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With YouTube-MP3.org, Google Gets a Dose of Disruption
Over the last decade, Google Inc. has earned a reputation for rabble-rousing by pushing the limits of the traditional marketplace. But a recent confrontation underscored Google's own rapidly changing circumstances: The tech giant and its rebel lawyers were on the receiving end when a 21-year-old student stood up to Google's YouTube division.
At the heart of the commotion is Philip Matesanz, a computer science major who lives with his parents in Germany. In 2009 he launched YouTube-MP3.org, a website that enables users to rip audioprimarily musicfrom YouTube videos and convert it to mp3. The service is free for users; Matesanz earns revenue from ad sales. He won't disclose his earnings, but he's apparently doing well. He says he spends a "six-digit euro figure" on annual site maintenance.
It's unclear when Google learned about the service, but its first response was a cease-and-desist letter, sent this past June, telling Matesanz that his website violated YouTube's terms of service agreement. The writer, Harris Cohen, associate product counsel in YouTube's San Francisco office, gave Matesanz a week to shut downor face possible "legal consequences."
Matesanz hasn't backed down from what he calls a "David versus Goliath" battle. In an interview, he says that Google is treating him "like a big corporate enemy" instead of the inexperienced young adult that he is. Besides, he adds, two copyright lawyers in Germany assured him that he's complying with his country's laws.
Google refused to make Cohen or other members of its law department available for interviews. But in an email, a spokesperson for YouTube said, "We have always taken violations of our terms of service seriously and will continue to enforce" them. They specifically prohibit applications that "store copies of YouTube audiovisual content."
So far Google has shown no inclination to sue. But Matesanz says that in June, YouTube did compromise his business by blocking his servers' access to its site. Since then, more than half of his conversion attempts have failed. He could circumvent the problem by using available software, but he prefers not to play what he says would be "a cat and mouse game."
What Matesanz wants is a dialogue with Google about how best to meet users' needs. He says he's contacted "lots of Googlers," but hasn't received any real response. So he turned his request into a cause by starting a petition on Change.org to gather signatures of supporters. At press time there were more than 1 million. He plans to print the list and present it to a Google office.
"They always say they focus on users' rights," he says. "It would be very embarrassing for Google if they were to read 1 million signatures and ignore them."
Experts disagree about the legality of third-party recording. One of the lawyers advising Matesanz, Philipp Redlich of Härting Rechtsanwälte in Berlin, said in an email that German copyright law permits making single copies for private use. YouTube's terms of service don't apply, he added, because Matesanz never agreed to them. Under the German Civil Code, standard business terms don't become part of a contract unless they're affirmatively accepted. Simply accessing YouTube's platform doesn't qualify, he argued.
U.S. copyright law prohibits the unauthorized reproduction of copyrighted material. But Sherwin Siy, legal director of Washington, D.C.based advocacy group Public Knowledge, says the issue is "fair use." While there's no strict formula to determine whether and how it would apply, the U.S. Supreme Court held in Sony Corp. of America v. Universal City Studios the 1984 "Betamax" case that recording television broadcasts didn't amount to copyright infringement. "Time shifting" content was deemed permissible, and Siy finds a parallel in Matesanz's recorder. "I would find it hard to distinguish this from recording a television show," he says.
But if Siy can't find a distinction, the Recording Industry Association of America can. Steven Marks, the RIAA's GC, says that unlike broadcast recording, conversion sites create new products. "A lot of people want to extend Betamax," he says, "but what's happening here is not time shifting."
The RIAA works with Google on a variety of matters, and Marks says it's cooperative. But the association is frustrated by the ease with which Google can be used to access unauthorized music and by Google's sometimes lax enforcement: "This is front and center the issue we talk to Google about addressing."
These days, Google has added incentive to crack down. Financially, it has a lot to lose. The company generates revenue from advertising on YouTube, so it loses money when users download files instead of returning to hear them again. Third-party recording services also cut into Google's ability to sell music on Google Music, the online store it launched last November to compete with iTunes and Amazon MP3.
Google's purchase of YouTube in 2006 also brought a new set of liabilities, not least of which was a billion-dollar lawsuit brought by Viacom Inc. Google won the first round, but in April the U.S. Court of Appeals for the Second Circuit revived Viacom's claims that material on YouTube infringed its copyrights.
Is Google trying to avoid similar claims spurred by audio recording? Jon Grossman, an IP lawyer at Dickstein Shapiro, says, "Google has to be careful" about knowing that the Matesanz site is out there "and not doing anything about it." The company now has a foot in both worlds. It's similar to a television network, says Grossman, and he's starting to see its interests align with those of rights holders.
That would seem to leave a certain German student out of Google's circles of trust and stuck in the square of persona non grata.