Earlier this year, Judge Louis Stanton of the Southern District of New York granted summary judgment to YouTube’s parent, Google, in the landmark case of YouTube v. Viacom. Judge Stanton held that, through the Safe-Harbor provisions of the Digital Millennium Copyright Act, as long as online service providers responded promptly to complaints of copyright violations by removing the infringing material from their sites, they were not liable for damages. This essentially left copyright holders out in the cold when it came to collecting damages for the unlawful posting of their copyrighted materials, as the costs and efforts to monitor the Internet and pursue individual posters are incredibly burdensome. At the time, Google posted a statement that “online services like YouTube are protected when they work cooperatively with copyright holders to help them manage their rights online.”Computer Money

That cooperation has reached a new juncture as both YouTube and copyright holders have now found a way to turn a profit when unauthorized clips of copyright-protected materials are uploaded to the website. As recently reported in the New York Times, rather than request YouTube remove unauthorized postings to the website, copyright holders are allowing the postings to remain and then splitting the revenue from advertising displayed when those clips are viewed. With the copyright holder’s consent, YouTube adds pop-up advertisements to unauthorized uploads, capitalizing on the ability of Internet protocol to customize advertising geared toward the specific viewer preferences. YouTube then splits the revenue from the advertising with the copyright holder.

It appears this practice will allow YouTube to finally turn a profit, although YouTube’s parent, Google, does not break out revenue for the site. Similarly, copyright holders are finding a new source of revenue. According to the Times article, hundreds of copyright holders like Lions Gate, producers of the popular cable program Mad Men, are earning revenue in excess of $100,000 per year. Furthermore, it is not just large copyright owners that are benefiting. YouTube has taken to partnering with “amateur videographers who have developed a following.”

This marks an attractive shift in the way that copyright disputes are handled, and could lead to a springboard for new non-litigation strategies regarding copyright infringement. No word yet as to whether Viacom has looked to profit on this new service; however, it could be a great way to finance its pending appeal with the Second Circuit.

– Stephen Josey

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