Content ID as a Solution to Address the Value Gap

Abstract

In September 2016, the European Commission included in its Proposal for a Directive on Copyright in the Digital Single Market an obligation for user-uploaded content platforms to introduce effective content recognition technologies as a means to address the value gap. After describing the size and origin of said value gap, and taking YouTube's Content ID technology as a reference, the paper assesses the effectiveness of this technology in identifying sound recordings and musical works. It then analyses how rights holders are currently using Content ID and why they have not consistently applied it to block access to the content they own. The paper suggests that an agreement would have to be reached by a significant amount of record labels, most notably the majors, to act in unison and use Content ID to block their content on YouTube until it agrees to pay fair remuneration for the making available of their content. Such an initiative raises several questions. First, whether record labels would be able to stick to such an agreement and not be tempted to unblock access to their content to benefit from YouTube's promotional capabilities. Second, whether this form of cooperation among competing labels could be considered a concerted practice, potentially contrary to antitrust regulations. And third, whether any potential negative effects on competition could be outweighed by increased efficiency in the market and thus be authorized by antitrust authorities. Keywords: Content ID, value gap, YouTube, Spotify, Digital Millennium Copyright Act, E-Commerce Directive, Copyright in the Digital Single Market, IFPI, music streaming, digital music, sound recordings, music copyright, recording industry, music industry