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I don’t think the lay public would ever consider corporate lawyers for major music publishers or tech corporations particularly innovative or catalysts for massive technological change. I mean, I didn’t. You have these very well-paid attorneys working very long hours to sue companies big and small for some sort of infringement or copyright violation that then seemingly hamstrings the recipient company’s ingenuity, ability to conduct business, and grow.
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But the quagmire of corporate litigation can spawn solid new foundations, as a recent conversation with my friend Avi Gandhi led me to realize. Desperation breeds ingenuity, after all. And an entity can get pretty desperate when it’s being sued for a lot of money.
Case in point is the six-year-long, $1 billion Viacom International, Inc. v. YouTube, Inc.
In 2007, media conglomerate Viacom filed a $1 billion lawsuit against YouTube and its parent company, Google, accusing them of massive copyright infringement. Viacom claimed that YouTube facilitated and profited from the unauthorized distribution of copyrighted content owned by Viacom, such as TV shows and movies. YouTube, in its defense, invoked the safe harbor provisions of the Digital Millennium Copyright Act (DMCA), arguing that it was merely a platform for user-generated content and that it promptly removed infringing content upon receiving notifications from copyright holders. The case went through several rounds of legal battles, with courts generally ruling in favor of YouTube. In 2014, the two companies reached a settlement out of court, with the terms remaining undisclosed.
But the suit and its ten-figure price tag prompted YouTube to innovate. The company developed and implemented more sophisticated measures–namely its Content ID system–to better identify and manage copyrighted content uploaded by users.
Content ID, though still far from being perfect, is perhaps the biggest and most lucrative investment Google ever made into YouTube post-acquisition. Back in 2018, Google told reporters it had invested $100 million developing Content ID and it had paid out more than $3 billion in ad revenue to content creators over the course of its existence. Five years later, and that number has to be close to $10 billion. Factor in YouTube’s standard 55/45 revenue split, and you’re looking at an additional $12 billion in revenue to YouTube. That’s $12 billion of revenue that wouldn’t have existed had it not been for a $1 billion lawsuit prompting the innovation.
The same thing is probably going to happen in AI.
On April 4, TikTok user ghostwriter977 uploaded a song titled “Heart on My Sleeve” to various music platforms, including Spotify, Apple Music, and YouTube. The song features an original beat and lyrics, but unoriginal voices of Canadian musicians Drake and The Weeknd. Their voices were created by AI.
The track gained significant traction, accumulating 600,000 streams on Spotify, 275,000 views on YouTube, and 15 million views on TikTok before being removed after the platforms received complaints from Universal Music Group.
The whole thing is reminiscent of the early days of online video where major rights holders were trying to sue platforms into oblivion for potentially upsetting status quo business models before the technology advanced to a certain point where everyone could make money from the new distribution.
You can hear me talk about it all on the latest episode of Creator Upload (and check out my guest Avi Gandhi, too). Subscribe on Apple Podcasts or whenever you listen. You’re gonna dig it.