THE GOOGLE BOOK SETTLEMENT AND ITS IMPLICATIONS FOR ONLINE VIDEO
I’ve posted a couple of times about the Google Book Settlement, more from a general interest in intellectual property issues than anything else. The relationship between the settlement’s engagement with the publishing industry and its possible application to the world of film are not direct by any means. The Google Book Settlement applies to library collections containing copyrighted but out-of-print works as well as orphan works. But, I did suspect that at some point the issues involved would become relevant to the world of film. (Remember, Google owns YouTube.)
Now comes a piece critical about the proposed terms of the settlement from Chris Castle at The Register. He especially takes issue with the proprietary nature of the register Google is creating and the “opt-out” aspect of the permissions process.
From the piece:
Allowing a content registry to be controlled by a company that also exploits that content creates anticompetitive conditions even without the MFN. Potential competitors will worry that their business depends on an infrastructure controlled by a dominant competitor.
History shows that if a company that does the paying also does the counting, there is an inherent tendency for shenanigans against the creators. Imagine if the British performing rights society the MCPS-PRS Alliance outsourced its royalty collection and accounting to broadcasters. The fox would be in the chicken house, and the writers would revolt.
So where does film come in? Well, Castle quotes from this piece in The Wall Street Journal Online in which Google’s Sergey Brin talks about other possibilities:
WSJ: Is establishing a registry for rights holders a model that Google thinks it can replicate in other areas of digital media, like video?
Brin: “Very much so. In fact, with video and our fingerprinting technology, we are essentially building the registry. We have a number of big media companies that send us their raw video files and we fingerprint that and we can attribute those videos to them.”
WSJ: What about in the music industry?
Brin: “The music industry faces a lot of similar problems. There has been a lot of litigating and lack of trust, and it is not something that we have pursued much because there do seem to be other parties that are trying to sort it out. In general, we do want to be comprehensive and we have agreements with many music companies for music videos on YouTube. It is definitely something that is within our sphere”.
Regulators should care who controls the Google Books registry because it can easily reach out to other content. Google is well on its way to dominating all search and advertising, and now maybe a significant share of online content. Google’s ability to accomplish transparent accounting is definitely in doubt.
And he concludes:
The plaintiffs got it half right – our business needs a registry. But that registry ought to be independent, and opt-in. If the Google class action settlement is approved, US courts will essentially create the opposite – an opt-out registry controlled by a dominant player with “most favoured nation” price protection. It is a fundamental principle of international law that an author should not be compelled to submit to formalities (such as an opt-out registry) in order to enjoy their rights.
But the borderless Internet drives creators toward at least pan-economic area licensing to encourage and facilitate competition among legitimate businesses. It is hard to see how a single-purpose opt-out books registry with a goodie-laden court-ordered license reached in the context of unequal litigation furthers any worthwhile public policy.
Regulators urgently need to take a closer look at this settlement. A win-win resolution of the harms done by Google to the authors and publishers would be to make Google pay for (or at least pay to start) a truly independent registry in line with current policy trends that could further these goals of cultural protections for all authors and citizens, voluntary opt-in licensing regimes that promote competition, and royalties for creators.
Related is this article about Google generally, “Google the Destroyer,” by James V. DeLong, special counsel and chairman of the Intellectual Property practice area in the Washington, D.C. office of Kamlet Shepherd & Reichert. While I don’t agree with everything in his piece, his discussion of Google’s interests in promoting ad-supported content models is interesting:
Several ways of financing the creation and distribution of content exist. Consumers can pay directly, either per ticket (a movie) or for a subscription (XM Radio). Ads can be sold, either combined with a payment (magazines) or stand-alone (broadcast TV). Or a distribution company can sell raw access to the network, and let the users worry about the content (telephone). And of course there are hybrids, where basic service is sold cheaply, and premium offerings bundled on top of it (cell phones, plus ringtones).
Of all of these, advertising is the least satisfactory. In a system based on advertising, the consumer is a product, not a customer. His eyeballs and ears are sold to an advertiser. The link between the value a customer places on a piece of content and the money available to fund its creation becomes slender indeed. I might be willing to pay $100 for a particular performance, while the value of my eyeballs to advertiser is a mere dime. In an advertising-based system, only the latter counts.
There is nothing wrong with advertising-based systems, but they should not be allowed to crowd out other forms of financing, in which the consumers of content are actually the customers (and thus the kings).