embedding permissions

Official music videos on YouTube from three out of the four major labels can’t be embedded in third party sites. You can embed Warner, you can’t embed UMG, Sony BMG, or EMI. If you use unofficial versions of the videos posted by a third party you can embed them, but not the official versions posted in the labels’ channels.

The back story is that the labels spent the last few years having a huge fight over royalties from user-driven video sites, and successfully got YouTube to pay for rights. (I’m don’t know for a fact that YT pays, but from what I know about the industry I’m sure it’s true.)

The issue of embedding has nothing to do with whether or not the labels get paid. They get paid on embedded plays. (Again, I haven’t see any contracts on this, but I know enough to have confidence).

But now they want a secondary benefit — to control distribution. Allowing third parties to embed videos from YouTube frees them from having to do 1-1 negotiations with the labels, and the labels want to be able to negotiate with each and every site that shows music videos.

I imagine the majors have three motivations. One, to be able to charge different rates depending on the site, so that they can raise rates depending on how deep the embedding site’s pockets are. Two, to be able to meet various contractual and marketing requirements. For example they may have morals clauses for wholesome artists like Hannah Montana, which would be both a legal and a marketing issue. Three, they have other negotiations in which they want to be able to use music videos as leverage. For example they might have an ongoing negotiation with LimeWire in which LimeWire wanted the ability to show YouTube music videos along with the ability for users to share MP3s. (In reality the labels’ desire there would probably be just to freeze out LimeWire completely).

Imagine a web in which every relationship had to be negotiated by hand. It would be the opposite of the internet.

5 thoughts on “embedding permissions

  1. Adding to your leverage item: the labels are likely concerned that any very successful site or combination of sites becomes a primary interface between fans and recording artists, i.e., that takes the record labels out of the equation, or at least makes them only a small factor in the transactions between artists and fans.

    The success of sites like YouTube potentially give these sites and/or artists and/or fans leverage over the record labels. For example, an artist can get a video seen on YouTube without a big label-type marketing budget, and so that fact could potentially weaken a labels’ negotiation in a record deal. Or, YouTube could become like a radio station and seek payola from labels to promote certain artists, etc.

    The labels must want to curtail especially singular successes, like iTunes music store-type successes. These sites could become so big as to become more or less like monopsonies (buyer’s monopolies), where they have more power over the labels than vice versa.

  2. Lucas, this post is really fascinating to me since I just launched Grabb.it TV, which is a mashup of the Billboard data from the last 20 years, wikipedia, and the YouTube API; using those three ingredients, we built a browsable interface to the most popular videos for each week of the 80s and 90s.

    I used the YouTube gData API to search for the videos based on the titles of the most popular songs according to Billboard. So far, I’ve noticed a very small number of them that came back without embed code, but the vast majority came back with the correct music video uploaded by a fan (i.e. with embed allowed) as the first result of the search. I wonder if this means that the embeddable videos somehow have higher ‘page rank’ within YouTube search (maybe because they’re more likely to receive more views and comments) or because YouTube assumes you wouldn’t want the non-embeddable ones to come back in response to an API call, since embedding is by far the most likely thing that you’d want to do with those results.

    It’s depressing to think that the labels are trying to clamp down on YouTube embeds. In response to all the FUD they’ve spread about mp3s, embedded videos have started to become the main object around which online conversation about music takes place. For now, bloggers feel safer posting them, but that surely will change if the labels start to take a more aggressive stance.

  3. Greg, I think that the labels don’t care about startups or bloggers except to the extent that they influence deals with the behemoths. If your usecase is valuable to Google, for example, the labels can charge Google a premium for enabling it.

    Also, there is a chance that your site will become large enough to be worth the lawyer bills for negotiations, and the labels will want to prevent you from riding on Google’s deal in that case.

    Their mission is to reduce your profit margin to the minimum needed to keep you in business while feeding their profit & loss statement. To do that they want to custom tailor the deal according to your ability to meet the payments. If you monetize worse than others, they want you to go out of business, so that they don’t eat market share from those others.

    It comes down to how high your CPM is relative to other web vendors, including your friend Google.

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