You Tube & Copyright

I attended an interesting presentation by Google/You Tube lawyer Mark Cavanaugh at their Pyrmont office last month.

Google purchased You Tube for a lot of money several years ago. They employ a lot of lawyers and have developed a number of systems and protocols to ensure that they don’t get sued for copyright infringement in respect of content uploaded by users to the You Tube platform. The most common form of infringement is where someone posts content that they have obtained from somewhere else – it could be a song, a video or film broadcast or still images – where the underlying rights belong to a third party.

You Tube can boast some quite amazing statistics. One billion views per day. Almost 20 hours of content uploaded every minute. Hundreds of thousands of videos uploaded daily. In Australia alone - 5.8 million monthly users and 171 million monthly page views.

Safe Harbour

You Tube relies on the same protection from copyright infringement that most other social media networks do, via what is know as “safe harbour” protection. If you choose to post content on their site, you tick a box to declare that you own the content or you have the permission of the content owner to use it. That declaration protects You Tube, until a third party contacts them and says that the content is infringing their copyright. At that point, You Tube follow a process of notification and enquiry that may lead to the content being removed or, in some cases, appropriated by the ultimate copyright owner. How proactively You Tube follows up on the infringement allegations, may determine its future liability.

Monetising Content

On that point Mark gave an example of what has come to be known as the JK Wedding, where a couple choreographed themselves and their bridal party entering the church, putting on a “performance” to Chris Brown’s “Forever”. The song had been a moderate success on the Sony owned label Zomba. They didn’t have permission to use the music that went with their film clip. The clip went ballistic. In the first week it had almost 10 million views (that’s the power of social media). To date, its had over 30 million views. What happened was that Sony grabbed it, using content management tools supplied by You Tube, and embedded links to iTunes and Amazon. The track went top 10 and generated significant sales, using the clip created by the bride and groom for free.

The interesting part of this for me and Surry Partners, is understanding that what really drives You Tube to be so proactive in this area, is the focus on allowing content owners to monetise content by placing advertising around it, or in the case of some to their media partners, providing links to iTunes to achieve sales. You Tube get revenue shares of up to 55% - apparently its all negotiable. You Tube now have contracts in place with major studios, music labels and sporting organisations to facilitate those owners distribution of their content, utilising the You Tube platform.

Copyright & the role of ISPs

The other interesting battle ground emerging in the digital content distribution space is the role and responsibilities of ISPs to prevent copyright infringements over their networks. The Federal Court has reserved its judgement in the case brought by major content owners through their representative body (AFACT) against iiNet, who claim the internet company has not been doing anything to stop its customers from illegally sharing movies and TV programs on the net. iiNet says its not breaching copyright by providing the tools that may allow their customers to do so. The outcome of this case may have some far reaching consequences.

My view is that the ISP’s have the tools to monitor what is being downloaded over their networks and restrict it, but they currently have no obligation to do so and no incentive. Now, what if the content owners were to incentivize them by underwriting the administrative costs sending out warnings or cutting people off and/or offer to revenue share (assuming the ISP were to direct the infringer to a legitimate source and a sale was achieved) ? Now there’s an idea….

Watch this space.

© Peter English
Surry Partners Lawyers
 

Federal Budget May 2009 - Highlights

Superannuation concessions

The annual cap for concessional superannuation contributions has been halved from $50,000 to $25,000, and the transitional concessional contributions cap has been reduced to $50,000 per year from its former annual limit of $100,000.

The superannuation co-contribution scheme will be reduced to a rate of 100% for contributed amounts for the 2009/10, 2010/11 and 2011/12 years, increasing to 125% for the 2012/13 and 2013/14 years and returning to 150% for the 2014/15 year.

From 1 July 2010, the government will introduce three new “Private Health Insurance Tiers” in respect of the Private Health Insurance Rebate

From the 2008/09 year, the Medicare levy low-income thresholds will be increased to $17,794 for individuals and $30,025 for individuals in families.

The First Home Owner’s Boost will be extended for an extra six months.

The employee share scheme deferral election will not apply to shares and options acquired after 7.30pm on 12 May 2009.

From the 2009/10 income year, taxpayers with an adjusted taxable income of over $250,000 will have excess deductions quarantined to the business activity under the non-commercial losses rules.

From 1 July 2009, the foreign employment income exemption will only be available for income earned by aid or charitable workers, government aid workers, and specified government employees.

From 1 July 2009, Family Tax Benefit Part A (FTB-A) payment rates will be indexed by the Consumer Price Index. The higher income thresholds for family payments (FTB-A, FTB-B and Baby Bonus) will be maintained at their current level until July 2012.

A Paid Parental Leave scheme will be available to parents for births and adoptions that occur on or after 1 January 2011.

A bonus deduction of 50 per cent will be available to small businesses that acquire an eligible asset between 13 December 2008 and 31 December 2009 and install it ready for use by 31 December 2010

The application of the income test for the entrepreneurs’ tax offset will be deferred for 12 months and commence on 1 July 2009.

The government has made the income recovery subsidy payments for the Victorian bushfires and for the North Queensland floods exempt from income tax.

Certain grants to small businesses and primary producers affected by the Victorian bushfire will be income tax exempt.

From 2010/11, the current R&D concession will be replaced by the new R&D tax credit.

From 1 July 2009, the non-commercial loan rules will be extended to payments by way of a licence or right to use real property and chattels.

The government will convert Medibank Private to a “for profit” government-owned business enterprise in early 2009/10.

There has been confirmation that the immediate annuity conditions for life insurance companies did not change when they were transferred to ITAA 1997.

Australia’s foreign source income attribution regimes will be reformed.

A number of technical amendments will be made to the Uniform Capital Allowance rules.

The government will implement the recommendations of the Board of Taxation to improve the taxation treatment of off-market share buy-backs.

The government will change the thin capitalisation regime for approved authorised deposit taking institutions.

Australian managed investment trusts will be able to make an irrevocable election to apply the capital gains tax regime as the primary code for taxing certain disposals of assets, with effect from the 2008/09 income year.

A limited CGT roll-over will be provided for assets transferred between trusts that have the same beneficiaries with the same entitlements and no material discretionary elements (ie fixed trusts).

From 1 July 2010, TFN withholding arrangements will apply to closely held trusts.

The government has released its interim response to the High Court decision in FC of T v Word Investments Ltd 2008 ATC 20-072.

The government will provide a mechanism to conduct a triennial review of the guidelines for, and organisations on, the four deductible gift recipient registers, with effect from the 2009/10 income year.

The government will provide $595.2m over four years to help businesses remain viable in the face of the global recession, to tackle emerging revenue risks and promote community confidence in the tax system.

Treasury will be provided with additional funding to fund private sector expert input on the practical and commercial issues arising from proposed tax changes.

A discussion paper has been released to progress the Tax Design Review Panel’s recommendation that consideration be given to whether or not the Commissioner should be given further power to modify the tax law to give relief to taxpayers.

Over 100 provisions in the tax laws that provide unlimited amendment periods will be repealed.

The age pension age will be gradually increased to 67 years of age.

Superannuation funds will be required to align their lost superannuation reporting with unclaimed money regulations and to transfer lost superannuation accounts with balances less than $200 to unclaimed monies.

The minimum drawdown amount for account-based pensions will be halved for the 2009/10 income year.

The future tax panel's review into retirement incomes has released its report, recommending keeping the superannuation guarantee charge at 9%, increasing the age pension age to 67 years and aligning the age pension with the preservation age.

Australia and New Zealand have agreed in principle to allow movement of superannuation benefits between Australian and New Zealand superannuation funds.

The administration of GST is to be streamlined, and compliance costs reduced, from 1 July 2010.

The GST law will be amended to clarify the GST treatment of the Carbon Pollution Reduction Scheme.

Countries eligible for the Indirect Tax Concession Scheme have been expanded.

The offshore exploration incentive in the petroleum resource rent tax will be extended by one year.

With effect from the introduction of the Carbon Pollution Reduction Scheme all Kyoto units registered in Australia will be subject to the scheme’s proposed tax treatment.

The government will delay the start date of the Carbon Pollution Reduction Scheme by one year to 1 July 2011.

Commentary by CCH and the Institute of Chartered Accountants of Australia