The Lesson Behind Rebecca Black Pulling "Friday" From YouTube

Today comes the news that Rebecca Black’s “Friday” video is no longer available on YouTube. No great loss there, but what is intriguing is that apparently the video was pulled due to a copyright claim filed by Rebecca Black herself. While it’s not exactly clear what's behind this, the video had amassed 167,370,534 views before it was taken down.

The second interesting piece to this is that ARK Music Factory, the company that produced the song and video, had experimented with a $2.99 YouTube rental earlier this week. From a sales perspective, this was about 150 million views too late, but that's not the point. Regardless if you like or abhor the song, there's a bigger lesson here.

Just a little background: Rebecca's mother paid ARK Music Factory $2,000 to produce the song and video. As these things go, no one expected anything other than a vanity release with a few thousand views if she was lucky. Much to everyone's surprise, the video blew up, went viral and was quite the rage for about a month or so, although more for the general awefullness (is that a word?) of the song and video than anything else.

Now here's where the business part of it gets intriguing. If ARK/Rebecca had the presence of mind to set up as a YouTube affiliate after they saw it blowing up, it's possible that about $100,000 could have generated from adverts (which is a pittance for 150 million of anything). It's also rumored that there was about 300,000 digital sales of the song (although there's no way to verify that), which would've brought in about another $200k. The big question is - who got the money?

This is where the lesson comes in. Was the $2000 Rebecca's mom paid ARK a buy-out? If so, what did it buy out? Who owned the song? Who owned the publishing? Was there even a contract that stipulated any of this? Did ARK or the Black's try to get around a signed agreement?

Without knowing any of the details, on the surface it seems like ARK wanted to generate some last minute revenue so they slapped a $2.99 rental on. The Blacks, unhappy with their end of the payout, retaliated by filing a copyright claim to take the song down. YouTube doesn't necessarily care who owns the rights; all it cares about was that someone claimed copyright infringement, so they play it safe by taking action, so the song came down.

So the lesson? This is a highly unlikely scenario that probably won't be repeated for a long time (at least in this fashion), but it's always, always, always best to have these things worked out ahead of time just in case some unforeseen success occurs. Establishing ownership of any intellectual property up front is by far the least painful scenario in any creative venture - even one as far fetched as Rebecca Black's "Friday." You've been warned.

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The Myth Of Streaming Royalties

Nearly everyone in the music industry believes that someday in the near future, the music business will change from a digital download business to a streaming business, with listeners subscribing to a service like Rhapsody to essentially rent their music instead of buy it. Subscription is something that the record labels desperately want, the idea being that getting a steady $10 a month from say 10 million people is a pretty good steady income and better than the ups and downs of CD and download sales.

Of course, the problem here is that it's good for the record labels, and not that good for the artist. How is that money divided up? How much will the artist make in the end? Do recording contracts even cover this scenario? Does the artist get paid like a songwriter does from ASCAP or BMI?

What may be a window into the future lies in a statement made by David Renzer, chairman and CEO of Universal Music Group Publishing at the Association of Independent Music Publishers (AIMP) earlier this year, according to Digital Music News.

"For every 250,000 streams on YouTube, that is the equivalent of one credit of ASCAP performing rights value," Renzer relayed. "One credit is less than $8, it's about $7.60." 

That means that a song with a massive amount of traction like Rebecca Black's "Friday" will only received $3,405 for 112 million views.

Now consider this. Commercial broadcasters pay $.0019 per performance on a web broadcast, which will increase to $.0021 in 2012 and $.0023 in 2014. That's less than 1/4 of one percent that you still have to split with your publisher, if you have one. Webcasters like Pandora pay $.00102 in 2011, $.00110 in 2012, $.00120 in 2013, $.00130 in 2014 and $.00140 in 2015, which is even less.

If it wasn't bad enough being an artist and trying to make money in the digital download age, being one in the streaming age is going to be even worse. Starts to make gigging and selling merch look pretty good, doesn't it?
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How "Friday" Proves Payola Still Exists

By now everyone has either heard or heard about the runaway viral YouTube hit "Friday" by 13 year old Rebecca Black. You can argue all you want about the merits of the song, but one thing's for sure, with more than 60 million views so far, someone out there loves it. So what's confusing is that the 60 million views have turned into just 12 radio plays so far. Yes, you read that right - just 12 radio plays.

But listen to what one radio programmer told Digital Music News:
"It's not going to get played unless a major label promotion department brings all of its resources to get it played, otherwise things just don't get added. Nothing's getting incented or enticed - it's the reason why there aren't that many independent songs on the radio right now. It's also the reason why records like 'Friday' and 'Bedroom Intruder' don't get radio play."

Excuse me, but doesn't that sound like the programmer is admitting to payola? They won't play a song unless it's incented or enticed? There are strong laws against payola (where a label pays a station or programming for them to play a song) and the music and radio business has seen at least two major payola scandals that nearly brought them to their knees.

Forget about the payola for a second. Just how out of touch is radio if they have this huge consumer demand yet they ignore it? If there was ever an example that radio and the major labels are about nothing but money, this is it.

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