online piracy | Vox Indie

YouTube’s Paid Channels are Here and a Counterfeit Cleanup is Past Due

Last week YouTube made official what had long been rumored and announced a new slate of paid channels.

Starting today, we’re launching a pilot program for a small group of partners that will offer paid channels on YouTube with subscription fees starting at $0.99 per month. Every channel has a 14-day free trial, and many offer discounted yearly rates. For example, Sesame Street will be offering full episodes on their paid channel when it launches. And UFC fans can see classic fights, like a full version of their first event from UFC’s new channel. You might run into more of these channels across YouTube, or look here for a list of pilot channels. Once you subscribe from a computer, you’ll be able to watch paid channels on your computer, phone, tablet and TV, and soon you’ll be able to subscribe to them from more devices.

While this announcement is potentially good news in that it offers content creators large and small new ways to monetize their work, unless YouTube purges pirates from the site, it’s is a business model that remains tainted.

I’ve written previously about the various ways YouTube enables (and reaps profit) from movie piracy. With the latest announcement paid YouTube channels, I thought it worth looking at yet another example of their dirty laundry. This time it’s an Argentina-based website that uses popular movie trailers on YouTube to attract customers to its online store selling bootleg DVDs and video games.

I came across the illegal site when I viewed a trailer the French indie film “Tomboy” uploaded to YouTube. The user had uploaded a number of trailers to his YouTube channel and in the description for each, included a link to his illegal website. To add insult to injury, the trailers featured not only a link to the bootleg site but included a its own splashy animated logo edited in.

Here’s the description translated from Spanish:

www.xtopsite.com where you can find the last extrenos on DVD
new http://www.xtopsite.com
Pre release movies 20000 retro releases and unpublished
4000 concerts in Argentina and worldwide with the best sound
1500 Complete TV series, so you can finish watching it so steep that you got
20000 MP3 bands and musicians to upload your best technology
20000 programs to make the impossible possible
20000 playstation xbox360 wii chipiadas for your consoles to play online against worldwide
shipments at home just as fast in 24 hours on market
The best prices, the best quality, over 15 years as leaders in the market $ 3. – C / u cd $ 5 – c / u dvd
Promo: if pedis 100 units or more makes you a discount of% 25. -
orders effected only by form: http://www.xtopsite.com

When I navigated to the website, I found this, a virtual storefront that looks legit enough, but isn’t. How could I tell? Well, the first clue was the DVD for the film “42″ which just recently appeared in theaters. ”42″ is not scheduled to be released on DVD until this summer, August 2013.

The movie “42″ will be released on DVD and Blu-ray in August of 2013.

This site also sells (bootleg) Xbox games, along with advice for finding cracked serial numbers online.

Here’s the specific advice (translated from Spanish):

Clearly these pirates are using YouTube as a means to advertise and drive traffic to their illicit business. Since it’s based in Argentina, they can operate openly with little fear of closure since the country is notoriously lax on piracy. An article published on smartplanet.com sums it up pretty well:

Argentine websites and physical markets questioned for distributing pirated and counterfeit material shows how relaxed local attitudes are toward intellectual property. Students regularly buy photocopies of entire college texts rather than pay for the book, while several Buenos Aires parks fill on weekends with vendors openly selling pirated computer software.

Part of Argentina’s fertile culture of piracy is inspired by a belief that intellectual property rights can be sacrificed in the name of helping the poor and forgotten against large corporations; part is caused by Argentina’s lax enforcement of intellectual property laws; and the rest comes from the country’s isolating economic policies, where import restrictions and high import taxes make buying genuine foreign goods prohibitively expensive.

The Office of the U.S. Trade Representative has placed Argentina on its “watch list” citing copyright infringement as one concern, “However, serious problems persist, including widespread availability of pirated and counterfeit goods, an inefficient judicial system, and a failure to adjudicate civil and criminal cases and impose deterrent level sentences…overall levels of copyright piracy continue to present a problem, as reflected, for example, in a reported growth in piracy over the Internet.”

So while the United States is concerned that Argentinian authorities inaction against IP theft and piracy, a U.S. based company like YouTube help them facilitate it without a problem? As a business that abides by U.S. law, should YouTube/Google do more to prevent an illegal enterprise from using their website to promote/distribute illegal goods?

According to YouTube’s own “Terms of Service” (and I assume U.S. law) the company bears no responsibility in these situations:

The Service may contain links to third party websites that are not owned or controlled by YouTube. YouTube has no control over, and assumes no responsibility for, the content, privacy policies, or practices of any third party websites. In addition, YouTube will not and cannot censor or edit the content of any third-party site. By using the Service, you expressly relieve YouTube from any and all liability arising from your use of any third-party website.

In addition to their “Terms of Service” YouTube offers users a bit more guidance via their “Community Guidelines,” but here, the only reference discouraging “illegal” activities are “Dangerous Illegal Acts” like bomb making and sniper attacks. Nothing about operating illegal bootleg/counterfeiting operations.

Is the situation any different with YouTube’s parent company Google? Not really since Google’s terms of service follows the same murky (though apparently legal) path.

If the bootleg site is in Iran, Cuba or the Sudan, it seems Google may be forced to act, otherwise, despite lip-service that frowns on “dangerous and illegal” activities, linking to illegal businesses is A-OK. If I’m interpreting the verbiage correctly, bootlegging DVDs is not dangerous per se (which obviously it’s not), then the illegal part is moot. Though Google terms state that users aren’t allowed to create websites, ” that have the primary purpose of redirecting visitors, acting as a bridge page, or driving traffic to another website” it appears that the company does little to stop this activity, at least on YouTube.

Commercial Activity

You may use Google Sites to create websites for your business or to promote your products or services, unless you are in Cuba, Iran, or Sudan. There are some commercial uses we don’t allow. We don’t allow websites that have the primary purpose of redirecting visitors, acting as a bridge page, or driving traffic to another website. We also don’t allow websites that have the primary purpose of profiting from displaying ads from any publisher network, such as sites created with little or no unique content and exist only to display ads.

Copyright

It is our policy to respond to clear notices of alleged copyright infringement. More information about our copyright procedures can be found on this page: http://www.google.com/sites_dmca.html

Unlawful Use of Service

Our products and services should not be used for unlawful purposes or for promotion of dangerous and illegal activities [emphasis added]. Your account may be terminated and you may be reported to the appropriate authorities.

The U.S. Customs and Immigration Enforcement (I.C.E.) has been seizing web domains as part of an ongoing effort to battle counterfeiting across the globe. Perhaps its time to examine the mechanisms by which U.S. companies indirectly aid such criminal enterprises as well? Why not engage some of our own companies in a discussions aimed at reducing their role in enabling these criminal activities?

On another front, why not enlist the YouTube community in helping to report these questionable sites? YouTube has a system whereby users can flag material deemed to be in violation of “rules:”

Users report content that may violate YouTube’s rules by flagging it. YouTube’s rules are outlined in ourCommunity Guidelines. YouTube staff review flagged videos 24 hours a day, seven days a week. When a video is reviewed and determined to violate our Community Guidelines we remove it.

YouTube seems to have no problem allowing its users to flag innocuous kissing scenes from lesbian/gay tv shows and movies, why not give its “community” an easy way to flag material actually links to illegal content–content that does harm? According to YouTube’s community guidelines:

We Enforce These Guidelines

Okay, this one is more about us than you. YouTube staff review flagged videos 24 hours a day, seven days a week to determine whether they violate our Community Guidelines. When they do, we remove them. Sometimes a video doesn’t violate our Community Guidelines, but may not be appropriate for everyone. These videos may be age-restricted. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination. If your account is terminated, you won’t be allowed to create any new accounts. For more information about how the Community Guidelines are enforced and the consequences of violating them, please visit the Help Center.

At present, it’s pretty much impossible notify YouTube about the illegal linking scenario I’ve described in this post because 1) it’s not a “dangerous and illegal act” 2) it doesn’t infringe “my rights.” When I tried to flag the trailer and alert YouTube that this YouTube channel linked to a counterfeit site I was met with a form that required information (like an actual hyperlink to the law being infringed) and legal standing that I don’t posses.

Clearly YouTube doesn’t want to be deluged with false claims, but making an option available for users to report a legal issue that does not involve one’s own trademark or copyright would help.

There may be other technological ways to vet questionable links. Google seems to achieve wonders with its search algorithms. Why not utilize technology to ferret out links to dubious websites posted on their pages? Google regularly labels sites as “compromised” on search results. Of course, when it comes to others attempting to crackdown on criminal websites listed via their search engine Google likens this to an attack on “free speech.”

For now, it seems Google has no legal obligation to worry about its role in facilitating illegal activity like bootleg DVD sales. After all, sharing links to infringing streams and downloads is allowed to fly under the radar, so is it any surprise other savvy pirates link to their sites selling bootlegged copies? Moving forward, one can only hope Google representatives begin to acknowledge this problem and begin to develop efficient and thoughtful ways to deal with it. If Google wants YouTube channels to become a legitimate and profitable means of distribution for content creators, why not get rid of those YouTube users whose activities undermine the livelihoods of these same creators YouTube is attempting to woo?

Kim Dotcom’s Truth = Nothing but Lies

Megalomaniac Kim Dotcom is at it again. With a launch of a new campaign announced via an all caps headline screaming that “THE TRUTH WILL COME OUT!” on his website, he’s ratcheted up his assault on the big, bad U.S. government, the so-called “copyright lobby” bogeyman and everyone else who views him as the criminal thug that he is.

As part of his campaign to get out his (version of the) truth he’s published a “white paper” called “Megaupload the Copyright Lobby and the Future of Digital Rights.”

In it he claims the case against him “represents one of the clearest examples of prosecutorial overreach in recent history.” He takes particular aim at the White House, claiming his arrest was “propelled by the White House’s desire to mollify the motion picture industry in exchange for campaign contributions and political support.”

He goes on to claim that it’s a case of him and “digital rights advocates, technology innovators and ordinary information consumers on the one side, and Hollywood and the rest of the Copyright Lobby on the other.” He characterizes his highly profitable pirate website as a wonderful public service, with piracy only a minor concern.

Megaupload operated for seven years as a successful cloud storage business that enabled tens of millions of users around the world to upload and download content of the users’ own choosing and initiative. The spectrum of content ran from (to name just a few) family photos, artistic designs, business archives, academic coursework, legitimately purchased files, videos and music, and – as with any other cloud storage service – some potentially infringing material. [emphasis added]

How about some real truth about Megaupload? Until its takedown in January of 2012 it was the largest and most profitable repository of pirated content in the world. Contrary to claims made in his “white paper” Dotcom’s business model was dependent on content theft to drive traffic to, and generate income for, the site. The pirated content on Megaupload included music, movies, e-books and more–and represented the creative work of artists, filmmakers, authors and musicians across the spectrum.

For Kim Dotcom it’s easy to create propaganda that points to the big, bad MPAA or RIAA as the enemy…after all they are in the business of making money right? Well, the fact is, so is Mr. Dotcom and, unlike Hollywood, he doesn’t play by the rules. Why invest in content (and employ thousands to make it) if you can just steal it?

As an independent filmmaker I’ve had plenty of opportunities to witness first hand the piracy supported by Mr. Dotcom’s illegal enterprise, and it wasn’t pretty. Our film, like thousands of others, was easy to find on Megaupload as a free download or streaming in HD, complete with subtitles in various languages. Meanwhile it could be also be streamed or downloaded (with subtitled versions) on legit sites like iTunes, Amazon, Netflix, Busk Films and others portals worldwide.

The difference between these legit online distributors and Dotcom’s Megaupload was that we earned income from our film’s distribution on the legit sites while it was Mr. Dotcom (and his uploading minions) that profited from our film on Megaupload. For indie filmmakers like us who don’t have theatrical releases, back-end distribution is the only way to recoup expenses. Megaupload’s pirated offerings forced filmmakers like us and other content creators to compete against FREE versions of their own creations. How crazy is that?

Despite his splashy spin minimizing the amount of “infringing material” disseminated through Megaupload (and Megavideo), the fact is that without stolen content, he would not be the “Mega” millionaire he is today.

How did the illicit Megaupload business model become a profit machine? Well, it’s helpful to think of a company like Amway. Amway’s business success popularized the multi-level marketing style pyramid business model (or scheme ) whereby the operators at the top of the pyramid recruit people to work for them. They, in turn, recruit more workers who, in turn, sell products to the public. Those at the top make money only if they can recruit, and keep, enough people below to do the actual work. Those doing the bulk of the work earn money, but at a much lower rate than those at the top. It’s the trickle up theory of profits.

Megaupload’s business was predicated on offering enticements to users (uploaders) to join this type of piracy-4-profit pyramid. This approach was essential to maximizing the number of visitors to the site. Another essential part of this equation was making sure the UCG (user generated content) that would attract eyeballs. Sorry, but your ” family photos, artistic designs, business archives” wouldn’t do the trick. No what better UGC carrots than popular movies, books or music? Dotcom didn’t seem too worried about copyright thanks to the “safe harbor” provision of the DMCA that allow UGC sites to easily look the other way (plead ignorance) when it came to vetting infringing content.

In order to set this eco-system into motion, Megaupload lured its worker bees. Simply put, the more downloads users generated for each file, the more money/rewards they earned. These rewards precipitated the next, and most insidious stage of piracy—the viral spread of infringing links. With dollar signs in their eyes, Megaupload’s affiliate armies took their links and posted them on web Warez forums far and wide. The more Megaupload links they “shared” across the web, the more money they made.

Pirate forum search results for new indie film showing more than 300 posts “sharing” download links.

In other words, Megaupload created, and was dependent on, an army of affiliates to do the dirty work for them. The scenario enabled Megaupload (and dozens of cyberlockers modeled after them) to shield themselves from legal liability, while their servers were simultaneously receiving thousands of (stolen) files every day–fresh content sure to attract new (and returning) customers.

Though the site claimed to respond to takedown requests, Megaupload was in fact playing a shell game, by not removing the actual infringing files and instead generating fresh links to replace those removed via the DMCA process. When Megaupload was first taken down in 2012 I wrote a blog post about this and put together a short video demonstrating how this worked (below).

Megaupload Unmasked from fastgirlfilms on Vimeo.

It’s also important to remember the impact Megaupload’s business model had on encouraging and sustaining piracy profiteering across the web. It’s takedown marked a significant turning point in the fight against online piracy profiteering. As I wrote in an earlier post in response to the launch of Kim Dotcom’s new site Mega:

…when U.S. law enforcement took his popular Megaupload offline a year ago, it marked a significant turning point in the battle against online piracy. Since then real progress has been made. Copy-cat sites that modeled the success of Dotcom’s business model closed their doors. At the same time, more options for timely and legitimate online distribution of movies and music emerged–options both profitable for creators and affordable for consumers. Advertisers and payment processors have also stopped partnering with some remaining pirate cyberlocker sites, diminishing their profits and popularity. Other companies, such as Google, have also had to address their role in aiding, abetting and profiting from piracy. Overall, the lure of online piracy as a cottage industry has been greatly diminished.

Kim Dotcom is not Robin Hood and he’s not a hero. He’s a (wealthy) thief who, thanks to technical know-how and a black market business acumen, was able to exploit the work of content creators across the globe for his own, personal gain. Dotcom’s lies cloaked as “truth” may gain him sympathy from his acolytes, but it won’t change the fact that stealing from others isn’t sharing, it’s theft.

12 Stepping Through Piracy’s Takedown Maze of Madness

[kb_slider Maze]

This past Monday the Wall Street Journal published a thought-provoking piece ”As Pirates Run Rampant, TV Studios Dial Up Pursuit.” Written by Christopher Stewart, the article explored how the television industry, studios, and film distributors are protecting their businesses from the ravages of online piracy. Kathy Wolfe, founder of Wolfe Video, the largest distributor of independent LGBT films in the world, spoke about the challenge of staying in business amid a sea of piracy. She told the Wall Street Journal that she estimates online piracy cost her small company more than 3 million dollars in 2012. In order to prevent that figure from growing, Wolfe spends over $30,000 annually (half the company’s profits) to scan the web for infringing content and send takedown notices. When I spoke with her today, she told me that her company could easily be forced out of business were anti-piracy efforts not in place.

In the meantime, according to Wolfe, they are working hard to develop a robust online streaming business. She says that 38% of their income now comes from online streaming and she expects that percentage to grow “radically” every year. ”Now with our Wolfe on Demand [website], we have a formula that is accessible and affordable,” says Wolfe. She adds that by establishing their own online portal, and not depending on exclusively on other sites (iTunes, Amazon, Hulu, etc), Wolfe can direct a bigger percentage of profits back to the filmmakers.

Despite Wolfe’s success in growing online sales, mitigating piracy has become a fundamental part of protecting their business. ”If it weren’t for our anti-piracy efforts, we certainly wouldn’t be functioning at the level we’re functioning at now,” she says.

After all, it’s still difficult to compete with free and the indie filmmakers who partner with Wolfe (including myself) are fortunate that the company bears the brunt of worldwide anti-piracy efforts. But whether it falls to a small independent film distributor such as Wolfe, or an individual filmmaker, the job of removing pirated content from the web is an onerous (and expensive) one.

Where does one begin? Well, in the example I’m about to outline, these are the 12 Steps a filmmaker would follow in order to remove ONE illegal movie from the web:

Step One: Find the film using Google search.
Step Two: Navigate to the YouTube (Google) channel featuring dozens of pirated movies.
Step Three: From there, click the movie you want and go to the description linking to a Blogger (Google) pirate site.
Step Four: Before you leave YouTube (Google), send a DMCA notice either via Content ID system or email.
Step Five: Navigate to the Blogger (Google) website, click the link.
Step Six: Click past pop-up ads to find the embedded film.
Step Seven: Fill out and send a DMCA notice to Blogger (Google) via online web form.
Step Eight: Click the VK icon on the embedded film to navigate to the host site for the infringing file.
Step Nine: Create an account with VK to find that actual URL of the infringing file
(amid more than 100 other uploads by the same pirate).
Step Ten: Fill out and send a DMCA Notice to VK via the online web form (no email address provided).
Step Eleven: Send a DMCA takedown to Google search to have the original link removed from search (YouTube link) in case Vk.com doesn’t respond.
Step Twelve: Get depressed when you have to begin all over a couple of days later when the Blogger pirate makes a new YouTube channel.

Let’s begin our journey with Google search–unquestionably the world’s most popular path to find links to pirated films. In the example below, I searched for the indie French film “Tomboy.” Thanks to Google, I ended up on a YouTube movie channel with links to more than 100 popular indie films. The films aren’t actually uploaded to YouTube. Instead, a it’s dummy file with the movie poster that includes a link to an external website in its description.

I’ve written before about the fact that YouTube is routinely used by pirates as an efficient means attracting traffic to their pirate websites and the example outlined here is no exception. In this case, the YouTube channel links to an external site also hosted by Google’s on its very own Blogger platform: http://cinegay9.blogspot.com.

If you are an indie filmmaker whose film pirated on this site, how can you remove the link? Well your first step would be to send a DMCA takedown notice to YouTube asking that the link to the pirate site be removed using their online form…

You have to fill in each line but, even when you click and send, your takedown request won’t touch the linked-to pirate’s page even though it’s also a Google entity, in this case a Blogspot.com offering an actual embedded stream of your (pirated) film.

If you click the link below the movie description on YouTube you’ll eventually end up at the pirated blog but, before you can glimpse the page, you’ll have to endure, and click past, a pop-up advertisement featuring ads from a panoply of well-known companies including: Dodge, Network Solutions, Reebok, XBox 360, Norton Software, Comcast and Hootsuite.

After you close the pop-up window, you’ll come to the pirate’s website.

Click the thumbnail for the movie, and after you click through another pop-up advertisement featuring ads from Progressive Insurance, Stanford Hospital, Home Depot, U.S. Forest Service, and Toyota….

you’ll eventually arrive at an actual embedded stream of the full movie:

Ok, so if you’re the indie filmmaker who made this film, what do you do next? Well, before yo leave the Blogger site you can notify Google (again) by sending a DMCA takedown notice to Blogger.

However, even if the Blogger page disappears, the online stream doesn’t. So what’s the next step? Well, at first glance the video is clearly hosted on a Russian site, vk.com (a site like Facebook). However, if you click the VK logo, you don’t end up at actual film, but rather a page full of uploaded (pirated) movies on this pirate’s Vk.com account (seen below).

Click on the film and nothing happens so uncovering the actual stream file and URL seems hopeless. But, if you’re really persistent, there is a way. To do so you must create an account at VK.com (and give up your cell phone number). It’s a major pain involving a text message with a confirmation code, etc.

Once you have an account and log in, you’ll finally be able to navigate to the infringing file and find the actual URL you’ll need to report in your takedown notice.

There’s no guarantee that any of these pages or links will be removed so in order to be totally thorough, you may want to file a DMCA notice to have Google remove the original search result that led you to your pirated film in the first place.

Of course, after all this work, you think you’re finished right? After all, you check back with YouTube and the pirate who started this whole process account has been terminated for “multiple third-party claims of copyright infringement.”

Victory right? Well, not so fast…revisit Google search and you’ll discover that Cinegay9blogspot’s channel has been reincarnated with the user name reotereds. Guess it’s time to start the DMCA takedown process all over again…

YouTube pirate wastes no time in generating a new channel to attract traffic to his blogger-hosted pirate website

Tell me again why artists, photographers, filmmakers and musicians should have to go to these lengths to protect their work from thieves? Wouldn’t our time be better spent creating our art, rather than having to police it so that we can earn a living and afford to spend time to create something new?

YouTube (and Netflix) monetize online piracy

Need more evidence that Google’s YouTube earns income from pirates who upload (and monetize) films for which they don’t own the rights? Well, here’s another example I found today (1/26/13). This time it’s a YouTube user with the moniker “iWatchEpicMovies.” The film in question (one of many the uploaded claimed by the user) is a 1998 Swedish film, released in the United States under the title “Show Me Love.” The original title in Swedish was “Fucking Amal.”

The film was uploaded to YouTube on January 23rd and claimed by the uploader, who asserted “ownership in the following countries: Worldwide.” When you view the film on YouTube it’s monetized with advertising, meaning the uploader and YouTube earn money very view. Not only is the pirated film monetized, but ironically, one of the ads superimposed over the screen is a Netflix ad. So, in this case, Netflix is also benefiting from the presence of this pirated film on YouTube. BTW, Netflix is no stranger to allowing its advertising to be promoted aside pirated movies. I wrote about another recent example of this here.

Pirated film Monetized on YouTube by Google featuring Netflix Ads

Google/YouTube will, as always, claim that it’s the rights holder’s job to police YouTube and to request that infringing content be removed. Of course, in the interim, Google’s happy to make money and Netflix is happy to attract new customers (and make money).

In another ironic twist to this pirated upload, the YouTube user posts this disclaimer “I do not claim copyrights. For entertainment purposes only.” Perhaps “iWatchEpicMovies” should rewrite it to clarify, and say: ”I do not claim copyrights, but I assert ownership (worldwide) for the purpose of making money off something I don’t own.”

Content Leeches-The Dark Underbelly of YouTube’s Content Monetization

Black markets are endemic in criminal culture, so it’s not much of a surprise, given the popularity of Internet commerce, that an illicit economy thrives online. By now we’ve grown accustomed to finding pirated content and counterfeit products marketed on web sites across the world. What’s disturbing is how entwined (and dependent) some of these shady enterprises are on so-called “legit” companies and how complicit such companies have become in creating, sustaining, and profiting from these dubious activities.

Google’s YouTube appears to be one such entity–a respected online portal favored by videophiles worldwide. Yet if you pull back the curtain, you’ll find that the site’s partner program facilitates–and reaps income from–a thriving crooked economy. It’s a racket that financially benefits the uploader, an intermediary and YouTube. Like a leech, its business (survival) model depends on a host (content creator) to thrive.

In a blog post published earlier this week, I outlined an instance where an industrious YouTube user had uploaded and monetized full-length feature films–films they did not own the rights to. In that piece I mentioned other instances I’d discovered whereby a number of YouTube account holders upload and monetize various movie trailers, most likely without permission from the rights holders.

I recently found an example of this activity on YouTube channels published by the user “MyTrailerIsRich.” It’s an ironic, and apt, choice of moniker since his channels boast more than 51 million monetized views. If the trailer isn’t “rich,” this industrious YouTube entrepreneur might be well on his way to becoming so, thanks to his mastery of this monetizing scheme. I call these folks “pleeches” for short–content “pirates” that operate like leeches–hangers-on who cling to, and feed off (the work of) others for personal gain.

Here’s one of this pleech’s channel offerings. Note that it’s easy to navigate to the pleech’s other channels (TV Series, Indie Movies, Documentaries and Sci-Fi Horror) by clicking a handy menu atop the page. To date he’s uploaded 362 videos to YouTube.

One of “MyTrailerIsRich’s” YouTube’s channel featuring trailers the user doesn’t own rights to but earns money off of.

A trailer for a recent indie release “Gayby” has attracted more than 350 views in just one day. Like the other trailers on this channel, it’s monetized with advertising and when I looked to see who claimed the trailer, I found this:

What’s worth noting about claim is that the “provider” is Wizdeo, an actual company based in France that’s serves as an intermediary to those seeking to monetize content online. Using YouTube’s Content Management System I researched the clip’s ”ownership information.” According to the results, Wizdeo has claimed “worldwide” rights to this trailer. There’s just one problem; it’s not true. I spoke with 2 distributors who do own rights (in multiple countries) and neither has given this company permission to monetize the trailer. (This trailer was likely downloaded from YouTube via a distributor’s own channel).

I also found this trailer (shown below) for the upcoming release “A Perfect Ending,” uploaded four days ago (January 9th, 2013). It’s already attracted nearly 2,000 monetized views. Distributors for this film also confirmed to me that they did not give this pleech (YouTube user) or Wizdeo permission to upload and monetize this clip.

YouTube user “MyTrailerisRich” claims this asset (worldwide) through Wizdeo even though he doesn’t own the rights to it.

Wizdeo may well have a number of clients who legitimately own the content they upload, but since I’ve verified that this pleech does not own the rights to these trailers, it begs the question: What exactly does Wizdeo do to monitor compliance with its terms and, in turn, what does YouTube do to make sure that third-parties such as Wizdeo comply with YouTube’s terms of service? In this situation, it appears to be a case of “Who’s on first?”

Wizdeo’s terms for acceptance in their partner program includes the following language:

We will review your application before you notify our acceptance or refusal. We may reject your application if we believe that your string is not consistent with these terms and conditions…

(B) in any way violate the intellectual property rights. You must not distribute videos on your channel protected by copyright, which you are not the author, nor include in your video content that you do not have rights if you do not get authorization holders rights…

If a partner violates these terms, supposedly their account can be terminated:

In addition to any other rights or remedies available to us, we can at once or as the case may terminate this Program if we determine that you or other people, we establish that they are your affiliates or act in concert you (either as part of an existing partner account, either as part of a previously terminated account Associate)

do not comply with any requirements or limitations described in one page “Requirements for participation in the Program Partners” or have otherwise violated these Terms or any Documentation operating

have breached the Agreement distribution of audiovisual programs on the Internet, confirming your membership in our program,

Essentially, Wizdeo allows its users to create an account and then utilize Wizdeo’s drop-box account to upload content directly to YouTube. Using this setup, Wizdeo also acts as the financial intermediary (or bagman) and collects the resulting ad revenue from YouTube. They keep a portion of the proceeds; the uploader (in this case the pleech) gets a share, and YouTube/Google the rest. The actual rights holder earns zero.

In their terms of service, Wizdeo claims the company does not tolerate copyright infringement but it’s a claim that rings hollow. I spoke with a representative from another U.S. distributor who owns rights to a trailer that’s also posted on one of MyTrailerisRich’s YouTube channels. He said the company was familiar with Wizdeo and has had ongoing problems with them for the very reasons I’ve outlined. He told me that when the studio’s content management staff discovered trailers uploaded and erroneously claimed by Wizdeo, they corrected the claim via their YouTube CMS dashboard. Despite owning no rights for the trailer, Wizdeo reinstated the claim forcing studio staff to contact the Wizdeo tech department (in France) directly. If a distributor can’t come to an agreement to correct the claim, YouTube requires the aggrieved party to go to court if they want the video removed permanently. This can be an expensive proposition, particularly for those without deep pockets (like indie filmmakers).

Meanwhile, according to my source, they’ve made little progress in forcing Wizdeo to drop their false claim(s). It’s obvious as to why. The longer Wizdeo drags their feet, the more money they make. My source explained that if, and when Wizdeo does eventually give up, the company knows it’s not likely to face any real consequences. Meanwhile, the cash keeps coming. Reviewing their terms of service, it becomes obvious that in this instance, Wizdeo’s legalistic homage to honoring copyrights is boilerplate bull.

YouTube instructs a rights holders to use their DMCA takedown procedure when they come across this situation and routinely ignore any direct correspondence on the subject. They also won’t acknowledge how much income is derived from this illegal commerce, nor do they refund any of the resulting income to a video’s rightful owner. As is typical for YouTube/Google, it’s a matter of “see no evil, hear no evil, speak no evil” when it comes to this dubious activity. Meanwhile, company balance sheets continue to grow. Missing from this scenario is the fourth monkey, “do no evil.”

Content monetization is a business model that works well for both those who seek legitimate profits, and those seeking illegitimate ones. For YouTube and its stockholders, the difference between the two is apparently irrelevant. This despite their own “YouTube Partner” criteria:

You may not be able to monetize videos which use any of the following without the explicit permission of the person who created or produced all material:

Music (including cover songs, lyrics, and background music)

Graphics and pictures (including photographs and artwork)

Movie or TV visuals

Video game or software visuals. Click here for details.

Live performances (including concerts, sporting events, and shows)

For more information about content copyright requirements, please review the resources here.

YouTube also specifically includes movie “trailers” in its explanation of “what is copyright:”

Some examples of potentially infringing content are:

TV shows

Music videos, such as the ones you might find on music video channels

Videos of live concerts, even if you captured the video yourself

Movies and movie trailers

Commercials

Slide shows that include photos or images owned by somebody else

What you have here is a crime that falls through the cracks, not obvious at first glance, but insidious nonetheless. It’s a criminal business model that has seemingly become routine. YouTube can deny responsibility since Wizdeo provided the interface to upload and monetize the video, and Wizdeo can claim that it’s the “partners” who violated their terms of service by uploading content that’s not their own. Where exactly does the buck stop? Is this the sort of “safe harbor” envisioned by those who crafted the DMCA? Is it really acceptable for YouTube and Wizdeo to look the other way while pocketing loads of cash from what is clearly illegal activity?

Imagine how much money you could make if the dancing cat videos you uploaded to YouTube got 51 million hits? Some will argue that trailers are designed to publicize films and that this viral marketing is good for business. Of course having one’s trailer on YouTube is good for business. If I search YouTube for “Gayby” or “A Perfect Ending” I can easily find and view the legit versions uploaded by the film’s distributors. In fact, I can embed one right here on this website.

Theres no doubt viral marketing has become a fundamental part of modern-day film marketing. In most cases, distributors have no problem with YouTube users who upload and share trailers to films, but it should be left to the rights owner to monetize them, not the uploader or intermediaries. As host of the site, it’s reasonable that YouTube share in any revenues for legitimately claimed trailers, but beyond that, it’s basically theft.

Remember, even those who developed the Creative Commons license options have made the distinction clear. Creative commons licensors may be happy to allow sharing with attribution, but generally not content commercialization without compensation. The recent kerfuffle over Instagram’s proposed changes in their terms of service was also sparked by the fact its users did not appreciate the idea that the company would monetize uploaded photographs without permission.

This activity has clearly evolved into a cottage industry on YouTube and it’s clearly “good” business for their bottom line– but the question remains, is it an ethical way of doing business? Not so much.