Ethics and Law in New Media/Marketing Advantages and Copyright Issues in Distribution of Music in YouTube

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In February 2005 YouTube was launched as a beta version by three employees of PayPal, mostly for amateur videos. First YouTube video was posted by one of it’s creators, Yakov Lapitsky and it was shot at the San Diego Zoo. The distribution of original content was the next step following the success of the platform. In only a couple of months a Nike ad in which Ronaldinho was receiving his pair of Golden Boots hit first one million views on YouTube. Since then the success recipe that YouTube used is offering services both for companies and individual users. In 2007, YouTube launched its Partner Program, adding advertising to most successful videos allowing users to six-figure incomes[1] from the Web site. Especially since Google acquired YouTube[2] the problem of copyright became more important than ever, since the Google wants profit. Anonymous user that are uploading videos with no copyrights aren't helping at all advertising. But YouTube started encouraging a creative ecosystem, convincing companies that it’s better for them to profit from the user generated content then to claim the copyrights and to remove it. And since this happened more and more brands chose to associate their names with stories of individuals that have huge audiences. So the model has shifted, but in the same time also the quality of UGC improved.


Primary channel of Music consumption[edit]

According to the IFPI Digital music report 2014[3] YouTube is the biggest single access point to music for consumers internationally, with one billion users worldwide. Following the fact, it can be stated that Youtube can provide the nowadays mainstream music a various set of comparable key performance indicators, such as total count, amount of subscribers, and sentiment. Also, overall the direction of digital music distribution is following the trend stated above, as the industry now derives 27 per cent of its digital revenues from subscription and ad-supported streaming services, up from 14 per cent in 2011.[4]

New age of synchronization of brands[edit]

According to the Guardian [5], YouTube is the new TV for the young audiences, as the share of media consumers compared to the traditional tv (18-24 years old) is double the amount. For music business the synchronizing business, either by providing music into advertisement use or using product placement in the content produced has traditionally had a remarkable role [6]. In addition to the game industry as a driving force of the genre, the YouTube channels’ social capital can be turned into a content marketing channel with a well-defined niche. A new generation of media actors, YouTube marketing agencies is currently growing fast, and though the current primary customers of theirs are the video loggers and individual artists, there is a huge value in the social capital the major labels channels as hubs of content have.

Cross-entertainment sector synergy [edit]

One recent wave is to implement cross-entertainment sector collaboration in the marketing, also in the phase of initial content production. One successful example of this is Hunter Hayes: The YouTube orchestra. Warner Music Nashville/Atlantic Records in their need of launching a fresh country artist to young audiences came up with a idea for a mash-up: masking user generated content by contacting YouTube Superstars and creating a matching entity, where the original video is a hub of the user generated content videos, cross-directing traffic to both the superstars channels, and the channel of the record company where the new artists was launched. [7]



One of the biggest challenges in the digitalization of music distribution is piracy, and from the last 20 years the great public remembers well at least the following law suits of copyright infringements in file sharing.[8]: A&M Records vs. Napster (2001) and MGM Studios, Inc. vs. Kazaa Ltd. (2005). Though the publicity gained from the warfare in court is said to be the most effective tool of marketing, they also are resource-intensive and financially highly risky processes for the record labels.

YouTube vs. YouTube2mp3 - services[edit]

In YouTube environment the biggest copyright threat are the 3rd party websites enabling people to download the music as mp3-versions and store the music on their computers, edit it and re-post it in their own name. Due to the functional logic of the website, YouTube has taken the threat into consideration and is blocking technically the servers providing the services, as the functionality requires a contact to the API of YouTube. Though according to Google API’s terms of use “separating, isolating, or modifying audio or video components of any content is prohibited and could result in legal consequence”, Google has brought the fight further from the threat of lawsuit. As an example, in 2012 Google cracked down, stating that it’s 200 million users are not only going to be ignored but also criminalized [9].

Major record labels: copyright world police?[edit]

The next steps for fight against piracy have been developing the content id system (to be discover further later), and direct collaboration with the major record labels. In June Public Knowledge - web magazine wrote about Universal Music Groups and YouTube’s agreement that UMG could take down videos that did not infringe on UMG copyrights [10].

Fair Use[edit]

To elaborate more on the agreement, understanding the term “fair use” is required. According to Collins[11], the fair use in the US copyright law codified in section 107, Copyright Act 1976 can be identified in four factors: The first factor is to enquire into the nature and purpose of the offending work. If the work is for purposes such as commentary, criticism, education or news reporting, then the favor swings toward fair use. The second factor examines the nature of the copyrighted work and requires courts to consider whether it is published or unpublished, factual or fictional. A fictional work is generally afforded a stronger copyright protection that one which is factual because of the creative investment. The third factor investigates how much of the original work was copied. This factor is addressed both quantitatively and qualitatively. The law will only tolerate copying to the point that is reasonable, but the substantiality differs between cases, and the fourth and final factor looks at the effect of the use upon the potential market for or value of the copyrighted work.

In other words the agreement between YouTube and UMG enables UMG to make decisions of cencorism in the YouTube realm regardless the power of court.

Future prospects: YouTube Music Key[edit]

YouTube, until now an exclusively advertising-supported service, is planning what many see as a highly significant move into paid-for subscription. Plans for a premium service, which will offer a higher value experience to YouTube’s users, were announced in mid-2013 with launch expected in 2014. [12] According to [13], the plan has been postponed and the closed six months beta has started November 17 2014. Taking a look at the existing market one might say that YouTube is terribly late. However, their strength is in the interlinked, variable content; not only they have the official music videos, but also myriad covers, parodies, remixes and original songs recorded by lesser known musicians. This enables them to provide a wide universe of variable content.

In the light of the current state of music business, the quality streaming services being really able to popularize the premium accounts are highly needed, as the concept of free streaming is according to Nielsen SoundScan already decreasing the digital music sales (the turn point was year 2013) [14]. In other words, the upcoming YouTube Music Key - service may be the saviour of the music business, if its name fulfills the expectations.


YouTube services for Independent Artists or how to earn money from copyrights[edit]

In this context, artist in the beginning of their careers, creators of original content, have also higher standards to follow. It’s not enough anymore to take a guitar and play original content. This is how a middle category of artist, the ones who already had some success on internet and also less than 0 budget for promotion. Independent artists or indie have the feeling that are one step away from waking up in one morning with millions of views. Apparently YouTube likes this niche and adapted to the new trends, by offering a range of tools that could be used for a do it yourself marketing campaign. So the initial YouTube logo “Broadcast yourself” started also incorporating DIY.

Partner Program[edit]

YouTube Partner was released in 2007 and it was one of the first tools that would allow creators monetize their original content. Signing up[15] for this service it’s quite easy and since YouTube takes care of ad placing, it seems to be an easy way to make money. On the other hand, the Partner Program will becomes more specialized since UGC is also following this trend.

Music Key[edit]

Services like Spotify, Deezer, [Beats Music] already had their business models developed on the base of monthly subscription for listening music and YouTube also wants to implement the idea. This is how Music Key was launched. This is probably one of the most controversial services launched by YouTube. In June 2014 they started changing the licensing terms and apparently the changes would have had a big impact over independent artists. The changes weren't clearly stated initially, but many artists received notifications[16]. Rumors[17] were around about the new streaming service that would oblige artists to make available all their songs on YouTube. So the release of one single video wasn't possible anymore without having listed on YouTube all songs. The creative community reacted and YouTube/Google dropped the plan in that moment. Conditions were re-negotiated and in November a new agreement was reached. This wouldn't have been possible without the contribution of [[1]], [[2]] and other agencies that protect independent music creator’s rights. It is more than clear now that Google understood the meaning promoting content using communities and even created it’s own social media network Google+ This concept was transferred to YouTube since users can create, follow and promote channels. The views for one video aren't as important anymore as channel subscriptions. It’s more about connecting the audience.

YouTube Space; YouTube FanFinder[edit]

One of the newest tools released in this category is YouTube Space, using the log line: “Bringing together the most creative people from the world”. Spaces have been designed as creative hubs in Los Angeles, London, Tokyo and New York. Google invested in production facilities, high technology, equipment for music and video production. It’s like an Abbey Road built for online community. People will normally suspect that there is something behind this new project. Not for now, since YouTube clearly states that: “Participating channels retain all their ownership of content, monetization, and creative control.” The conditions for using YouTube Space:

  • to be at least 18 years old
  • to have a YouTube channel with at least 10,000 subscribers
  • to have full copyrights on the content previously promoted on YouTube
  • to have monetization enabled or previous agreement with YouTube
  • to attend the orientation courses that offer details about how to use the Space - “Unlock the Space”

But for sure, newly released services like YouTube Fan Finders and YouTube Space seem to prepare the creative community for the launch of the new streaming service based on monthly payment. Since the biggest provider of free online music and videos decided to go with this type of service, does this mean that the era of “free music” has come to an? It could be a clear statement regarding the monetization of creative works from the independent artists also, since it could be quite frustrating having millions of views on YouTube and no money in your account.

From marketing perspective.[edit]

It is not a pleasant moment in time for the small labels. As previously stated, YouTube made strategical business decision of making their service an unpleasant space for independent labels. Partly, offering “bad deals”[18] to the small channel owners and in the same time “good deals” with the bigger players. Google has set their ship into a new direction of creating their on music platform similar to Spotify. Hence, Spotify them self follow philosophy of disrespectful deal making. In other words a business communication based on “Take it or leave it”. Unquestionably small labels generate enormous traffic on the platform. The licensing agency Merlin estimates 32.5% market share on the recorded music sales and streams. That is not surprising, due the fact that one of the main communication channels of indie artist is YouTube. Moreover, it is considered as a primary link to all other content distributed to other platforms. It generates most traffic from the music videos which make to some extent revenues. For instance, labels such as Domino (Official label of the The Kills) posses around 200.000 subscribers which is a fairly good amount compared to big labels such as “Roca-a-fella” records with 700.000. However, the point here is that Indie Labels are much dependent on YouTube due to its fast distribution nature. Moreover, it is still free to create and engage communities. Buying media coverage is expensive due the lack of resources: money and connections. That pictures a situation in which small labels are utilizing the Social Media channels as their primary marketing vehicle. As seen above, the distribution of major record labels lies on different principles. Hence, man can consider that nowadays small labels will be slowly overtaken and put into a position where there is a no way of them to make reasonable marketing with the online streamers. The more money that has been put into “clicks” the more advertising revenue will generate for big players diluting the visibility of small players. YouTube acts more or less as a partner in the marketing campaigns of famous singers and very cold in the promotion of small but talented artists.

From copyright perspective.[edit]

Copyright protection is crucial no mater big or small record label. However, in the light of YouTube the rules of the game change. As previously stated copyright ownership violations could to lead to a paradoxical situations in which PR is considered more valuable than law penalties. Essentially, all these labels want PR. Therefore spoofs and mash-ups generate more traffic. In other words “Work together than fight”. When it comes down to copyright bigger players are much more sensitive. From the perspective of indie bands the copyright lies into only the 4 major elements.

  • copyright on the musical composition
  • copyright on the lyrics
  • copyright on a particular performance of a piece of music
  • copyright on the recording of a performance of a piece of music

Any additional legislation on YouTube are not taken into account[19]. Most likely an indie band will tolerate any remixes or even cover versions of the songs as long they are in the scope of another emerging artist. Hence, that unspoken agreement could lead to big problems if a big labels hijacks a song[20] and makes a hit out of it. Not the mention the revenue streams. Regarding money issues, interesting and sometimes absurd situation happen in the music market. Since online streamers make additional and highly “customizable” contracts with artist, indie labels can end up with 1 million plays on Pandora and receive $ 16.89[21] Youtube is also willing to go on the path of Spotify and Pandora of paying major record labels in advance which is another sign that copyrights differentiate dramatically when it comes to big numbers. Some small labels, even encourage fan community to remix and use their music and pay-as-mush as they want. However, this practice is not tolerated nor the YouTube and major record companies. Essentially, the way small labels operate differentiate dramatically with the major record companies. As seen above, the stake of YouTube being the main communication channel is higher for small players. However, the indie artists do not have much chips in hand since online streamers and major labels have agreed to dictate the rules of the game[22]. Small labels need publicity and YouTube is not paying them enough creating a cycle of decline. The less money you have, the less publicity you will have. It is not about talent anymore. And that is pity because major labels used to benefit highly from indie bands and vice-versa. Talent used to bring value. Nowadays not. As for YouTube, they are now in their best position of making the right moves. As a platform that generates huge traffic (mostly coming from music videos) they can juxtapose and manage the agenda of marketing and copyright ownership[23]. This, no one put it so clearly as the vocalist of Radiohead who’s band made a huge pay-as-you-wish campaign:"Indie artists and labels are at the cutting edge of the future of music. To restrict them in this way is to risk creating an internet just for the superstars and big businesses."


With changes that had happened recently in distributing in YouTube and in the Internet generally, the borders of the law are getting more and more blurry. YouTube trends like creating mashups, singing cover songs, using other`s music as own video background. Who actually has copyrights to what content? Is it ethical to use other people creation, change it a little and call it yours, even if law things everything is right?

Original content vs. remix[edit]

Most YouTube users make videos to express them, it helps them to have a creative output. A lot of people who are shy, but want to be able to make something, are proud of have been known to make videos. However, most people do not make a profit from their videos, those who do are YouTube partners and get paid based on how many people view the videos and thus see the ads on and around the videos. The ads are what get the YouTube Partners money. When you create something original, you own the copyright for it. Likewise, when people create content, they may have a copyright to it. As a creative community, it is essential that everyone on YouTube respect the copyrights of others. If you are not sure if someone will violate someone`s copyright, the safest thing to do is to create something completely original, with images and audio you have created.[24] YouTube community guidelines make it very simple. If you created it, it is yours and this and only this, you can upload there. Reality is not that clear.

YouTube Talents[edit]

YouTube is a good place for unknown singers to get noticed by big record companies. There are inspiring stories how people have become famous thanks to YouTube. Justin Bieber, a young Canadian singer, was discovered by his manager this way. Who introduced him with famous people in the music industry. He became famous overnight. It is an inspiring success story for people who seek this kind of fame and they try really hard to get there. Problem is, there are so many of them and how to get noticed in the middle of the crowd? People need get their number of views, likes, comments and shares up, because these are the currency of YouTube. Perfect way to do it is to create a video of original content that goes viral. Easier say than do, so people think of other ways. Users need to make them more easily noticeable in YouTube. So it becomes more about how you present your content, what mark words you use than just the content. Easiest way to do it is to use someone other`s fame to help you get noticed, to make you more easily find-able, because if users search some popular name, their content might pop up and some may even click on them. Is it right to use something what other people made to try to make yourself famous even if you are not making money by selling content created by others? If no, then how these people got famous who are on the top now? Are they forgetting how they got on the top, if they try to sue people for using their content to get themselves famous? Maybe there is a chain of people who have used others fame to get somewhere with their career before started doing their own music? If this is true, then there might be a bunch of missing famous singers who had got on the top just because they broke some copyrights and ethics. Clear ethical standards have not developed on how to attribute the video content moving through the synergistic sharing loop. Even though YouTube offers guidelines on how to attribute content, it’s clear that not everyone follows them, and certain scenarios fall outside those covered by the guidelines. Citizens are posting copyrighted material without permission. And the creator of some material cannot be identified.[25] Users download a song from YouTube, add there lyrics and upload the song again using the same famous name. Maybe the purpose of this activity is purely good will to help others to sing along for example. Some of them mention in video description that they do not have any right to this song, but still, they uploaded a content that does not belong to them. It is against the law. Even if they do not mean any harm, still they get views on their YouTube channel and it is possible to earn money from YouTube, if they have enough views. If money is earned then this activity is not ethical also anymore. To use other people fame in their advantage, users can do many different things. One way to go is mash-ups. Users take music, created by others, short clips and combine their own music video of that. They have created nothing, only used what others have made, the end product might be nothing similar to whatever content has been used. Is it against the law or ethical? Why to upload anything in YouTube, if it causes so many problems about what is ethical, what is not? Because all the eyeballs are there.

YouTube, a search engine?[edit]

If YouTube were a search engine, it would be after the Google search, the largest one. Second reason is that video in YouTube has a chance to go viral, it is less likely to happen if people would host their videos in their servers. Third reason is that YouTube is free.[26] Celebrities have taken notice that is nearly impossible to fight the mistakes people make against the law and the ways they use other people content. Only way to deal with it is to take an advantage of it. Good example to it is Beyonce`s new song called 7/11[27]. It mimics the user created content as somebody recorded a video at home, using a simple one camera and not a large crew. Camera shakes sometimes, and footage is not edited much. No flashy effects and etc. She film herself dancing in the balcony, bedroom, bathroom sometimes sings along, but all-in-all, she mimics the fan created content. It is not hard to notice that it was the whole idea to make people do similar videos on their own to gain fame. And there are already some videos out that have the same name as her video has 7/11 and some of them are quite popular. There is no way that these videos would have such a large audience without the original song. This example proves that top singers try to turn piracy problem and ethical misbehavior into their advantage to advertise their own song. In conclusion, the borders of the law are getting more and more blurry. Things that were against the law and unethical are now normal. Famous celebrities even try to encourage such behavior and turn it in their advantage.

NEW FRONTIERS - Space and copyrights[edit]

Although independent artists are also affected by breaking the copyrights laws, there are still tips and advice on how to cross YouTube’s wide-reaching system known as “Content ID”. Probably one of the most interesting one is the case of Chris Hadfield, first Canadian Astronaut to walk in space. In 2013, he recorded himself singing David Bowie's "Space Oddity" in space[28], on the International Space Station (ISS). The public loved the song that reached over 24 million views. But YouTube had a big challenge trying to solve this case. Music and video were recorded in Destiny module[29], owned by America's space agency, NASA, but was transmitted through Canada, where a piano music was added. The problem is that no clear regulation of copyright in space exists. The video was taken off from YouTube in May 2014, but in November, due to an agreement with David Bowie, the video was available again on YouTube, but the “copyright in space” issue is still waiting for new challenges in order to be solved.



Local music royalty trade bodies, in Estonian case - Eesti Autorite Ühing (EAU) / Estonian Authors' Society, that is responsible to collect royalties from playing the music in radios and elsewhere, are sometimes working against free music in YouTube.

Mass escape from YouTube[edit]

In March 2009 a massive amount of YouTube music videos started to be pulled out from UK YouTube as Google and Performing Rights Society for Music (UK) did not reach to sufficient agreement [30].

Week later it reached to the first wave of deleting Estonian music videos from YouTube[31], among others music that producers had uploaded themselves. Estonian Authors' Society reported that all members of EAS have to report of their music BEFORE they upload their files to YouTube.

In the same time communication bureau Vare&Jaakola asked a rethorical question [32] that how ethical it is that only licensed music is removed, but TV series, adds etc still remains. Moreover, search engines like Google also violates the rule for spreading personal information.

Search engine violations finally came as a topic 5 years later in May 2014, when European Court decided that everyone should have their privacy in internet and the ones who want could have rights to remove Google search engine links if they want so [33]. Estonia became after Germany, France and UK the TOP fourth country that want to remove their content [34].


So legal and ethical issues with music in YouTube are still in blurred area, as music is not the only area. Lot of TV series, adds etc should be in the same category, moreover if EAU or other organizations remove videos from YouTube automatically, but the video owner is not their member, then the owner should have rights to make a complain and ask for damages.

YouTube is still a valuable channel for big musical artist, latest example being Taylor Swift, who took off her music from Spotify and doubled the amounts of her songs YouTube views [35] .

Artist want to earn money when their music is played. For example in radio. To do that they have to join trade body that collects the royalties. But in this case the trade body can also decide what happens with their music in YouTube (if artist does not inform that this is his/her channel - do not take it down).


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