us (indirectly) and monetize, or otherwise let us get back to monetizing your shit without your involvement.

After considerable internal debate, I decided that as much as I dislike the online ad culture, I hate people hijacking and illegally monetizing my content far more.  Plus, I reasoned I could keep my official YouTube channel ad free, while only monetizing UGC - this would maintain an ad free user experience for fans that come to my channel, while also allowing me to earn money from the use of my music in unauthorized non-official videos - this seemed like an acceptable balance and appropriate compromise.

Ok, so what are the deal terms?  YouTube takes a flat 45% of ad revenue across the board.¹  Already, I hate the deal.  There is no justification for YouTube’s cut to be that large.  None.  Yes, YouTube has bandwidth and server costs,² and yes they are the ones selling the ad space - but they are also monetizing millions of videos, the content of which they don’t own and the creation of which they had no involvement in (at least for the vast majority of cases) - if the sheer volume of videos that YouTube is monetizing doesn’t sufficiently offset their costs (as is reportedly the case),³ they should raise the price of the ad space instead of taking a higher % from content owners.  Let’s all keep in mind that nobody petitioned for the creation of the service - it shouldn’t be the burden of content owners to keep YouTube afloat financially (especially since it is the unauthorized appropriation of their content that forms the foundation of the service). 

But it gets worse, because YouTube’s 45% cut is apparently of net profits, not gross.^4,5  If you have a YouTube channel, try searching for the phrase “55% of net revenues recognized by YouTube” in your agreement…you might be surprised to discover that’s your share.  In other words, YouTube recoups its costs (whatever they are deemed to be by YouTube) from the gross ad earnings, after which it keeps 45% of what’s left.  I think we can all agree that is definitively monstrous.  To be clear, these revenue splits are in connection with direct monetization of a YouTube channel’s content by the channel itself - and so in theory may not apply to Content ID revenue distribution, where content owners monetize other people’s unauthorized uploads of their content - however, I have been told by more than one source that Content ID splits are identical.

So out of the remaining 55% that goes to the content owner, the intermediary service would then take their commission, the amount of which varies depending on the company and the negotiating power of the content owner.  Suffice it to say, there is a lot of bullshit when it comes to intermediary services, with some taking large percentages because they can, or because their clients simply don’t know any better.  So unfortunately, this can be an area where a copyright owner gets an additional layer of exploitation.  That being said, not all intermediary services are villainous, and some will agree to reasonable commissions.  

I should also point out that a commission is warranted in virtue of the fact that someone has to manually monitor and respond to claim disputes that arise when uploaders contest the validity of various Content ID matches - occasionally Content ID does get it wrong, but most of the time uploaders of UGC either don’t understand what is happening and ignorantly dispute a legitimate copyright claim, or mistakenly invoke the “fair use” provision of copyright law, or intentionally try to game the system by disputing what they know is a legitimate claim in the hope that the content owner won’t respond in time (if a claimant fails to respond to a dispute within 30 days, YouTube automatically releases the claim).  So there is certainly some labor involved, which is in direct relationship to the volume of copyright claims a given content owner has (the more claims, the more time required).

What I do object to however, is the principle that a content owner should be forced to engage an intermediary company to provide this service, and therein be forced to give up an additional % of revenue (whatever that % may be), especially when YouTube is taking 45% of net earnings.  For that amount, YouTube should be assigning their own staff to monitor and resolve claim disputes, without forcing content owners to finance the process - after all, it is YouTube that created the platform in which such a process is necessary in the first place!  And if YouTube doesn’t want to deal with the headache, preferring instead to outsource the task to intermediary services, so be it - but those service commissions should come out of YouTube’s share, not the content owners.  This much should be obvious to anyone with any semblance of ethics, but to the extent corporations are people, they be bitches…

So here I was, caught between a rock and a hard place.  On the one hand, I do not want to participate in an exploitative system.  On the other, there is no alternative to stop my ongoing exploitation at the hands of 3rd parties.  In the end, I can protest YouTube’s outrageous deal terms with respect to the videos I personally upload to my own channel by boycotting monetization - YouTube gets nothing, and I get nothing - fair enough.  But boycotting Content ID affords me no benefits whatsoever - if I’m not monetizing UGC, someone else is (or will be), so I can either ensure those earnings come to me or I can let them go elsewhere (YouTube gets its cut either way).  

Some might be tempted to think that perhaps there is still a moral victory in boycotting Content ID, but I would disagree - it’s simply a choice between letting one party exploit me (YouTube), and letting multiple parties exploit me (YouTube + UGC uploaders and Content ID abusers).  Generally, I think it’s wise to minimize the number of people exploiting you to the greatest degree possible.  And so, I have now joined the trend of monetizing UGC by enlisting an intermediary service.

Onwards and upwards…

After uploading my assets, Content ID got to work scanning YouTube for matches, a process that doesn’t finish overnight.  After 4 months of searching, as of this writing Content ID has identified 191,735 videos that use my music (all without authorization).  Some of these videos have millions of views, and some have less than a hundred.  All together, the collective views during the 4 months that Content ID has been tracking them amount to 128,370,896…and accordingly, we can deduce that the total combined views since the respective upload date of each of these videos probably exceeds 1 billion.  I have no way of knowing how many of these videos were monetizing my music beforehand, nor any way of determining how much money has been illegally made from my content to date.  However, I am now making money from these videos, and no one can illegally claim and monetize my music ever again moving forward.

I can’t help but be perplexed at the fact that YouTube previously denied my Content ID application, when it turns out there are literally thousands of unauthorized uploads containing my music.  I had no way of knowing this in advance, of course, but neither did YouTube…so what exactly was their evaluation based on?  Whatever the criteria, it appears woefully insufficient, as 192 thousand copyright claims and millions of UGC views per month certainly warrants direct access to the service (access that should not be conditioned upon signing an unrelated Google Publishing Agreement^6,7).  It seems to me that assessing a creator’s need for Content ID requires knowing how many of YouTube’s videos contain that creator’s content, something which can only be determined using Content ID itself, and therefore, that YouTube should not prejudicially withhold access to Content ID on account of mere guesswork and assumptions.

Importantly, it turns out that the advertising revenue being generated is significant.  There are a variety of factors that determine how much money a given video earns, making it impossible to predict with any certainty what future earnings, or the earnings of others, will amount to; but the potential as a source of sustained income is clear.  Of course, not every content owner will have 192 thousand claims - many will have much less (and some will have much more), but with a more equitable distribution of ad revenue, it could make a measurable difference in the life of a struggling artist.  This is ultimately good news for an industry that is grappling with its transition into modernity, and for independent musicians hoping to make a living off of their craft.  YouTube has created a system that has the ability to positively contribute to the music ecosystem, and this should be embraced and encouraged - at the same time, YouTube is currently exploiting content owners by taking an unfair share of the pie, and strong-arming creators into take-it-or-leave-it deals while tacitly leveraging piracy as a consequence of not conforming.  

This should be decried at every turn, but too often, we’re instead exposed to claims of this or that creator making boat loads of money from YouTube revenue.  Yes, that’s true - you can make boat loads of money.  But what are the other players making as part of the deal?  That should matter to you.  You made 6 figures from YouTube, and I can potentially do the same?  Wow, that’s fantastic.  But think about it this way: if for every $1 you made, your “partner” was making $3, would you still feel good about that?  I’d hope not, at least not when it’s your content that is the bedrock of the earnings, and not when you were bullied and essentially blackmailed into being a partner.

So the question is, can anything be done to improve this state of affairs?  The short answer is, not really (at least not without changes to current copyright law).  Even if I remove all of my personal uploads from YouTube, it won’t have any impact on the 192 thousand unauthorized uploads containing my music.  It also won’t stop any of those users - and YouTube - from illegally monetizing my music.  For clarity, let’s review:

1.  Anyone can upload anything they want - if they upload copyrighted content without consent, YouTube is protected by safe harbor (i.e. “We said they needed to possess the necessary rights - we had no way of knowing the uploader didn’t own the copyright or have permission”).

2.  If the user monetizes their unauthorized upload, YouTube is (apparently) still protected by safe harbor, despite directly participating in and sharing the profits generated (a fact that continues to baffle me).

3.  Even if you’re willing to devote all of your time to finding unauthorized videos and sending YouTube DMCA notices to have them removed, not only is there not enough time in the day to complete this task, and not only will you have to indefinitely perform this task for the duration of YouTube’s lifespan, but in the best case scenario you will have only succeeded in taking down a small fraction of unauthorized videos, because the vast majority of UGC use copyrighted content anonymously (i.e. without crediting or listing the content in the video or video description).  So the exploitation and illegal monetization will continue in the shadows.

4.  The only way to locate all (or most) unauthorized content is by utilizing Content ID, presumably created expressly to solve the above problem.  However, YouTube won’t issue you a Content ID account - they will force you to go to an intermediary company.  And that intermediary company will require that you allow them to monetize the unauthorized uploads (otherwise there is no point in them being in business).  And either way, you have absolutely no control over the deal terms of that monetization.

The genius of YouTube’s methodology is that all paths lead to monetization.  In every scenario, YouTube earns money off of your content.  I can loudly proclaim from the hilltops that I want no part in their advertising monetization system, but I am absolutely powerless to prevent YouTube (through the actions of its users) from monetizing my content - it will either happen legitimately with my consent, or illegitimately without my consent.

There is only one solution that can address this, and it requires having your own Content ID account.  Armed with direct access, you could set the policy to “track only” - this would still place copyright claims on all unauthorized videos (preventing the uploader from being able to monetize the content), but it would also mean that no ads are placed on the videos…so you as a copyright owner wouldn’t make any money, but neither would YouTube.  Consequently, if every label / publisher / intermediary service / creator that has direct access changed their settings from monetize to track, then the lost revenue to YouTube just might be enough to get them to the negotiating table.  

Then again, Google earns unfathomable amounts of money overall, and might be content to simply wait out such a protest.  In response, all said parties would have to be prepared to switch from “track” to “block” (effectively pulling the content off of YouTube).  Consider that a very large percentage of YouTube traffic is music driven (it is apparently the largest music on-demand streaming service around),^8-12 and the fact that music is used within an exorbitant amount of non-music-specific YouTube videos (e.g. home videos) - if you remove the music, you remove much of the incentive to go to YouTube, which undermines the YouTube culture, which lowers the value of the service to advertisers and weakens the brand overall … at that point, you stand a pretty good chance of motivating YouTube to resolve the issue, as they are likely too invested in the platform to let it wither away.

Of course, the above strategy requires coordination between multitudes of disparate companies and persons, in order to be effectively implemented en masse, and admittedly that is not likely to occur - but it remains possible nonetheless.  If it were to happen, there is also the risk that independent artists unaffiliated with a label / publisher might get left out in the cold, with YouTube negotiating non-standard deals for major players exclusively (and for all I know, maybe this is already secretly the case).  Regardless, the larger point remains - the entire YouTube edifice is built on a foundation of copyright owners’ creations, and to that end, is forever vulnerable to being dismantled at any moment - it just takes the will of creators to effect change.  While I enjoy making money as much as the next person, I would be more than willing to leave it all on the table.  What says you?

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1 "YouTube to Tv Networks: No More 'Sweetheart' Ad Deals for You!" Ad Age. October 31, 2013. ↩
2 "YouTube Standardizes Ad-Revenue Split for All Partners, But Offers Upside". Variety. November 1, 2013. ↩
3 "YouTube still doesn't make Google any money". Business Insider. February 25, 2015. ↩
4 "YouTube Revenue Explainer". Music Tech Solutions. March 10, 2016. ↩
5 "How YouTube Pays Artists by East Bay Ray". Janky Smooth. December 3, 2015. ↩
6 "The Dark Side Of YouTube". Zack Hemsey Official Blog. January 28, 2015. ↩
7 "What should I do about YouTube?" Official Zoe Keating Blog. January 22, 2015. ↩
8 "Forget CDS. Teens Are Tuning Into YouTube". The Wall Street Journal. August 14, 2012. ↩
9 "YouTube as you know it is about to change dramatically". The Verge. August 28, 2015. ↩
10 "YouTube boosted by music videos to pull behind Facebook". BBC. October 26, 2011. ↩
11 "YOUTUBE IS THE NO.1 MUSIC STREAMING PLATFORM - AND GETTING BIGGER". Music Business Worldwide. July 6, 2015. ↩
12 "YouTube Music Is Growing 60% Faster Than All Other Streaming Music Services Combined". Digital Music News. September 14, 2015. ↩