Three Strikes and You’re Out — Music Rights Owners Have the Power

We're delighted to bring you another post in an excellent series on the serious issue of buying and promoting music rights. Richard Kirstein of Resilient Music shares more of his professional knowledge and experience.

In the last couple of posts we’ve look at some of the risks for brands of unlicensed music usage. In Part 1, we looked at how risk arises and in Part 2 we examined the legal and financial outcomes of those risks. However, that’s not the whole story as there are some very real and practical issues to contend with, particularly for unlicensed online usage.

In the past couple of years, music rights owners have been aggressively ramping up sync licence fees for online usage, especially for YouTube. This is particularly true of some of the “major” music publishers where we’ve seen fee increases up to a multiple of 10 compared with similar uses 12 months earlier. Their rationale is that YouTube is becoming as important as broadcast TV media so needs to be priced accordingly. The challenge for brands is that production budgets for online content are a fraction of those for traditional TV spots. One negotiation strategy to address this is for brands to geolock their content to a specific market – indeed many music rights owners already demand this!

What’s important here?

For brands that are tempted to cut corners and post films with unlicensed music tracks, BE WARNED! Beyond the financial, legal and reputational risks we’ve previously discussed, there are yet further dangers.

The contractual relationships between Google (owner of YouTube) and the music rights owner community are complex and shrouded in secrecy. It’s well known that Google shares advertising revenue as part of their licensing arrangements though this is NOT a substitute for proper synchronisation licences for commercial usage by brands. What’s interesting is that Google has granted take-down rights to music rights owners for films that contain their copyrights without a proper licence in place.

That’s right! Music publishers and record labels can take down your films directly from YouTube – they don’t even have to ask Google to do it for them!

... but worse it yet to come!

To enforce proper compliance, Google has a “three strikes rule” for the owners of YouTube channels that consistently upload content that contains unlicensed third-party controlled copyright e.g. music.

The upshot is that, each time a music rights owner takes down one of your films, that counts as a strike.

If you get three strikes, Google will suspend your entire YouTube channel

The loss of a YouTube channel might be a major blow to a domestic user but it can be catastrophic for a brand that relies on video as a key channel to engage consumers. If the brand disappears for even a day fickle consumers will immediately look elsewhere, to direct competitors, for films about the products and services they’re seeking. In an “always on” world, being “off” is the kiss of death.

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