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Maybe EMI aren’t the bad guys on the Newport / Empire State of Mind takedown after all

By on August 24, 2010

You may remember that a pastiche of Jay-Z’s Empire State of Mind based on the Welsh town of Newport hit the web a couple of weeks ago, got incredibly popular and then was promptly shut down by EMI.

If you don’t remember it, here’s a refresher: Is EMI as stupid as Constantin Film as it enforces takedown of the “Newport” video parody? And here’s the track (EMI’s lawyers permitting).

Well, it turns out that the bad guy in this story might not be EMI. It might not even be the original songwriters.

It might be YouTube.

Really? YouTube the bad guys?

To understand the issue, you need to understand something about the music industry. It’s been a while since I covered music, so I may get some of it wrong. Hopefully someone will put me right in the comments.

EMI logo

There are two different parts to a record company. Taking EMI as an example, there is EMI the record label and EMI Music Publishing.

  • EMI, the record label, is all about the artist and his or her performances. They manage the artist’s catalogue, and make money from selling the recordings that the artist makes, among other things.
  • EMI Music Publishing is all about the underlying rights. The lyrics, the music, the whole thing put together. But not the performance.

So, to take one example, the Beatles make money from all the performances of their songs. But only Paul McCartney and the estate of John Lennon make money from the underlying rights on songs where they are the ones credited as songwriters.

Got it. How does that make YouTube the bad guys?

YouTube runs this nifty service called ContentID. It allows rights holders to claim content that others have uploaded. They claim the ad revenue, can overlay links to iTunes or wherever but also get to support user-generated content.

So everyone wins, right?

No.

YouTube only recognises one rightsholder for ContentID: the record label. So EMI the label can claim the revenue from a video that infringes the performance copyright.

Only in this case, it wasn’t a performance copyright, it was an underlying copyright. EMI Music Publishing is the company that needs to claim the revenues for its songwriters, only YouTube gives it no mechanism to do so.

YouTube does acknowledge the music publishing companies as legitimate rights holders, but the only options it gives them is to take the video down or leave it up – they have no way of profiting from the success.

So EMI is in the clear?

I don’t think it is quite as clear cut as that. There was still the opportunity to negotiate directly with the director and performers to cut some form of commercial deal, (and the Guardian lays the blame for the failure to seize that opportunity squarely on the songwriters themselves)

But YouTube, in effect, recognises the rights of the label (essentially the performance) in preference to the rights of the music publisher company (essentially the underlying lyrics and music).

Those music publishing companies have to defend the rights of their songwriters. YouTube gives them a binary option, with no way of collecting their share of the money.

So we can expect lots more of these takedowns as record companies not only fight with YouTube and with consumers, they fight with each other to share the decreasing spoils of music publishing.

It won’t be pretty.

Many thanks to Stuart Dredge for his guidance on this post. Any mistakes are my own – he’s much more expert than me on music. Follow him on Twitter at www.twitter.com/stuartdredge.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com