Universal and MySpace: a clash of old and new worlds

Stan Beer
Tuesday, 21 November 2006 15:15

Opinion and Analysis

Hands up everyone who likes AC DC? No? The Who? No? How about a more current band like Green Day? Yes? Whatever your taste, you can generally find a video of your favorite recording star posted on YouTube. I picked those three bands because I happen to like them and I easily found original videos of them performing songs of my choice. The problem is that those videos, as poor quality as they are, breach copyright laws unless deals have been struck with the copyright owners.

The defence used by sites like YouTube and MySpace, which also carries copyright music and videos posted by users, is that they comply with the Digital Millenium Copyright Act and they take down material that infringes copyright as soon as they are notified by the copyright holder. In the case of MySpace, the News Corporation owned site has gone a step further and implemented a proactive system to identify copyrighted material before it's posted.

For recording company Universal, however, the actions of MySpace appear to be too little too late because it has come charging in like a wounded bull and lodged an aggressive law suit. Why it hasn't done the same with YouTube is not clear. Perhaps the YouTube suit is already being formulated; perhaps a deal has been struck with YouTube; or perhaps MySpace is being used for a precedent setting test case so that YouTube can be more easily targeted later.

The point is that when push comes to shove, regardless of whether MySpace and Universal settle out of court, it is highly unlikely that a situation will continue where copyright music and videos can be freely posted to the web without the copyright owners being compensated.

How and in what form that compensation will take place is the big question. Since the days of the original Napster, it has become quite obvious that internet combined with file sharing technology has superseded the ability of content providers to maintain their traditional methods of monetarizing their content.

Universal's battle with MySpace is really only forestalling the inevitable. Sooner or later, the world's largest recording company will have to make peace with the online world, as another recording company Warner Bros already has, and look to ways of gaining mutual benefit from the enormous traffic that visits sites like MySpace and YouTube.

Universal may claim that as well as protecting its own interests, it is also protecting the interests of the artists it has signed. However, it could equally be argued that by not finding a way to work with MySpace and YouTube, Universal is depriving those artists of additional exposure and potential revenues through monetarizing that exposure.

We are now living in the age of the Internet and Web 2.0. No matter how hard recording companies, movie studios, and video makers try, we can never return to the old days where the dissemination of content was held in the hands of a privileged few protected by impossibly high barriers to market entry. Recognition of this by a traditional media company with the resources of News Corporation is evidence that the old world has already started to realize that there is money to be made in the new world.