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WSJ Online writes on "YouTube Finds Signing Rights Deals Complex, Frustrating."
But, even with those deals [with major TV and record companies] in place, YouTube executives are finding it a slog to get all of the necessary permissions to license the songs and shows users are putting on its site. Most of YouTube Inc.'s agreements with record labels don't address royalties for music publishers, who control the copyrights to the words and music underlying the recordings. YouTube or its partners must locate parties ranging from studios to actors, and from music composers to the owners of venues, and get them to sign off. Where they don't succeed, YouTube risks being hit with lawsuits or having to take popular content down.
"It's such a mess because the [entertainment companies] have all of these valuable assets that are just locked up with so many people who need to sign off on them," says YouTube Chief Executive Chad Hurley. YouTube isn't the only one; this has been a big problem since the beginning of the Internet. Indeed, one reason the labels were slow to develop online services was the difficulty of getting agreement on rights from millions, literally, of interested parties, each of whom had big ideas about the worth of his/her particular contribution.
The labels knew this could be a bonanza, but simply could not do the transactions, conspiracy theories to the contrary. Only after the P2P deluge forced rights holders to get serious could progress be made.
The YouTube CEO added: "I don't know what it requires, if the government needs to be involved," Mr. Hurley laughs. "I don't know." Loath as we are here at PFF to suggest government solutions, it may well be that some government action is needed here, even if it is only to force the creation of registration databases so that people can find who owns what. This would involve cutting off rights of those who do not step forward. But it would be useful to hear the views of the parties trying to create markets -- what do they need to make it all work?
posted by James DeLong @ 11:41 AM | Markets: Business, Investment & Innovation
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