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Facebook’s video plan? Grow like hell, deal with copyright later

Jul 10, 2015

Tales of the early days of YouTube invariably invoke cats on skateboards and shaky home videos, but that's not the only way it got so big. The site, even in the beginning, was crammed with professional content – Seinfeld episodes, soccer highlights, Viacom cartoons – that typically turned up without the permission of the copyright owner.

The copyrighted clips led to tension with content owners, but YouTube (goog) avoided serious trouble thanks to a legal shield known as a "safe harbor" that protects technology platforms. Eventually, the site quieted most of its critics by introducing a revenue-sharing scheme.

Now, Facebook has arrived as the next mega video platform. As it moves to compete or even surpass YouTube on the video front, look for it to run the very same playbook as its rival when it comes to copyright concerns.

4 billion views a day and "freebooters"

Facebook's video offerings grew very big, very quickly. As my colleague Erin Griffith's recent profile explained, a change in tactics and some crackerjack engineers led Facebook videos to evolve from a sideshow into a YouTube rival almost overnight; as of February, Facebook (fb) was neck-and-neck with YouTube at 4 billion views a day.

The rapid growth came about in part because the social network's algorithm gave a special boost to posts that contained a video link, which in turn has prompted businesses and brands on Facebook to post even more videos. This raises an obvious question: where is all this video coming from?

As it turns out, some of it is being mined from YouTube. As Slate reports, content creators have been dismayed to discover that co-called "freebooters" are using software to copy their original videos from YouTube, strip out the original credits and then post it to Facebook. One example cited by Slate is a part-time video maker who shot a slow-motion tattoo film for his YouTube channel, only to discover an unauthorized and uncredited version had been shared millions of times on Facebook by a U.K. media company.

The U.K. company who ripped the tattoo video could, of course, have simply posted the YouTube link on its Facebook page. But doing so would have led Facebook to display a ho-hum link and thumbnail pic, rather than the sort of gorgeous, instant-playing experience that appears when a video is uploaded natively to the site.

As for Facebook, the presence of freebooters' video brings some undeniable advantages. The videos induce some users to spend more time on its site, and not on YouTube, which is owned by rival Google. (Facebook also can't be displeased that YouTube misses out on a revenue opportunity whenever someone watches a video on Facebook instead.)

The only snag here, of course, is that content creators lose out on revenue as well. On YouTube, the tattoo guy earns 55% of ad revenue associated with the video while on Facebook he earns nothing.

Facebook sits in a safe harbor, for now

"We take intellectual property rights very seriously. This is not new to Facebook," said a company spokesperson by email, adding that the company has tools in place to report copyright violation, remove offending material, and suspend the accounts of repeat offenders.

These measures sound imposing, but won't surprise anyone familiar with copyright and the internet. That's because they are the table stakes required for any website that publishes user-generated content, and wishes to benefit from a legal bargain that grants immunity in return for a copyright-takedown system. This immunity is known as "safe harbor." In plain English: as long as Facebook continues to follow certain copyright procedures, you can't sue it when someone uploads your video without permission.

"Facebook has a takedown and account termination system that should provide it protection under the Digital Millenium Copyright Act," says Venkat Balasubramani, a tech lawyer based in Seattle. He adds that there's no simple legal option to stop the freebooters.

"One question here is who may sue. YouTube obviously can’t and won’t, since it would undermine their own efficacy as a platform, and they probably don’t own the underlying content anyway. This leaves the video uploaders ... however, it’s not an easy endeavor to undertake this type of a lawsuit."

The challenge of chasing down copyright infringers has led content owners, in general, to claim the safe harbor rules are too lax, and that platforms like YouTube should do more to take down unauthorized videos. Studios have filed a spate of lawsuits to argue that more websites should be liable under a "red flag" provision in the copyright law, which can strip a site's legal immunity in the event they obviously should have known about the infringement, or if they are directly making money from it.

But so far those lawsuits, including a long-running one against YouTube, have not really changed websites' responsibilities when it comes to copyright, according to Lothar Determann, a copyright lawyer with Baker & McKenzie in San Francisco. He added more broadly that the law's larger goal of protecting tech platforms still applies, and courts will not order websites to conduct copyright investigations.

The freebooter issue for Facebook, then, appears to be less of a legal problem than a moral one. Video owners may come to blame Facebook – safe harbors notwithstanding – for using their content to get rich while flouting their copyright concerns. Such claims, whether fair or not, have dogged Google and YouTube for years, and led to legal and political headaches.

How long till Facebook cuts a deal?

In rolling out its video tools, it feels like Facebook has reverted to its old "move fast and break things" philosophy. The company must surely have anticipated that it would have a copyright kerfuffle on its hands but, snug in its safe harbor, it pushed forward all the same – just like YouTube did before.

Now, the question is how loud the complaints will get, and long it will take for Facebook to implement the solution that ultimately quelled most of YouTube's critics. That solution is a technological tool called ContentID that spots infringing content, and then gives copyright owner a choice of removing it or else overlaying ads in a bid to make money from it.

According to Facebook, the company is already using Audible Magic, an automated system that can detect media bearing a registered copyright in order to remove it from a user's stream. The system, however, may not be easily available to small or independent creators such as the maker of the viral video about tattoos.

Audible Magic, even if it were universally available, also does not offer a revenue sharing mechanism. Then there's the question of how easy it will be for creators to discover their content is being shared in the first place, given that Facebook videos are not public in the same way that YouTube ones are.

"This is a significant technical challenge to solve," according to the Facebook spokesperson, who suggested more information will be forthcoming this summer. (Skeptics, in the meantime, may wonder why Facebook, which is so excellent at technology, has been confounded by an issue Google solved in 2007).

It will be no surprise, then, if Facebook has a ContentID system of its own up and running by the end of the year, especially given the news it is pursuing video music deals. At that point, some may come to the conclusion that Facebook could have matched YouTube's copyright tools all long - but first it had to catch up.

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