The author, in this entry from a Web 2.0-centric blog, details Youtube’s recent efforts to both appease copyright holders and to promote creativity amongst its users.  In January 2007, Youtube unveiled plans for a Revenue Sharing program which would give certain Youtube users a portion of ad revenue Youtube receives based on the number of hits their videos garner. Youtube will give even higher exposure to users labeled as “Directors,” people who are allowed to upload films greater than 10 minutes in length. Similarly, Youtube will share revenue with some copyright holders based on ad money they receive for the viewing of infringing videos. The author discusses the possibility that Youtube will have to increase the number of ads it shows to make up for the profit lost from the Revenue Sharing Program. This leads to the dilemma of Youtube losing viewers if advertisements begin to show up before minute-long clips. To increase the effectiveness of heightened advertising, Youtube may have to adopt a TV style model in which “an advertiser pays Youtube (and thus the content creator) X amount for every viewing.”  To appease advertisers, Youtube’s new Audio Fingerprinting technology could be used to prevent inappropriate videos from being paired with reputable brands. This would be similar to Google Adsense which provides targeted advertising to firms. The problem relates to copyright because if Youtube adopts targeted advertising, which it has recently begun to do, it will be receiving revenue for ads placed in front of infringing videos for which it does not have deals settled with the copyright holders, thus increasing the possibility of them being vicariously liable. The solution, the author notes, is to use Audio Fingerprinting to detect copyrighted material and then inform the copyright holder, who will have the option to either remove the material or share revenue gained from the video with Youtube.

This system could potentially solve the problem of both Youtube and the copyright holder losing money from various transactions. Youtube loses money when it devotes bandwidth and time to a video only to have the video deleted due to a takedown notice. Similarly, the holder loses money wasting man hours filing takedown notices and finding the actual infringing material. If both groups work together, as Youtube intends, companies will be much less likely to sue Youtube, especially if they are actually making money from infringing videos posted online. Similarly, Youtube decreases its chance of liability because it is increasing its promotion of original works by paying some users. By offering directors a part of the revenue earned from their original and creative works, Youtube is encouraging users to make their own films rather than simply splicing together copyrighted material (which leads to zero profit for users). Thus, with the adoption of the revenue sharing plan detailed above, Youtube has simultaneously appeased the copyright holders and expanded its promotion of original material, showing courts that there are indeed significant “non-infringing” uses for Youtube.

Tim Wu from Slate Magazine discusses the development of legal protection against copyright infringement for internet-based services. He argues that Youtube may be safer from copyright litigation than many might believe. He notes that “in the early 1990s…Hollywood and the recording industry worked hard to make Internet companies responsible for any…copyright infringement that happened via the Internet.” Had this view, the idea that internet companies are liable for any infringement that occurs on their sites, been adopted by Congress, few if any Web 2.0 companies would exist today. Fortunately, Lobbyists working for firms controlling a large portion of internet traffic worked to convince Congress that “copyright law threatens to put a damper on the expression of ideas on the internet.” This forced Hollywood to settle for the Digital Millennium Copyright Act, which protects “Information Residing on Systems or Networks At Direction of Users,” or in other words, sites using user-generated content. These sites are protected by the Safe Harbor clause in the DMCA which protects content sites and ISPs so long as they comply with takedown requests submitted by copyright holders. Wu notes that Youtube may be liable if it prosecutors can prove that it is aware of specific infringing material on its site. It may also be liable due to the fact that there is a search option on its services. Wu’s most interesting argument, however, is the idea that Hollywood and the recording industry may actually be fonder of the DMCA than previously believed. He states that these industries get the best of both worlds: if they do not want a clip on Youtube, they can simply issue a takedown notice and have the offending clip removed. If the infringing clip appears to be giving a boost to TV or music ratings, however, they can simply allow the clip to remain on Youtube. Thus, Youtube is protected by the idea of “tolerated use” rather than something like “fair use.”  While sites like Grokster were not covered under the Safe Harbor law, Youtube is protected by this provision of the DMCA.
Wu accurately conveys the crucial role that the DMCA plays in protecting internet content sites and ISPs, which is a crucial argument in my paper. Had the DMCA never been created, Internet sites could be just as liable for copyright infringing content as stores are for selling physical pieces of copyright infringing material. However, the lawmakers clearly anticipated the importance of user-generated content for e-commerce and thus created a protection clause for sites like Youtube. While Wu mentions that Youtube may be liable for its “search” tools, a similar clause in the DMCA may equally protect Youtube from prosecution for this feature. 512D states that sites which allow users to search for material are not liable for any copyright infringing items that users locate using search options. Thus, the DMCA successfully anticipates many aspects of these Web 2.0 sites and prevents content industries from suing services like Youtube.