Policing the Internet for infringing uses of intellectual property is a big headache for content owners. For the largest and most well-funded companies, this is something that can be outsourced for a fee to third-parties. In the audio category, AdRev is one of the most successful, although perhaps not the best known company, and today, it’s s taking a major step by expanding its offering from the existing, full-service model to add a do-it-yourself platform called ContentID.com aimed at independent musicians, labels, and publishers.
Studio City, CA-based AdRev works with major music publishers including Universal Publishing Production Music, Warner/Chappell Production Music, Extreme Music (Sony/ATV Music), BMG, and individual songwriters such as Joshua Mosser and Carl Douglas to manage the use of both their recordings and compositions across the YouTube ecosystem. The company is currently administering 3 million music copyrights on YouTube, which appear in more than 10 million videos, and it generated a 1.1 Billion video views just in July of this year, up 46 percent from 750 million the month prior.
The newly launched ContentID.com allows owners of smaller catalogs to upload their own music catalog to the company’s database, using either a Soundcloud integration, FTP upload, or integration with an artist’s owned-and-opertated YouTube channel. Clients still get access to the company Shazam-like programmatic audio fingerprinting technology and human content identification team, which collectively scour YouTube in search of infringing uses of client-owned music.
When ContentID.com identifies an infringing use of rights holder content, the company notifies the infringing party, but typically does not remove the infringing content. Rather, the company claims that content on behalf of the its client and monetizes it through ads, paying 80 percent of all revenue generated to the rights holder. (Rights holders receive 100 percent payout on videos they upload themselves.) Under a similar model, AdRev is on pace to pay out $4 million in YouTube related earnings to its clients in 2013.
AdRev and ContentID.com are divisions of AudioMicro which also owns ImageCollect.com and AudioMicro.com. The company has raised a total $1.25 million in venture capital from backers including DFJ Frontier and Fotolia, most recently through a $750,000 seed round in January 2011. The company has been cash flow positive and profitable since the end of 2011, with AdRev being the largest of its businesses.
Given the chorus of negativity surrounding patent trolls, it would be easy to lump AdRev, ZEFR, and others operating in the YouTube contentID space into this nefarious bucket. But this couldn’t be a less suitable comparison. First, these companies rarely, if ever, sue the infringing party or seek punitive damages for past infringements. Nor do they don’t typically remove the content from YouTube. Rather, they simply use the illegally uploaded uses of their client’s IP as distribution and drive audience to that content to increase ad-based monetization.
Secondly, AdRev and ContentID.com aid their clients in “commercializing” their IP through micro synchronization partnerships with YouTube MCNs including Maker Studios, FullScreen, Big Frame, Bent Pixels, MiTu, and others, and also through uploading this content to iTunes and Amazon.
AdRev is competing with similar services offered by many music labels, but few, if any, have built comparable technological platforms or dedicate the amount of staff to the problem that AdRev does. Similarly, other startups are beginning to enter the space, including recently launched Audiam, but have years of catching up to do before they can operate at AdRev’s scale, with the company having been administering content rights on YouTube for more than 2.5 years.
As YouTube evolves from a Wild West of user-generated videos to a source of premium content that may one day compete with television, the size of its audience and the value of its advertising will continue to swell. With this comes both an opportunity and a risk for content owners. For the first time in history, those who own video and music IP have the opportunity to build meaningful businesses on YouTube. At the same time, they risk seeing the value of that IP become degraded if they do not effectively police its use across the ecosystem.
With 100 hours of video are uploaded to YouTube every minute, and 6 billion hours of video consumed monthly across the platform, this is simply a job too large for an individual rights holder or even a team of people to handle manually. Companies like AdRev and ZEFR are becoming increasingly valuable partners in this fight. And today, with the launch of ContentID.com, AdRev offered to go to battle alongside even the smallest music rights holder.
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