Content Creators

SPOTLIGHT: Blip.tv gets third round funding

Pete Wylie — Tue, 21 Oct 2008 11:10:31 -0400

Online video platform Blip.tv has secured a third round of funding. The New York City-based company is unique in the space because of its 50/50 ad revenue share with content creators. The amount of funding, provided by Bain Capital Partners, was not announced. Blip's previous funding round was provided by Ambient Sound Investments.

Blip aims to use the money to fund network buildout, technology investment and new sponsorships, according to paidcontent.com.

For more:
- see the paidcontent.com blog post here

Fair Use Victory for User-Gen Content

Pete Wylie — Fri, 22 Aug 2008 09:33:16 -0400

In a huge victory for user-generated content providers and fair use advocates, a U.S. district judge has ruled that copyright holders must consider whether uses of their material are fair before sending takedown notices to sites that post the content. Judge Jeremy Fogel delivered the ruling for the U.S. District Court of the Northern District of California.

Pennsylvania resident Stephanie Lenz posted a video of her toddler dancing on YouTube so friends and family could view it. YouTube received a take-down notice from Universal a few days later that claimed infringement, because a song for which they hold the copyright, Prince's "Let's Go Crazy," plays in the background of the video and Lenz did not have permission to use it.

Lenz sued Universal for the right to use the song, because it constituted fair use of the copyrighted material. Fair use was first codified in the Copyright Act of 1970, and later, applied to digital media in the Digital Millennium Copyright Act.

For an otherwise infringing use of copyrighted material to be considered a fair use, the court considers four factors: whether the purpose of the use was commercial, the nature of the original work, what amount of the original work was used, and whether the new use devalues the original in the marketplace.

In ruling that Lenz's use was fair, Fogel shifted the burden in this contentious issue back to copyright holders, especially large corporate copyright holders. Companies like Universal had become accustomed to getting complete compliance from YouTube and other video hosting sites when they sent take-down notices. Content creators were afraid to post mash-ups and other work on sites like YouTube, for fear that it would be taken down and that they might even get in legal trouble.

Now you can expect such blanket take-down notices to ebb, as Universal and others must now establish that a use is not fair before demanding take-down.

It's not that advertisers are likely to rush to buy in front of user-generated content now that one sticky legal issue is resolved, but the ruling is one step toward legitimizing this avenue to reach millions of consumers.

- Pete

Cuban: Bow to Google, Little Guys

Doug Mohney — Mon, 02 Jun 2008 18:32:40 -0400

Chronic blogger and Dallas Mavericks owner Mark Cuban, trying to keep his mind away from professional basketball until next season, takes a deep dive into the future of online video content -- and it ain't pretty for the little guys.

After patting himself on the back for founding HDNet, Cuban says that the biggest problem for independent creators of online video is that their financial future is basically controlled by Google through YouTube! Distribution of clips through YouTube hides the fundamental costs of delivering video through the Internet in a unicast/on-demand model. The more people who watch online video, the more expensive it is to scale larger; the exact opposite of broadcast, where the first user is very expensive, but more users brings down the cost per user (An economics lesson this reporter learned during his days at SkyCache/Cidera).

Mark predicts doom when Google and MySpace and the other players stop subsidizing the hidden cost of video distribution and notes comments out of The Google that the company hasn't figure out how to monetize (i.e. make money) from independent video.

Independent video producers may end up being forced to license their video to portal sites such as YouTube in exchange for free video distribution. Since "99pct" of content producers don't understand how the economics of online video distribution works, it ends up to be a losing game for most budding Internet video moguls. Portal/aggregators gets the SEO benefits of having all that available content at their master site, but content creators aren't going to enough of a return on their work to make it worth while to keep going.

Cuban says there's also some serious technology whooping coming into the pipeline for the glory of (what else?) HDTV and digital cable that won't be nice to online video.

For more:
- Cuban's bitter prophesy for the little guys of online video.

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