RIAA comic strip

Filtering user-generated content

A Bear Sterns analyst's report on Google caused a stir early this month by estimating that its YouTube subsidiary made $15 million in all of 2006. One reason for the comparatively paltry sales was YouTube's reluctance to sell ads next to videos with uncertain provenance -- the company had to be sure the clip wasn't violating copyrights before it was monetized. Meanwhile, the entertainment industry was pressing YouTube, other user-generated content sites and file-sharing networks to police themselves, rather than forcing copyright holders to identify and complain about specific files.

These overlapping needs have created a powerful demand for software that recognizes files as they're uploaded onto user-generated sites or swapped on file-sharing networks. Not surprisingly, the tech industry has responded. The Motion Picture Association -- the global version of the MPAA -- is in the final stages of studying video-recognition technologies supplied by 11 firms and a university.

Included are a couple of usual suspects -- Audible Magic, whose customers include the iMesh file-sharing network, and Gracenote -- as well as such globally flavored upstarts as Advestigo, which was founded by a pair of French researchers, and Vobile, whose founders are Chinese engineers.

The basic approach is to assemble a database of unique identifiers for movies, TV shows, music videos and other forms of content, then compare files against this database as they're transmitted online. Within a couple of weeks, the MPA is expected to give several of those technologies an informal seal of approval.

At that point, look for more user-generated sites and file-sharing networks (e.g., StreamCast's Morpheus) to plug in content-recognition technologies and start experimenting with a variety of ways to sell advertising. According to executives at Advestigo and inside Hollywood, the rationale for identifying files has changed dramatically in the past year or so. The major studios used to view video "fingerprinting" techniques as a way to block copyrighted materially from being shared online. Now they see them as the key to building advertiser-supported business models -- they enable content owners to find out who their online audience is, as well as monitoring how ads flow to those viewers.

Much work remains to be done to complete the infrastructure -- for example, studios and content-recognition firms have to build their databases of unique identifiers. But when the MPA's report comes out, it could be the online equivalent of a gun going off in the race to port TV's business model to the Web.

MPA Content Recognition RFI Study Participant Companies

1. Advestigo
2. Audible Magic
3. Auditude
4. Gracenote
5. Intellivision
6. Magix/AudioID
7. NTT
8. Philips
9. Thomson
10. University of St Andrew, Scotland
11. VidyaTel
12. Vobile

http://opinion.latimes.com/bitplayer/2007/03/filtering_userg.html

France’s Ipercast raises $3.3 million for Internet Video Distribution

Paris-based video and IPTV service Ipercast has raised $3.3 million from OTC Asset Management and Siparex. The five-year-old company manages a variety of IP multimedia services, from DRM to electronic programming guides, security, and content distribution network services.

MySpace Making $30 Million/Month

Analyst Richard Greenfield noted today that MySpace is now generating “in excess of $30 million” per month in revenue, with about $24 million in US revenue and $6 million internationally.

Monthly revenues are expected to double over the next year, making for an impressive $60M/month by this time next year.

Jamendo goes Platinum! 1.5 million albums downloaded

Jamendo, the P2P music-sharing site, reports that they have distributed, freely and legally, nearly 1.5 million albums; 1 million through BitTorrent alone. Jamendo supports other P2P protocols including Kazaa and eMule/Donkey.

Jamendo promotes themselves as a free and legal place for artists to distribute their songs. As Jamendo operates under the Creative Commons license, they’ve provided a way for artists to broaden their reach while retaining full ownership of their content.

Audible Magic on Copyright Patrol

By MICHAEL LIEDTKE.
c The Associated Press

LOS GATOS, Calif. (AP) - Vance Ikezoye didn't set out to become one of the digital revolution's top copyright cops when he first began tinkering with the technology that launched Audible Magic Corp.

At first, all he was looking for was a better way to identify songs and advertisements broadcast on the radio. But Ikezoye's ambitions have shifted with the media landscape, positioning Audible Magic to control what can and can't be watched on the Internet. Online video sites are adopting its filtering tools to prevent the kind of copyright trouble that provoked a legal battle between Viacom Inc. and Google Inc.'s YouTube.com.

"It's been an interesting ride,'' said Ikezoye, Audible Magic's 49-year-old chief executive. "We are kind of in the middle of everything, where we are part mediator and part battering ram.''
Audible Magic's system scans online files for copyrighted material, checking against a vast database of audio and video content provided by recording, movie and TV studios. After analyzing the digital fingerprints, Audible Magic determines whether the material has been authorized to be shared on a site like YouTube.

While several other startups are developing their own weapons to combat the unauthorized distribution of copyright music and video on the Internet, Audible Magic has emerged as the early leader of the policing pack. "It's like everyone has to nail their houses together right now and Audible Magic is holding a bag full of hammers,'' said Forrester Research analyst Josh Bernoff.

Privately held, Audible Magic doesn't disclose its financial results. The company employs fewer than 50 people and expects to become profitable this year, Ikezoye said. Despite its Silicon Valley roots, Audible Magic is primarily backed by a Naples, Fla., venture capital firm, Tierra Del Oro, which has invested less than $30 million in the company so far.

Although YouTube and other sites revolve around homemade videos, copyrighted content has also helped attract millions of viewers to the Web.
In January alone, 123 million people in the United States watched 7.2 billion videos online - an average of nearly two videos per viewer each day, according to comScore Inc.'s Video Metrix.
But audiences could dwindle while legal bills rise for Web sites that have been showing unauthorized video clips. That threat crystallized this month when Viacom sued YouTube and Google for more than $1 billion in a federal complaint alleging YouTube hasn't done enough to prevent its users from posting thousands of copyright clips to the site.

News Corp. and NBC Universal recently underscored their growing impatience with the unauthorized use of their video by forming a new joint venture that will distribute their TV shows and movies on the Internet.

Those actions make it more likely that sites hosting online video will have to buy copyright-checking tools from Audible Magic or one of its rivals - a group that includes Gracenote, Advestigo, Auditude and Vobile.

Another startup still in development, Attributor, is taking things a step further by developing software that is supposed to enable copyright owners to scan the entire Internet to uncover the unauthorized use of their material. "Technology like Audible Magic is necessary, but it's still not sufficient,'' said Jim Brock, a former Yahoo Inc. executive who is running Attributor. "It still doesn't get you to the finish line.''

Others remain uncertain whether Audible Magic will be able to protect video copyrights as effectively as it has done with music. "Video recognition creates some new challenges,'' said Dean Garfield, executive vice president for the Motion Picture Association of America, which is still vetting the approach of Audible Magic and 11 other anti-piracy vendors.

To make the leap to video, Audible Magic last year obtained a license for a technology called "Motional Media ID'' that was developed by David Stebbings, formerly an executive with the Recording Industry Association of America.

The company says its patented technology is fast, simple and accurate, though Ikezoye declined to provide details on exactly how it works. "We are very confident our technology will meet the needs of the marketplace,'' said Ikezoye, who was a marketing executive at Hewlett-Packard Co. before breaking away to become an entrepreneur in the late 1990s.

The list of Web sites that have recently bought Audible Magic's copyright-protection tools include MySpace.com, the largest online social network, Break.com, an online entertainment channel catering to men, and Microsoft Corp.'s Soapbox channel.

Online video site Revver.com also has been testing Audible Magic's copyright-screening tools.
YouTube's business relationship with Audible Magic remains a mystery. The San Jose Mercury News last month reported that YouTube had decided to embrace Audible Magic's copyright-checking system, but neither of the companies will confirm a deal is in place. When asked whether Audible Magic is working with YouTube, Ikezoye smiled slyly and said he couldn't talk about it. A YouTube spokeswoman said the company doesn't comment about any technology obtained from outside vendors. "As a company that respects the rights of copyright holders, we expect to continue to take the lead in providing state of the art ... tools and processes for all copyright holders,'' YouTube said in a statement.

Audible Magic already endeared itself to the entertainment industry by developing one of the first solutions for detecting and deterring music copyright violations over file-swapping networks popularized by the original Napster and its imitators. "We had to do something to stop this activity, so it's been gratifying to see how (Audible Magic) has used their technology in an affirmative way,'' said Cary Sherman, president of the Recording Industry Association of America, a trade group that has spearheaded the attack on illegal music downloads.

About 75 universities nationwide now rely on Audible Magic to monitor their networks for the peer-to-peer sharing of copyright music. That number is likely to grow as recording industry and Congress pressure university administrators to curb piracy occurring on their networks. College students accounted for more than 1.3 billion illegal music downloads last year, or about one-fourth of unauthorized activity, according to the research firm NPD Group.

In a show of its appreciation for Audible Magic's anti-piracy efforts, the music industry invited Ikezoye to attend the Grammy awards in 2005. But it's only a matter of time before loopholes are discovered in Audible Magic's copyright protections, predicted Peter Eckersley, staff technologist for the Electronic Frontier Foundation, an online civil liberties group. "It's going to become a futile game of cat and mouse,'' Eckersley said. "For every measure, there is always a countermeasure.''

Unamed (?) News Corp./NBC Universal joint venture: Google’s inside moniker

The full lenght press release here.

YouTube vs Viacom Makes Daily Show

This one is full of ironies. Viacom agrees to air the Daily Show’s take on Viacom vs YouTube, and it appears on YouTube.

Microsoft takes Soapbox private again; will add Audible Magic copyright filtering

Soapbox on MSN Video is leaving beta for a copyright tune-up. The Microsoft user-gen site needs an estimated 30-60 days to implement and test proactive filtering using Audible Magic, spokesman Adam Sohn said.

NBC and News Corp takes on YouTube - with help from MySpace, AOL, Yahoo and Microsoft

By Don Dodge

The LA Times announced that NBC and News Corp are teaming up to launch a new video service to compete with YouTube. At first I thought this was a dumb idea... just like when the record labels decided to launch their own music site to crush Napster. But this is different.

NBC and News corp. will use MySpace, AOL, Yahoo, Microsoft, and others to distribute their video. Don't you think MySpace, AOL, Yahoo and Microsoft will do everything possible to make this attractive, build a huge audience, and crush YouTube? NBC, News Corp, Viacom, and others know who their friends are...and they are all too happy to help.

In my opinion the Keys To Success are:

• Distribution partners - MySpace, AOL, Yahoo, Microsoft. Great! Now add Facebook, BrightCove, and any other cool social site that wants to play.
• Content partners - NBC and News Corp own lots of great content. Now add Viacom, Sony, Time Warner, other TV networks, and film producers. The content must be complete. You must be able to find anything to be regarded as a true destination site.
• Have it your way - The video must be available in short clips, "best of" montages, and full length. Just making the same 60 minute, or longer, shows available on the web will not be very interesting. There are much better ways to experience video...like DVR's, Tivo, DVDs, etc.
• Allow User Generated Mashups - YouTube is cool because you can find short clips of the funniest moments of The Comedy Show, or the best clips of a football game, or a crazy compilation of bloopers. Individuals spend hours editing long videos to find just the right clips. The wisdom of the crowds identifies the winners. The TV and film studios need to find a way to leverage the talent of these consumer editors.
• Multiple business models - They will obviously use advertising, but should also consider pay per play, subscriptions, and rentals like Netflix. This could be a huge revenue stream if they get creative with how to monetize it.
• Flexible pricing - All videos are not created equal. Clips are not worth the same price as full length videos. Old catalog TV shows should have a different price than last night's episode of 24.

Viacom sued over Colbert parody on YouTube

Viacom is misusing U.S. copyright law by forcing YouTube to remove a parody video of The Colbert Report, according to a lawsuit filed against the media conglomerate Thursday.
The video in question is itself a parody of news coverage on Viacom's Comedy Central.

The suit, filed by the Electronic Frontier Foundation in federal court in San Francisco, accuses Viacom of filing a baseless copyright complaint and takedown notice on YouTube, and infringing on the free-speech rights of the makers of the video--activist group MoveOn.org Civic Action and Brave New Films.

The tongue-in-cheek video, called "Stop the Falsiness," uses snippets from The Colbert Report for parody. That approach, the EFF said, is permissable under the "fair use" provisions of the Digital Millennium Copyright Act, just as The Colbert Report uses excerpts from real news shows in its segments.

"If you watch this clip for 01 seconds it is clear that it's a parody and it is fair use," said Corynne McSherry, staff attorney at the EFF, which is working on the case with Stanford University's Center for Internet and Society.

Under the DMCA, service providers like YouTube, which is owned by Google, are immune from copyright suits if they respond quickly to takedown notices filed by content owners.
The suit seeks damages and attorneys' fees, as well as an order allowing the video to be reposted to YouTube. The EFF also has sent a counter notice to YouTube alleging that Viacom's takedown notice was illegal; if YouTube agrees, the video could re-appear on the site within 10 days, McSherry said.

Submitted by Mike

News Corp., NBC pull together to challenge YouTube

News Corp. and NBC Universal plan to announce as soon as today that they are creating an online video site stocked with TV shows and movies, plus clips that users can modify and share with friends.

The two companies enlisted help from some of Google's biggest Internet rivals. The News Corp.-NBC Universal partnership has deals with Yahoo Inc., Microsoft Corp., Time Warner Inc.'s AOL and News Corp.'s MySpace to place videos in front of their collective audience of hundreds of millions.

The new venture could launch this summer.

In addition to Fox and NBCU, Sony has also joined the discussion. There may be a fourth content player (not Time Warner, may be CBS Corp). The project will be capitalized to about $100 million, with each player pitching in with $25 million.

Google continues to alienate big media, letting it slip that its internal nickname for the joint venture is “Clown Co.”

MPAA tech exec VP exits

Hunt's successor not yet named
By WILLIAM TRIPLETT

The Motion Picture Assn. of America's top techie will ankle at the end of the month "to pursue new business and entrepreneurial opportunities," org announced Tuesday.
Brad Hunt, exec VP and MPAA's first chief technology officer, has been a leader on content protection and antipiracy technical initiatives since he was hired in 1999.

Dailymotion (figures 08/2006)

Based upon Bejbaum interview, August 31, 2006.

• 4,000 uploaded videos/day
• 5 million viewed videos
• catalog: 1 million videos
• 8 million viewed pages vues
• 60.000 unique visitors
• bandwidth: 4 and 5 Gbits per sec
• 60 machines containing several clusters: databases, proxies, filers...
• 11 people : 5 technicals, 2 moderators, 4 managers. (25 people in January 07.)

Infringing videos on iFilm could cause problems for Viacom

Even as Viacom sues YouTube for what it describes as "brazen" copyright infringement, some of Viacom's own dirty copyright laundry is being aired. Ars searched one Viacom property—iFilm, which was acquired by Viacom in October 2005 ($49 million )—and found several instances of infringing video hosted by iFilm—content for which Viacom does not own the copyright. Does Viacom hold its own properties to the same standard?

No comment

Google sued by Viacom? I told you so

By DonDodge
http://dondodge.typepad.com/the_next_big_thing/2007/03/google_sued_by_.html

Mark Cuban and I predicted these lawsuits even before Google acquired YouTube. It was just a matter of time. As Mark said today...Viacom can't lose. If they win the suit they get their billion dollars. It is more likely that Google will settle for big bucks before the case goes to jury. Viacom wins either way.

The hundreds of millions that Google has already paid to the other studios can be viewed as out of court settlements. Viacom wouldn't accept that amount..so they sued.

How much is a video worth? - The big problem is that a video is only worth a penny...maybe five cents to YouTube, but it is worth $10 to Viacom. The advertising economics for YouTube only support a video cost of a few pennies per stream. Viacom can sell a DVD for $10. This is why the settlement negotiations just couldn't get done.

Most of you know I was a VP at Napster back in 2000 when the RIAA was suing us. I learned a lot about "fair use", DMCA safe harbors, take down notice rules, and the enormous penalties for copyright infringment. These laws are tough and there is no wiggle room.

Forget all the rationalizations about how YouTube really helps promote the content and Google is providing a great service to help users find it. The courts will hear none of it. What matters is the law and the facts...and they don't look good for Google.

Google should have taken my advice and just done an exclusive advertising deal with YouTube. Google is all about advertising. They didn't need to acquire YouTube to accomplish their advertising objective.

I've seen this movie. I know how it ends. Everybody loses...except the lawyers.
Rich Skrenta has seen this movie too. Rich was at AOL Time Warner and built a subscription music service. It never launched because they couldn't get licenses to the music...Not even from Warner Music which was owned by AOL Time Warner. Does that give you some idea of how hard it will be for Google YouTube to get rights to video? Rich tells the sad tale on his blog.

UPDATE: Umair at BubbleGeneration thinks Viacom doesn't get it. It is all about MicroChunks and new wave marketing strategies. Here is my response to BubbleGeneration;
Viacom is not stupid or backward thinking. They understand the media business very well. They understand that if they take a couple hundred million dollars from YouTube today that they have sold their future business revenue streams.

Sorry, but Mark Cuban is right on this...and so is Viacom. Your new market theories and strategies are just that...theories.

Hey, I was a VP at Napster and fought the RIAA. I know all the arguments about how "sampling" actually improves sales and exposes content to new users who will become paying customers. I believe that is true...but it doesn't matter.

The record labels and film studios own the content and copyrights. They get to decide how their content will be distributed and exposed. They decide. Not you, not me, not Google...the copyright owner decides.

The problem is one of value. Record labels value a song at about $1.00 and film studios value a movie at about $10.00.

Advertising business models can't support that kind of cost/value. YouTube's advertising model can only support a few pennies per stream. Viacom thinks a YouTube video stream is the equivalent of a lost DVD sale, or $10.00.

Google/YouTube can't close the value gap with advertising revenues or new marketing theories.
Believe me I know the theories and have fought the fight. It doesn't work in practice or theory.

SEMEDIA

Yahoo! Research Barcelona lidera un proyecto para desarrollar herramientas de búsqueda de vídeo aplicables a los entornos audiovisual y online.
El nuevo proyecto denominado SEMEDIA está cofinanciado por la Unión Europea. El consorcio está formado por 9 partners: BBC, TVC (Televisió de Catalunya), Yahoo! Iberia, Smoke & Mirrors, DVS, FBM-UPF, JRS, UG y UPC

18 Reasons why Google and YouTube are Guilty of Copyright Infringement

Below, Viacom's argument as presented in their official complaint, filed in New York federal district court.

1. YouTube's value is largely based on infringing works.
2. Google maintains control over YouTube's business, and contributes to YouTube's infringement by syncing Google Video search with YouTube's library.
3. Although individual users are the ones to upload videos, YouTube copies the videos to its servers, indexes the metadata, and creates thumbnails. YouTube then publicly displays and performs the infringing works. The complaint: "Thus, the YouTube conduct that forms the basis of this Complaint is not simply providing storage space, conduits, or other facilities to users who create their own websites with infringing materials. To the contrary, YouTube itself commits the infringing duplication, public performance, and public display of Plaintiffs’ copyrighted works, and that infringement occurs on YouTube’s own website, which is operated and controlled by Defendants, not users." (* This is an important point, since Google has argued -- as any ISP or file storage provider would argue -- that they are not liable for illegal actions taken by users, as they are not aware of that activity until notified by a third party.)
4. Embedded videos and e-mailing vidoes from YouTube constitute public performance, too.
   
5. The embedded videos that attract the most users are copyrighted works, and YouTube displays its brand over them.
6. YouTube doesn't have a license for these works.
7. "Defendants have actual knowledge and clear notice of this massive infringement, which is obvious to even the most casual visitor to the site. The rampant infringement of Plaintiffs’ copyrights on YouTube is open and notorious and has been the subject of numerous news reports." (* Should this case go to trial, Viacom will have to somehow prove that Google has continuous knowledge of the infringement. Seeing that there are infringing works on the site and seeing that fact in a database that you monitor are two different things.)
8. It's not like the infringement is a secret, since keywords pointing to copyrighted works are apparent in the tags, and since the content owners' logos appear in the works.* Anecdotal? I'm sure Google could argue that they can't possibly police tags and visual clues, especially given that several content companies upload their own material for various reasons.
   
9. "YouTube derives advertising revenue directly attributable to the infringing works, because advertisers pay YouTube to display banner advertising to users whenever they log on to, search for, and view infringing videos. Through the embed function and in other ways, infringing videos also draw users to YouTube’s site in the first instance, and YouTube then derives additional advertising revenue when those users search for and watch other videos on the site. In either event, there is a direct causal connection between the presence of infringing videos and YouTube’s income from the additional “eyeballs” viewing advertising on the site. The draw of infringing works has also made an enormous contribution to the explosive growth of YouTube, resulting in the remarkable $1.65 billion valuation Google placed on it only a short time after its founding. Thus, infringement of Plaintiffs’ works contributes substantially and directly to the value of YouTube’s business."
   
10. YouTube has the right and ability to control the videos on its site, and even imposes terms of use on uploaders. YouTube also proactively removes pornography.* The active policing of pornography is a big point. Google/YouTube is obviously able to apply some content standards, but only when it suits their purposes it would seem. However, Google may be able to argue that the detection of porn -- via filters that monitor skin tones and/or keywords -- is different from detecting the wide variety of copyrighted works that are uploaded.
    
11. YouTube also sends cease and desist letters to persons and companies that provide services allowing people to copy videos off YouTube's servers. YouTube does this because they can't profit if users don't come to the site. "Thus, when it is in YouTube’s financial interest to do so, it proactively polices conduct it regards as unauthorized, even on other websites."
    
12. "In stark contrast, because it profits directly from the infringement of Plaintiffs’ works on its website, YouTube has failed to employ reasonable measures that could substantially reduce, or eliminate, the massive amount of copyright infringement on the YouTube site from which YouTube directly profits. Even though Defendants are well aware of the rampant infringement on the YouTube website, and YouTube has the right and ability to control it, YouTube’s intentional strategy has been to take no steps to curtail the infringement from which it profits unless notified of specific infringing videos by copyright owners, thereby shifting the entire burden – and high cost – of monitoring YouTube’s infringement onto the victims of that infringement."
    
13. Even if a company issues a takedown notice, the video reappears with only a small part changed. YouTube doesn't block repeat offenders from doing this, and doesn't prevent users who have been kicked off from signing up again.
    
14. There is an inevitable time lag between when a video appears on the site and when a content owner sends a takedown notice.
    
15. YouTube is also deliberately interfering with copyright owners' ability to find copyrighted works. YouTube limits searches to returning only 1,000 results, thus limiting an owner from seeing all the infringing works. Even if the owner issues a takedown notice for 1,000 works, another 1,000 will appear.
    
16. YouTube also allows "friends" on the site to share videos privately, and which can't be seen by copyright holders.
    
17. Despite all this, YouTube offers protections to companies that sign license agreements. "By limiting copyright protection to business partners who have agreed to grant it licenses, YouTube attempts to coerce copyright owners to grant it a license in order to receive the protection to which they are entitled under the copyright laws."
    
18. Even if Google eventually provides copyright protection, that won't compensate content owners from the damage already incurred.

More on MotionDSP's technology

Details on Ikena Copyright

Ikena Copyright is a pure video technology; it does not rely on audio fingerprinting in any fashion.
Ikena Copyright's video signature system stands up to many 'attacks' such as:

• Editing: it can identify clips as small as 20 seconds
• Low-bitrate compression: it can identify clips that have been re-encoded (i.e.: from their native format to Adobe® Flash® internet video)
• Aspect ratio change: 16:9 content compressed into a 4:3 display, or 4:3 stretched to 16:9
  Cropping: cropping the sides of a video
• Video quality change: Ikena Copyright can identify videos which have been converted to B+W, or had their color distorted

Filter Startup: YouTube Audition?

Company that can fingerprint video wants to solve YouTube’s copyright woes.
March 14, 2007
By Alexandra Berzon, RedHerring

A video-filtering startup would like to play a starring role on YouTube.

San Mateo, California-based MotionDSP on Tuesday unveiled Ikena, a tool that can track content on user-generated video sites by detecting a unique set of motions in each clip. Company CEO Sean Varah said that could addresses a key claim in the $1 billion suit Viacom brought against Google this week–that YouTube should be using filtering tools to permanently block copyrighted videos from appearing on the site.

YouTube has delayed plans to implement comprehensive tools to filter copyrighted content, claiming that developing such a system is complicated and time-consuming, with many factors to consider. Viacom argues that YouTube has deliberately stalled.

That’s left room for startups to develop their own filtering software. So far the early leader is Audible Magic, which can identify content based on “digital fingerprints” in a video’s accompanying audio soundtrack. The Los Gatos, California-based startup has a licensing deal with MySpace to filter out content owned by Universal Music Group, NBC and Fox.

But MotionDSP may be ahead in developing tools that track motion in the video itself, as opposed to audio or text attached to the video.

The software is based on the company’s video enhancement technology that uses motion sensors to clean up blurry or grainy videos. With content provided by media companies, Ikena creates a “signature” or “hash” based on motion in the video. The signature gets stored in a database and matched against any similar video a user tries to put up on the site.

MySpace provided the inspiration for the product, Mr. Varah said, when an executive asked him a few months ago if the company could use its video enhancement tools to identify and filter content. But Mr. Varah said he hasn’t heard from MySpace in a while. The company, angel-backed so far, is in the process of raising venture funds. Mr. Varah said he expects to close a round of funding in the next six weeks.

Gartner analyst Allen Weiner saw a demo of the product. He was impressed to see that it could identify and block videos when users alter the images or length and then try to repost them—a common way that users try to get around detection tools.

But Mr. Weiner pointed out that MotionDSP still hasn’t demonstrated that Ikena is ready to be used by large scale video sites.
“Clearly there’s a little bit of getting from here to there,” said Mr. Weiner. “From what we’ve seen of the technology, it provides a solution to the issue at hand of copyrighted content.”

Viacom sues Google over YouTube clips

By Anne Broache
http://www.news.com/
Story last modified Tue Mar 13

Viacom on Tuesday slapped Google and YouTube with a lawsuit accusing the wildly popular video-sharing Web site of "massive intentional copyright infringement" and seeking more than $1 billion in damages.

The complaint filed in the U.S. District Court for the Southern District of New York contends that nearly 160,000 unauthorized clips of Viacom's entertainment programming have been available on YouTube and that these clips had been viewed more than 1.5 billion times.

Viacom said it has asked the court for an injunction ordering a halt to the alleged copyright infringement in addition to the billion-dollar payout.

In a statement, Viacom blasted what it deemed YouTube's "clearly illegal" business model, riding on advertising sales and traffic tied to "unlicensed content." The media giant accused YouTube of building "a lucrative business out of exploiting the devotion of fans to others' creative works in order to enrich itself and its corporate parent Google."

"In fact, YouTube's strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden--and high cost--of monitoring YouTube onto the victims of its infringement," Viacom said in a statement.

The suit is the culmination of what the New York-based company called "unproductive" negotiations with the Web giants. In early February, Viacom asked YouTube and parent Google to remove all offending clips and said the companies had agreed to pull down more than 100,000 videos produced by Viacom properties, including MTV Networks, Comedy Central, BET and VH-1.

Update: Official Viacom stance

“YouTube is a significant, for-profit organization that has built a lucrative business out of exploiting the devotion of fans to others’ creative works in order to enrich itself and its corporate parent Google. Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal and is in obvious conflict with copyright laws. In fact, YouTube’s strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden – and high cost – of monitoring YouTube onto the victims of its infringement.

This behavior stands in stark contrast to the actions of other significant distributors, who have recognized the fair value of entertainment content and have concluded agreements to make content legally available to their customers around the world.

There is no question that YouTube and Google are continuing to take the fruit of our efforts without permission and destroying enormous value in the process. This is value that rightfully belongs to the writers, directors and talent who create it and companies like Viacom that have invested to make possible this innovation and creativity.

After a great deal of unproductive negotiation, and remedial efforts by ourselves and other copyright holders, YouTube continues in its unlawful business model. Therefore, we must turn to the courts to prevent Google and YouTube from continuing to steal value from artists and to obtain compensation for the significant damage they have caused.”

SNAPSHOT: MotionDSP (new kid on the block!)

One more contender. Interesting to notice: they move from software or bundled hardware products to service.
**********


Startup MotionDSP is set to announce a copyright-detection software package that uses video-fingerprinting technology.
The product will be called Ikena Copyright, and it will be offered as a service.

MotionDSP’s video-fingerprinting technology, which does not rely on audio clips or embedded text tags, is derived from the company’s video-enhancement technology, which can track and match thousands of videos per day.
It is a video technology company. As such, they are not in the copyright detection business per-se.

Quote
"We’re going to offer our technology (both video enhancement and copyright detection) as a service. We’re moving away from selling software and appliances."
Sean Varah
CEO, MotionDSP

SNAPSHOT: Vidyatel

Company profile

Vidyatel is a privately-owned Israeli corporation. Originally founded in 2002 to develop and market a real-time distribution/content-management server over IP broadband networks in the area of IPTV.
Vidyatel developed a video-based content monitoring system: Motion Picture Fingerprint – MPF solution. Vidyatel's system identifies any identical components in distinct videos over the Internet, streaming video or television broadcast.
The main investor in Vidyatel is BATM/Telco system (BVC.L).

Management

Asher Hershtik
A video-broadcasting and post-production expert. Previously: Founder & CEO of ContentWise. CEO of Terra Computers, a subsidiary of El-Op. Team Leader in El-Op in the defense and aerospace industries. Developer of encryption technologies for Israel Defense Forces.

Ofer Harpak
A successful entrepreneur since the late eighties. He served from 1999 to 2003 as CTO of BATM/Telco systems – Metro Ethernet Systems Provider and is also a Co-founder of WiNetworks, engaged in WiMAX /Wireless systems offering triple play solutions for TV Broadcasters.

COMPETITION: financial info

Snapshot of the main competitors for video fingerprinting:

• Advestigo (raised 4.5M€)
• AudibleMagic (estimated annual revenues: $2.5-3M)
• Guba (never been funded, grew organically and... are now for sale)
• Vidyatel (raised $3-5M end of 2002)
• Vobile (seeking for $5M as we speak)
• iPharro (raised $5M last month)

Other competitors:
Philips
NTT labs

GoFish Partners with Audible Magic

After MySpace, YouTube, DailyMotion, Audible Magic scores Bolt.
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GoFish To Utilize Audible Magic’s Content Management and Digital Filtering Technology
SAN FRANCISCO & LOS GATOS, Calif.--(BUSINESS WIRE)

GoFish Corporation (OTCBB:GOFH), the leading publicly-traded made-for-Internet video company where millions of people come to watch, upload and share videos, today announced that Audible Magic, the industry leader in content rights management, will provide filtering and identification technology for its popular website.

This agreement will allow licensed copyrighted material on GoFish to be identified by Audible Magic’s monitoring services, which provide reporting information used for revenue sharing between GoFish and its strategic partners. In addition, the Audible Magic fingerprinting software, which is based upon its CopySense technology, will enable GoFish to streamline content management in its database of hundreds of thousands of songs used in videos across the GoFish Network.

Bolt: community of nearly six million monthly unique visitors.

Rights success for Universal as Bolt settles

By Joshua Chaffin in New York
Financial Times
Published: March 9 2007

Universal Music on Thursday reached a settlement with Bolt.com, an online video site, that it believes will strengthen its hand in rights negotiations with other internet sites that feature its artists’ music and videos. Under the terms of the deal, Universal agreed to drop a lawsuit against Bolt that it filed in October.

In return, the music company will take a multimillion-dollar share of the proceeds of Bolt’s recent sale to another site, GoFish, as damages for past copyright infringement, according to people familiar with the settlement.

Universal will also receivea small licensing fee each time one of its songs is played on GoFish in the future, as well as a share of associated advertising revenue.

GoFish will implement filtering technology on Bolt (Audible Magic, see the following post) within 60 days, which will allow Universal to easily determine when its materials have been posted on the site.

While the deal is relatively small in size – the payment for past infringements is believed to be worth less than $10m – Universal executives believe that it will build on a precedent they set in an agreement late last year with YouTube, the internet’s most popular video site.

Under threat of lawsuit, YouTube, which Google later acquired for $1.65bn, ultimately agreed to give Universal tens of millions of dollars of company stock and also share advertising revenue and pay licensing fees.

At the moment, Universal is still locked in legal battles with two other websites that feature online video and user-generated content – Sony’s Grouper and News Corp’s MySpace.

Imeem to provide ad-revenue share for music streaming

San Francisco start-up Imeem, a Web site focused on letting users share music and other media playlists, has come out of nowhere.

It now boasts 16 million unique users a month, and grabbing enough attention that it needs to start protecting content owners. It will announce tomorrow a partnership with Snocap, another San Francisco company, to identify the music streamed at Imeem, so that Imeem can pay a share of ad revenue to music content owners.

Snocap’s technology gives each music track a unique signature, and can identify the music when it is uploaded by Imeem users. It then gives content owners a platform to dictate the terms of their music’s use — including the right to negotiate the ad revenue share they get when a track is streamed over Imeem.

The companies said the ad-sharing model is a first of its kind. It is significant because competing sites like Google’s YouTube are struggling to come to terms with content owners.

Snocap says its registry has three million tracks.

Much of the music on Imeem comes from independent artists. But it says it has partnered with Virgin Records, Nettwerk Records, SubPop Records, Beggars Group, Domino Records and Warner Independent Pictures.

Snocap’s already powers MySpace’s music store, however Snocap chief executive Rusty Rueff says the Imeem partnership takes things a step further. The Imeem deal lets any content owner offer their music (not just signed artists, as on MySpace). The other difference is the ad-revenue share, letting users listen to the music for free.
The two companies have a common investor in Morgenthaler Ventures.

YouTube banned in Turkey after video insults

This is the site that appears when residents of Turkey attempt to go to YouTube, the popular video sharing site owned by Google. The text, translated to English, reads “Access to www.youtube.com site has been suspended in accordance with decision no: 2007/384 dated 06.03.2007 of Istanbul First Criminal Peace Court.”

The reason for the ban: a video, which has now been taken down, showing Greeks criticizing Turkey and insulting Turkey’s national flag and founding father, Mustafa Kemal Ataturk.

All public internet access in Turkey is provided by Turk Telecom via adsl, so the takedown is relatively simple.

Humor - Internal YouTube Document Leaked!

YouTube 2006 sales pegged at $15 million

SAN FRANCISCO -- YouTube Inc. generated approximately $15 million in revenue for all of 2006, according to Bear Stearns analyst Robert Peck. Peck's conclusion is based on a review of a recent regulatory filing by Google Inc (GOOG), which purchased YouTube for $1.65 billion in October. The deal closed in November.

SNAPSHOT: iPharro (update)

Rights management based upon video fingerprinting

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• German startup
• Commercializes five years of academic research on video recognition.
• 10 employees.
• The company’s video detection technology is based on isolating similar objects and colors to mimic human seeing.
• Main customers: Nielsen Media Research, the government of Singapore’s content rating division, TV stations in Cyprus
• UGC leads: Break.com

Quote
iPharro CEO David Fisher, whose background is in TV industry rights management, said “Google and them will realize just catching the video is the first step; OK now what, who owns the rights?”
He contended iPharro has a more comprehensive solution, with established systems for dealing with the nuances of what payments should be distributed to whom.

SNAPSHOT: Vobile

Mike's update, March 08

• Digital media company with operations in China and U.S.A.
• Vobile has 15-20 engineers in China who have been very responsive to requests from MPAA/MovieLabs so far.
• Their US team consists of the founders, Yangbin and Jian, and a few other part time consultants.
• Founded April, 2005.
• Currently in stealth mode with an expected public launch in 2007.
• Currently seeking for $5 M in first round.
• Key strategic relationships: AT&T, MPAA, MovieLabs, and Google.
• Technology: VideoDNA.
• Demo of their VideoDNA product is pretty impressive, especially on mashups, said Mike.
• Seems to be mostly just technology and do not have a business model/plan nor have they directly contacted content owners.

Quote:
"Vobile's VideoDNA is a big hit with MPAA.
Yangbin Wang, CEO of VOBILE, delivered the test platform for VideoDNA to the MPAA in LA last week.
This included a server and a client with the new VideoDNA software installed on them.
The people at MPAA said they were excided to be able to test VideoDNA as it looks like the most powerful of the systems they have received for testing.
This will enable the MPAA (Motion Picture Aliance Association) to run VideoDNA though its paces to prove how effective it can be in stopping the copying of copyrighted movies and videos on the internet.
The MPAA will be testing VideoDNA for about 6 weeks and will issuse a press release as to their findings."
Chuck Colby.

Management Team

Vernon Altman, Chairman.
Vernon was one of the first members of Bain Consulting and is very well connected (the AT&T relationship is through Vernon).

Yangbin Wang - Founder and Chief Executive Officer
Prior to founding Vobile, Yangbin was the CTO of Onewave Technologies following the acquisition of the IPTV business of YZTECH by Onewave in 2004.

Jian Lu, Ph. D. - Founder and Chief Technology Officer
Prior to founding Vobile, Jian was a principal engineer and scientist at Apple Computer. He joined Apple in 1996, and led video codec development for Apple's video applications including QuickTime, Final Cut Pro, DVD Studio Pro, iDVD and iMovie. He also served as principal representative for Apple in the development of JPEG-2000 and MPEG-4 image and video coding standards. He is the inventor of 7 U.S. patents in video processing, compression and delivery.

Satya Narayan, CPA - VP of Finance and Operations
Satya has over 12 years of experience in public accounting and corporate finance. Before joining Vobile, Satya was CFO at Silicon Valley startup companies Garuda Networks and CM Innovations.

Harn Soper, Interim VP Business Development

Strategic Advisors

Wen H. Chen, Ph. D. - Chief Technology Advisor
Dr. Chen is a Cisco Fellow, IEEE Fellow, Honorary Professor at the Beijing Broadcasting Institute, Tianjin University and Nanjing University of Post and Telecommunications, and Distinguished Lecture Chair at National Chung Hsing University.

Chuck Colby - Strategic Advisor, Systems
Chuck is the president of Colby Systems Corporation, which he founded in 1982. Chuck was awarded the top 10-of-the-show for the NAB Show for the first MPEG-1 Digital Video Recorder in 1994 and won again in 1996 for the development of the first MPEG-2 Digital Video Recorder.

David Liu - Strategic Advisor, Business
David Liu is a Managing Director of the Jefferies Broadview technology investment banking group. He works in the firm's Silicon Valley office and is a member of the Software, Services & Media global practice group

Lawrence Meli - Strategic Advisor, Content
Larry is President of AmericanLife TV Network. Previously, he was Senior Vice President of Programming Operations at National Geographic Channel.

Microsoft's outreach memo

Company's letter offers anti-piracy aid
By BEN FRITZ, Variety

Looking to strengthen ties with Hollywood as it delves deeper into online video, Microsoft on Tuesday sent a memo to top execs at all the major media congloms offering to work closely with them to combat piracy, but not to implement the kind of filtering technology Viacom is demanding on YouTube.

Confidential memo obtained by Daily Variety was sent by Microsoft to media toppers such as News Corp.’s Peter Chernin, NBCU’s Jeff Zucker and Disney’s Bob Iger as well as heads of the major labels. It outlines the tech giant's approach to Soapbox, its newly launched viral video service on MSN that is going up against YouTube, MySpace Video and others.

In the letter, media and entertainment VP Blair Westlake said Microsoft is developing "what we believe content owners want and need: industry-leading notice and takedown ... practices, including tools that enable our content partners to more easily find content that is rightfully theirs and give us prompt notice so we can respond even more efficiently and expeditiously."

There's no mention of filtering technology that prevents users from uploading copyrighted content.
.../...
Sources at Microsoft said the company doesn't yet consider any filtering technologies on the market to be effective enough for itself and users. "Filtering is a complex issue and not a magic bullet," one person at the company said. "We believe this approach actually provides content owners more control than if Microsoft attempted to monitor content itself."

Many critics have complained filtering technology isn't precise and sometimes screens out content that is similar to other copyrighted material or is legally used, such as short clips for parody.

However, takedown requests by big media companies aren't perfect either. When Viacom told YouTube to pull more than 100,000 clips featuring its content, some users complained their personal videos were inaccurately named by the conglom and removed in the process.

Soapbox, which is still in a public beta trial run and has a miniscule amount of content and visitors compared with YouTube, already has numerous copyrighted clips from "South Park," "High School Musical," "American Idol" and other TV shows, films and musicvideos.

Staying on Hollywood's good side is a priority for Microsoft, which distributes studio movies and TV shows on its Xbox Live service and licenses its Windows Media DRM to virtually every music and video download store except iTunes.

Though most congloms have indicated they would prefer to see their copyrighted content filtered out, a person at one major studio indicated they're pleased to see Microsoft proactively reaching out, noting it's a preferable approach compared with many other online video operators.

SNAPSHOT: Auditude

Even if they mention Video, they surely do the matching of video based upon the soundtrack analysis.
See an excerpt of their website below.
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User-generated Video Services

Auditude has a breakthrough solution for the protection of copyrights in the emerging user-generated video space. Our technology allows pro-active enforcement on the part of content owners, while maintaining DMCA 512 provisions for service providers. Leveraging advanced digital fingerprinting technology and the largest content database in existence, Auditude provides a turn-key solution for service providers looking to protect the rights associated with user generated or third party content. At the same time, Auditude's solution prevents the presence of duplicates in the content library and facilitates proper identication and tagging.
The Auditude software system helps service providers to keep current with content that has been flagged as restricted. Content owners can either add content, or use content from Auditude's over 100,000,000 minutes of pre-fingerprinted content. Service providers can then match user-video or audio against this database and be aware, almost instantly, of copyright violations. Auditude can also fingerprint a service provider's own content and filter against this database. The unprecedented speed and scalability of the Auditude system makes deploying it the only practical solution for large-scale providers.

Our service provides:

• Copyright Enforcement - Automate the process of filtering new and existing user-genrated video and music content for copyright infractions


• Largest Database of Copyrighted Content - Video and music content with rich meta-data has already been fingerprinted and is available for matching


• Keeps the Database Updated - Tools are available to allow copyright owners to make instant additions to this catalog


• Content Blacklist - Once content has been flagged as bad, future uploads can be matched against a blocked content list and prevented automatically


• De-duplication - Creating a database of previously uploaded content can prevent duplicate uploads


• Adult Content Filtering - Adult content can also be detected and filtered


• Content-owner Friendly - Auditude's process enables fast flagging and easy notification by copyright holders of what content they would like removed


• Fast, Scalable, Accurate - Auditude can search the largest databases, faster, and more accurately than anyone, you have to see it to believe it.

RIAA launches piracy payment website

Designed to tackle illegal P2P activity by university students

The Recording Industry Association of America (RIAA) has launched a website to collect payments from those accused of music piracy.

P2Plawsuits.com is designed to cut back on the number of lawsuits filed by the RIAA, which it says will reduce the legal cost to those found guilty of downloading music illegally.
The RIAA has already sent 400 pre-litigation settlement letters to 13 universities and has asked them to forward those letters to the appropriate network users.

"Under this new approach, a student, or other network user, can settle the record company claims against him or her at a discounted rate before a lawsuit is ever filed," the RIAA said.
Mitch Bainwol, chief executive of the RIAA, claimed that the theft of music remains unacceptably high and undermines the industry's ability to invest in new music.

"This is especially the case on college campuses, despite innovative business models like the Ruckus offer of free legal music to any college student," he said.

"Our work with college administrators has yielded real progress, and we are grateful for the help of those who have worked closely with us.

"At the same time, we recognise that the nature of online music theft is changing, and we need to adjust our strategies accordingly."

The RIAA stated that it will now target Ares and Gnutella-based peer-to-peer networks such as LimeWire, which are gaining in popularity.

ASCAP Lawsuit Seeks To Classify Music Downloads As ‘Public Performance’

A federal court in New York will decide the question of whether downloading a song constitutes a “public performance” of a composition in response to a lawsuit brought by music publisher ASCAP against AOL, RealNetworks, Yahoo and others. The performing rights organization filed a cross-motion in the United States District Court for the Southern District of New York and was met by friend of the court briefs by a flurry of concerned parties, according to BillboardBiz, which listed the RIAA, BMI, the National Music Publishers’ Association, the Digital Media Association, the Cellular Telecommunication and Internet Association.

Until now, most digital services like Apple, AOL and others have only paid royalties for “reproducing” the recorded compositions that were downloaded. Most digital services have paid public performance royalties to ASCAP, BMI or SESAC only for streaming, all of which has been governed by a non-binding agreement was made some years ago since copyright law was unclear on the subject and digital services were at a nascent stage.

Now, ASCAP and others want clarification of copyright law, especially since television broadcasts, which often include music, are increasingly being offered as downloads. The performing rights organization claims that there should be a performance royalty. DiMA, whose brief was supported by NARM, the Entertainment Merchants Association, the Consumers’ Electronics Association, is fighting ASCAP’s suit. Jonathan Potter, DiMA’s executive director, said in a statement: “For a decade ASCAP and BMI have successfully preyed on less-confident or underfinanced companies that were willing to pay double-dip royalties. Now, however, we are confident that a judge will finally end this travesty.”

BitTorrent: Fast, but DRM a Downer

Playing with BitTorrent’s new content portal this week was interesting. The site looks great, it’s easy to navigate, and while the library of available content is certainly large, it’s not exhaustive. The downloading experience is first rate, even if there isn’t a large swarm of peers — their pipes can definitely seed torrents at high speed, as contributor Janko Roettgers found in his review for the P2P Blog. Users aren’t even locked into a particular client, as I used my favorite, Azureus, with no problems.

The price point on the content isn’t too egregious — short form content like television shows sell for the same $1.99 you can find them for at the iTunes store. Movie rentals are $3.99, and some movies can also be purchased for $9.99. The rentals are maybe a dollar more than I’m used to paying at the local video store, and the flat rate for movies seems a tad unrealistic for some of the older titles. As a cynic, I’d have to agree with Rafe Needleman that those oldies appear to be available for the sake of boosting the overall number of offerings.

So what are the downsides? There are a number of them, and they almost all have to do with the digital rights management.

First of all, because the store uses Windows Media DRM, you can’t play back content on a Macintosh — even with the Flip4Mac plugin for QuickTime. It also means that you can’t play it on any number of media players for Windows, such as my personal favorite, VLC. You are stuck with using Media Player.

Secondly, because the authentication has to make a call back to the server to verify your rights, you won’t be able to start playback of downloaded content if you’re online. For instance, you might download a movie while waiting at the airport for some entertainment during the flight. But if you don’t make sure to confirm your license before you get on the plane, you’ll have to wait until you land and can get back online.

Thirdly, the actual authentication process is, to put it bluntly, a pain in the ass. Maybe I’m just naive and inexperienced with buying content for Media Player, but the first movie I rented required a full 10 minutes of waiting for the player to contact the server, entering my BitTorrent account login information, and then clicking through menu after menu. Though once the movie did finally start, the quality is very good.

If I was a regular user of the service, at some point I imagine I would want to do something with my content that’s strictly verboten — like burning a purchased movie to a DVD to clear space on my hard drive, or loading the movie onto a video iPod to watch during an evening commute for instance. In that case, I would start looking for ways to strip the DRM — which, after about a little over an hour of searching Google, downloading an application and following some instructions from copyfighter forums, is easy enough to do. So easy that I felt obligated to contact BitTorrent and let them know about it.

Honestly, I feel for BitTorrent. They deserve to turn their expertise into a viable business. But as long as the studios and labels demand DRM, and Microsoft keeps promising them that it will work, BitTorrent will never be able to compete with unauthorized downloads. I will remain a staunch proponent of the BitTorrent protocol as an efficient means for distributing large amounts of data — but as Napster proved years earlier, no good media distribution technology goes unpunished by content providers.

Video Killed the Distributor

Music videos started out as ads for albums in the early '80s, and stayed that way throughout the initial stages of the online music revolution.

But about two years ago, the major labels -- led by UMG -- realized they were missing out on a cash cow that, along with ringtones, could help them weather continued declines in music sales. Ever since, a battle has been brewing between the labels and their online distributors, who claim they're being run out of business by the high costs of licensing music videos. On Tuesday, at the Digital Music Forum keynote panel in New York, the fight was, at least, entertaining.

In front of a crowd of 400-plus industry execs, label reps and digital music professionals, Polar Levine, a musician and blogger, snagged the audience mike during the Q&A session and baited execs with, well, the expected: "Behind all of this bullshit," he said, "is the actual music."
But then, things got interesting: Levine got a one-armed hug from moderator Ted Cohen, the former top dog of BMI's digital music group and current managing director of digital media consultancy TAG Strategic. A breakthrough in relations?

Not really. Levine, while pointing at Thomas Gewecke, senior vice president of Sony/BMG's Digital Business Group, said: "The major labels have run so counter to everything human except for making money that you (the major labels) are the California (of the music business) that's going to drop into the sea."

He went on to predict that music will split into a "two-tiered system, where (the major labels) can do Britney and her hair (or her 'not hair'), and everyone else can do the music." Gewecke, of course, countered, denying that the majors have been gouging their online distributors, and claimed that there is "no benefit to us in having our distributors go out of business."

The scene with Levine nearly stole the show, but it didn't reveal anything particularly new. Many -- from industry analysts to a few outspoken big label music execs -- have speculated that the major labels are charging online distributors an unfair price to license their music and music videos. As a result, licensees often face financial hardship, and some eventually go under -- after fulfilling their financial obligations to the labels, of course.

Cohen, at least, broached the subject by mentioning that SpiralFrog -- a widely hyped, ad-supported online music distributor, which had announced licensing deals from the majors -- is now either dead or in hibernation.

Subscription services haven't had an easy time of it, either, despite the fact that they pay labels less per song than download services like iTunes. Gabriel Levy, a general manager of label relations for RealNetworks, said that Real's Rhapsody service has been limited by the labels' inflexibility on licensing fees. Greg Scholl, CEO of distribution company Orchard, found the fees unfair, claiming, "The labels shouldn't be saying, 'I just spent a million-and-a-half dollars developing this act -- help me make that back.'"

He's not kidding. According to David Del Beccaro, CEO of Music Choice, it would now cost "between $200 (million) and $500 million" to license all of the major-label video content to supply a site with on-demand music footage. "There isn't a single player in music videos online today that can get a CPM to offset the variable cost of providing the video," he said.

But the difficulty in making money hasn't stopped budding online businesses from going to the labels for content. In the end, they need the traffic and community gained by posting the videos. According to Downing, "Major-label artists create an SEO [Search Engine Optimization] effect: People search for Kravitz or the Stones, and because we're hosting that content, we get a secondary benefit" -- the resulting traffic.

So the strong demand for the major labels' music and videos continues. Sony/BMG alone has between "100 and 150 (licensing) deals (with online distributors) at any given time," according to Gewecke, who also mentioned that the company hired more staff in order to keep up with an increased demand for licensing.

But having all that bargaining power concentrated in the hands of just four companies makes for tricky negotiation from the perspective of an online distributor, and could ultimately mean fewer, less innovative options for consumers. Who knows? If the fight continues, Levine might just get his two-tiered system. The surprise, however, could be that the majors, with their restrictive licensing attitudes, could find themselves at the bottom tier of that system.