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Youtube UK Digital Transformation

With YouTube's Content ID, has internet copyright finally reached maturity?

By Iain Connor | Head of Intellectual Property Litigation

October 27, 2014 | 5 min read

Every business is said to have four stages of its life cycle: infancy, growth, maturity and decline. With the news that companies participating in YouTube's Content ID have received more than $1bn in royalties it seems that the creative industry has finally settled on a business model when it comes to dealing with content posted online.

If that's the case, does this mean the online market for music, film and TV has reached 'maturity'? If so, what next? Decline? Or are we still in the 'growth' phase and what does this mean for companies that don't want to participate in Content ID and offer other business models?

When YouTube was in its infancy, the creative industry took the traditional and justified stance that it was simply not right to allow people to use its content without permission. There were lawsuits which led to the development of simple notice and take down procedures (DMCA notices). While this kept a lid on the problem, it was and remains a constant game of "whack a mole" to stop the incessant posting of unauthorised content which the creative industry receives little or no revenue from.

Even though most people think of YouTube as a content sharing platform, it is in fact the world's second biggest search engine after Google. Logically then if you have access to such a global channel, you need to monetise it – not fight against it. Content ID does just this. Once signed up, rather than fighting YouTube, the creative industry is sharing in the spoils by entering into a profit share with YouTube over the advertising revenue it gets by showing adverts alongside the otherwise unlawful content.

So does this represent a shift in the creative industry's copyright mindset? To an extent yes but in my view what it shows is that it is more a reflection on the maturity of the market.

First YouTube has won the platform race and so the creative industry can partner with an organisation that can deliver a proper financial return. After all, money is 50 per cent of what all the litigation was about. Second, by partnering with YouTube the creative industry can exercise some control over its content. This is the other 50 per cent of what the litigation was about. Third, companies do not have to participate in Content ID and can offer their content in other ways. What YouTube has done though is make the 'premium' versus 'advertising' model the de facto industry standard – another sign of a maturing market.

The ability to track the success of online advertising as consumers are followed from advert to purchase means that advertisers are able to get a real return on the advertising investment. It is also allows advertising to be far more targeted to individual consumers and even provides the opportunity for bespoke ad content. Looked at another way, through Content ID the creative industry is putting its crown jewels in a safe environment next to advertising that works.

So I'm not so sure that the creative industry has now got a different attitude to the use of its copyright content on the web (after all its pursuit of blocking injunctions against ISPs has never been greater or more successful; litigation is not dead yet). It probably does mean that Content ID has reached the 'mature' stage of its business life cycle but the great thing about the internet is that it is impossible to predict what or who the next disrupter will be.

Iain Connor is head of intellectual property litigation at Pinsent Masons

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