As President Barack Obama recently learned, it’s hip to be anti-pirate. But claiming anti-piracy as your life’s existence? That’s just so antagonistic.
Companies that have won the trust of major networks and studios have been giving copyright protection a much-needed dose of nuance recently. In a world in which users are going to upload content each and every time you fail to reach them at exactly the moment they want to watch it, these companies have persuaded content owners to start to think of so-called pirates as viral marketers.
The Missed Opportunity of Unofficial Views
Monetizing unauthorized uploads requires a copyright holder to upload everything it wants watched to a fingerprinting vendor. The fingerprinting vendor also scans live TV, especially for time-sensitive events, like sports. Those two sources constitute an index key that the fingerprinter can reference while combing through web video sites looking for a match — or a sample, a poor copy, or a mashup. Then, if the content holder has agreed in advance, the fingerprinter can leave the unlicensed version up, and overlay links to the official version (basically, house ads) and/or monetize the clip with additional advertising.
Unofficial uploads of premium content are often more popular than official ones. For instance, though Avril Lavigne’s official version of her music video for Girlfriend is the most-viewed YouTube video of all time, TubeMogul recently measured that just 39.5 percent of the some 1 billion views of her videos and other people’s videos using her songs on YouTube come from official uploads.
Turning anti-piracy into rights management is really starting to resonate for content holders, and vendors are quickly cutting deals to ensure they are compatible with each other. After all, monetizing an unauthorized upload requires the participation of the content holder, the video site, the fingerprinter, and the advertiser or someone representing the advertiser. You need to lay a little groundwork in order to make that happen.
In recent weeks, advertising management provider FreeWheel, a company founded by former DoubleClick execs to focus on ad sales rights for video, cut deals with competing fingerprinting providers Attributor and Vobile, while meanwhile Vobile partnered up with ad network YuMe. FreeWheel works with CBS, Warner Bros., Veoh, Joost, blip.tv and Sling, while Vobile works with 56.com as well as many movie studios, and Attributor works with Turner Broadcasting. Elsewhere, Auditude works with MySpace, MTV and Warner Bros; BayTSP and Audible Magic are getting in the game as well. And those are just the deals that have been publicly announced; most of this goes on behind closed doors.
But YouTube was actually first to market with such a technology, with its Content ID tool released in October 2007. By developing its Content ID system in-house (and with some help from Audible Magic) and combining it with its own ad sales, YouTube laid much of the groundwork. YouTube says its Content ID system is broadly adopted, though fingerprinters allege they find unauthorized uploads on the site every day. One vendor said as much as 35 percent of unauthorized video uploads for a given copyright holder are on YouTube. YouTube has said that 90 percent of cases of it discovering content partners’ infringement is identified, content owners choose to fight back with ads rather than takedown notices.
Nearly everyone in the sector intimates that they’re talking to YouTube about providing their services to strengthen Content ID and enable more rightsholders to come onto the site with their fingerprint index and advertising management tool of choice. Of course, nobody can say that such a deal is done. And YouTube is truly the big kahuna in this market. It would be hard to succeed without signing them up.
Let’s Not Get Ahead of Ourselves
But some players have found that turning pirates into marketers is still a bit too leading edge.
Auditude, which achieved some early notoriety for signing MySpace and Viacom to monetize unlicensed uploads, has found that its “attribution ads,” which link users to official version of what they’re watching, win above-average 1.2 percent click-through rates. However, Auditude is currently deemphasizing viral tracking. CEO Adam Cahan says there’s a bigger opportunity to show premium content owners that they can make money through distributing their shows and movies online themselves.
“What it boils down to is, little premium content is officially distributed because there are challenges monetizing that content,” he said. “Once content owners realize the tools are there to enable and streamline advertising, we see they are much more willing to bring their assets online. The more content provided in an accessible and audience friendly manner, the more we see value migrating away from what is today ‘unofficial’ towards ‘official.'”
FreeWheel co-founder and co-CEO Doug Knopper agreed. “User copies will be a critical way to increase exposure, but that’s a second-tier problem,” he said. “Managing advertising in a syndicated world” is the first order of business.
Still, linking UGC and premium video is an ample opportunity on its own. YouTube didn’t build its enormous and insurmountable traffic lead with premium content. But today, as it builds out its Hulu-like library with Content ID partners like CBS and Lionsgate, you can see the pieces of the ecosystem falling into place.
This article also appeared on BusinessWeek.com.