Peter Kafka

Recent Posts by Peter Kafka

Why Are Big Music’s Videos Trapped on YouTube? An Insider Explains.

blindfoldWhenever I write about the big music companies, I usually try to include a YouTube video from one of the labels’ acts in my post. And then I usually end up grousing because the big music companies’ clips are almost never embeddable–unlike most of the videos on the world’s biggest video site, you can only see them on YouTube itself. You can’t repost them on your blog or Facebook or anywhere else.

Try it yourself. Head to YouTube and look up an “official” clip from any of the big three labels that still put their stuff on YouTube–Vivendi’s Universal Music Group, EMI Music Group and Sony’s (SNE) Sony Music Entertainment. Inevitably, you’ll find the embedding code “has been disabled by request.” (This doesn’t apply to Warner Music Group (WMG), since that label’s stuff isn’t on YouTube at all anymore.)

This isn’t the end of the world. I can almost always find an unofficial clip that does the job. But why do I have to do that at all? Don’t the labels, and Google’s video site, want this stuff distributed as widely as possible–either because the clips can help them sell music or sell advertising?

I’ve asked both Google (GOOG) and the labels about this in the past and have never gotten a satisfactory answer. Essentially, both sides point the finger at each other. But yesterday an employee at one of the big labels tried to answer the question for me, via an email. His argument: Both the labels and YouTube are really collaborating on this one.

Meanwhile, he says, the fact that the labels would be much, much better off if they let people promote their products, for free, all over the Web isn’t lost on label employees themselves. Just not the ones that are cutting deals with YouTube.

Here’s his letter, sans identifying details. Below that: An excellent, and unofficial, Beatles clip.

I wanted to point out something that might explain the inability to embed [major label] videos outside of YouTube.

I work at a major label and I’ve been told informally that embedding is disabled on our label’s YouTube clips because the deal terms negotiated with YouTube on our first licensing deal a couple years back demanded such large advance and per-stream payments that YouTube could only come close to the ad rates required to satisfy the terms by selling the advertising around the video, and not just on in-video overlays. So in the negotiation, YouTube told us only way we could get the terms we asked for was to disable the embedding on our videos.

The decision not to compromise on terms so we could allow embedding has been really difficult to label employees in digital marketing and publicity. The digital business division is rewarded for bringing in big money from deals, but we at the labels are rewarded for realizing profits from breaking artists, and end up being constrained by many of those deals.

We would absolutely prefer the videos to be embeddable to increase the reach of our artists through blogs, MySpace pages, and now (this is a huge detriment, I think) through the YouTube video items on Facebook that people post to their walls.

Maybe it’s not a huge story, but it’s definitely more complex than “major labels are so protective of their content that they disable embedding.”┬áIt’s more a result of the complex incentives created by centralizing digital business deals in a division that is not at all responsible for music and marketing. It can be frustrating.

[Image credit: MoonSoleil]