CMU Trends Labels & Publishers Legal

Trends: What one thing could Google do to placate the record labels in 2014?

By | Published on Wednesday 15 October 2014

Google HQ

As Google gets ready to launch its YouTube audio streaming service, while concurrently revamping its existing Google Play-branded streaming set-up, the web giant is set to have one last stab at taking its place alongside Apple, Amazon and the bigger streaming start-ups at the front of the digital music race. And yet the web giant’s relationship with the music industry remains strained.

Of course it’s reasonable to argue that, via the YouTube video platform, Google already has a place towards the front of any digital music chase, it being a key marketing channel for most labels these days, and a sizable revenue stream for bigger rights owners. And although video-based, it nevertheless competes head on with the Pandoras and Spotifys of the world, and is arguably the only streaming music service that has [a] engaged the mainstream youth market and [b] put ad revenue at its core.

Though, while continuing to prolifically use YouTube to promote and distribute their content, the labels have also spent a lot of time bad-mouthing the service this year, with the Google subsidiary becoming enemy number one on the music conference circuit since the MIDEM event in Cannes back in February. The labels have come to resent the preferential royalty rates YouTube enjoys, especially now that the higher-paying audio streaming services are moaning that the Google video site is hindering their market growth.

Nevertheless, all three majors have signed up to the planned YouTube audio streaming service. It’s widely assumed there were considerable kickbacks for the labels in the deal; though given they’ve long had more control over the ad sales on their official content on the YouTube platform (Sony and Universal through Vevo, Warner directly), perhaps the bigger record companies weren’t really so down on the big video site as everyone else.

Many of the indies, of course, are angrier about the all-new YouTube audio service than they ever were about the YouTube video platform’s mediocre royalty rates. After seeing the take-it-or-leave-it deal on the table, the World Independent Network instigated a high profile revolt on par with the indie sector’s past fights with MTV, iTunes and MySpace. And while Google remained bullish in its official statements on the matter, word from behind the façade was that senior management were highly pissed off at behind portrayed as the corporate exploiters of grass roots musicians across the news spectrum.

Everything has gone quiet on the indie labels v YouTube front of late. It seems certain the fallout delayed the launch of the new Google music services, as threats that indie label content would be imminently stripped from the YouTube video site if a deal couldn’t be done on the audio service came to nothing. Though everyone seems certain YouTube audio and the all-new look Google Play streams are going live soon and it will be interesting to see if all the indies are on board.

But even if Google can agree terms with all the music rights owners on YouTube and the all-new look Play, tensions will remain, not because of the web giant’s music services and any licensing deals it puts on the table, but because of the Google search engine, and the company’s continued resistance to play ball on what has become a core element of the music industry’s battle against online piracy.

The role of the search engines – which in Europe mainly means Google – has been high up the anti-piracy agenda for years now. Though the Google gripe has grown stronger in the last eighteen months, partly because of perceived inaction on the part of the web giant, and partly because its potential role has become ever more important.

Of all the methods employed by rights owners to fight online piracy – including digital rights management, suing the makers of file-sharing technology, suing the users of file-sharing platforms and lobbying for three-strike systems to be introduced by law – arguably the most effective, or maybe least ineffective, has been web-blocking.

Although not exactly uncontroversial, in those countries where web-blocking injunctions have been possible, under either existing or new copyright law, rights owners have now instigated official blockades against a plethora of sites. The injunctions force internet service providers to stop their customers from accessing websites deemed by a judge to be liable for rampant copyright infringement.

Opinion is divided on how successful web-blocking has been to date, though everyone agrees on one thing: the fundamental flaw of the process is that it is really easy to find ways to circumvent the web-blocks with a simple Google search. If the search engine could be persuaded or forced to play its part in maintaining the blockades, web-blocking could be an anti-piracy tactic way more effective than us cynics ever anticipated being possible back in the early days of file-sharing.

But to date, Google has refused to participate. So if you Google “The Pirate Bay” – a site blocked in the UK – the second listing links through to a webpage which in turn lists numerous so called proxy services which enable web-users to access the always controversial file-sharing platform. Yet Google gets tetchy whenever things like this get mentioned in public. In an open letter to the European Commission earlier this month, the Rupert Murdoch-controlled publishing powerhouse News Corp described Google as a company “sometimes contemptuous of intellectual property”.

Not so, the web giant quickly fired back through a blog post. “Google has done more than almost any other company to help tackle online piracy”, it said, noting its good record in responding to takedown requests issued by rights owners, it’s work on prioritising legit content sources in the Google search algorithm, and the ContentID rights management system built into YouTube. Rights owners like such initiatives, of course, but would argue that the list misses some fundamentals.

As the boss of the International Federation Of The Phonographic Industry, Frances Moore, said back in January: “The truth is that, whatever Google’s claims to be helping tackle infringement, they are not showing convincing results. Research indicates that search engines are a major gateway to illegal music. The Digital Entertainment Survey 2013, from law firm Wiggins, noted that 65% of internet users accessing infringing content regularly use search engines to locate it. We would like to see Google and other search engines play a more responsible role in encouraging safe and legal use of the internet”.

The single biggest thing Google could do is start automatically delisting any website that a court of law has decreed is liable for widespread copyright infringement, ie those which are web-blocked. When lyrics service Rap Genius broke Google’s own SEO rules late last year the web giant did a very good job of exiling the site from its search engine. So why not, the record labels and music publishers ask, the websites that have been confirmed as copyright infringers in court?

Because that single measure – delisting web-blocked sites and the proxies linking to them – would revolutionise the web-blocking tactic for battling piracy. Of course, serial file-sharers are always five steps ahead, but that’s not who web-blocking initiatives are trying to stop. Anti-piracy campaigns like this are aiming to redirect more casual mainstream web-users towards legit download and streaming platforms.

It is slightly odd that Google seems so opposed to this measure; to the extent that it won’t even enter into a public debate about the challenges of such a proposal (geography might be one limitation, as injunctions only ever apply in one territory, and it’s understandable the web firm wouldn’t want to act without judicial guidance). Needless to say, a request for comment in this article was not returned.

But it’s clear now that, as far as the music industry’s lobbyists in the UK are concerned, Google is target numero uno. Mike Weatherley MP’s recent report on search engines and piracy has put the issue on the agenda in Westminster, while in Whitehall, Culture Minister Sajid Javid, strategically picked to speak at the recent BPI AGM, indicated it was on his check list too.

Google, of course, has very competent lobbyists itself, and in the short term they need only procrastinate things a little to kick the whole thing beyond the 2015 General Election. Though the record labels and music publishers possibly hope that a little tough talking from law-makers like Javid might be enough to force Google’s hand. Some test litigation – adding Google to a web-block injunction – might also have an impact.

Confirming that, for the record industry, this is definitely a key issue, BPI boss Geoff Taylor told CMU last week: “Google’s efforts to address piracy have so far been, in the words of the Culture Select Committee, ‘derisorily ineffective’. The recent report from the Prime Minister’s IP Advisor, Mike Weatherley, set out a series of measures search engines should take to stop helping the online black market and instead promote legal sites that are safe for consumers”.

Leading with the delisting of web-blocked sites, but adding some other measures to the list too, Taylor ran through all of Weatherley’s key proposals: “These include delisting sites that courts have ruled are illegal; promoting sites that are licensed and using trust marks to help consumers identify legal sites; keeping the promise to de-rank sites they have been told thousands of times are illegal, or which the police have notified as illegal; and making sure they do not support illegal sites with advertising. These are simple to fix. We hope that Google and other search engines will now engage constructively to make progress on these issues”.

Lots for Google to be getting on with then. Though, in my mind, delisting web-blocked sites from search results is the single biggest thing Google could do to placate the record industry in 2014.