How the New Boss Treats Indie Audit Rights

YouTube Large
I happened to attend a panel recently about monetizing content on YouTube.  There were two panelists from YouTube and one from a digital distributor.  The distributor rep did a great job of describing how a large digital distributor dealt with monetizing video content on YouTube.

Given that the back of the envelope ratio I’ve developed from many conversations with rights holders, I currently estimate that “montization” on YouTube means earning about $2,000 per million views.  So make of that what you will.

This was an excellent opportunity to raise a burning question that has repeatedly come up about the YouTube indie publisher license–no one can find the audit clause.

Now an audit clause is a fundamental part of every license.  Once you get your statements, that’s just the first step.  The purpose of having the audit clause is so that the person trusting their records or songs to the company doing the exploiting has the opportunity to check if they’ve been paid correctly by looking at what’s behind the statements.  You know, trust but verify.

I listened to the whole presentation from the YouTube representatives and heard one thing of interest and didn’t hear anything about the audit clause.

They kept referring to “monetizing”.  As in, you don’t have to monetize your “content”, you can claim it and say you don’t want to monetize it.

But what if you claim it, don’t want to monetize it, and want it removed–what then?  DMCA notices again and again and again.  So wouldn’t you want to monetize it?  (This is called the notice and shakedown.)

What that means is that you can leave it up there, not monetize it, and it will just continue to draw traffic to YouTube.  Which is pretty much the only game in town, even for Vevo which depends on YouTube for the vast majority of its traffic.  This is because Google has subsidized YouTube since it bought the company in 2006 so it can extend its monopoly in search to videos.  That is pretty much done now.

So what about that audit clause?  Since it didn’t come up, I asked a question about it.

“I looked, and looked, and looked and looked at your indie deal for an audit clause and I didn’t find it.  Is that because it’s not there, or because I missed it?”

Nope, it’s not there.  When asked to explain why every other rights holder in the room had an audit clause but YouTube did not, I was told it was because it was too much trouble for YouTube to be audited by a bunch of little companies.

Now that’s an interesting way to say it.  Not that it was too much trouble for YouTube to be audited, but that it was too much trouble to be audited by indies.  Now where have we heard that kind of thing before.

But it’s all OK because all they would do is give you your statements which you could get anyway and they won’t let you look behind them the way it has been the tradition in the music business for 100 years.

In other words, trust me.  And the main reason you should trust me is because I’ll take your music whether you trust me or not.

Cool.  Meet the new boss.  Worse than the old boss.

No major label or publisher would have the balls to look you in the eye and say I don’t care about your rights because you’re too small.  You know who says that kind of thing?

A monopolist who knows nothing about the business they are trying to screw over.


  1. Wow youtube boss.

  2. Good for the indies!!!