A new Google (NASDAQ:GOOGL) scan aimed at combating copyright violations on YouTube is causing major headaches for video game vloggers and game companies. Companies including Activision Blizzard (NASDAQ: ATVI) and Ubisoft have rushed forward to offer assistance to YouTube creators who were flagged by a scanning system with a history of mistakes that defers to copyright holders whether the claim is accurate or not.
The problem highlights the symbiosis between the top YouTube creators and game developers. Video creators don't always have explicit, personalized permission to use clips of gameplay or music from the soundtrack, but it's considered part of the territory when doing reviews or walkthroughs. (And often game developers will broadly issue carte blanche permission to use the material.) Developers consider the result worth any potential copyright violations because the videos can help drum up interest -- or restore passions -- for the company's products.
And game developers are coming forward to help because the change affects some of the most popular YouTube gaming channels. User TetraNinja has around 500,000 subscribers and claimed on Twitter to have over 400 videos flagged in the new content sweep.
There's early signs that some sort of fix is on its way. But could this type of meddling still hurt Google's long-term ability to make its own ad revenue from YouTube?
What went wrong?
After days of silence, Google finally issued a statement to VentureBeat that admitted the increase in flagging came from a new Content ID scan of affiliate channels belonging to multi-channel networks. These channels are basically subdivisions of large, company-owned networks that previously had contracts with YouTube saying the company would take responsibility for policing its own content for policy violations.
The problem is that there aren't YouTube workers in a bunker somewhere going through videos to decide whether the content should get flagged. This scan is an automated process that checks videos against a database of copyrighted content. The scan's accuracy was questioned last year when it flagged the sound of birds singing as a copyright violation.
The new round of flags could come from Content ID matches to the game developers -- though some have denied this was the case -- or from music owners... or a completely bogus match like the birds. There is an appeals process but it can be lengthy, tedious, and unreliable. The bird song uploader initially had his dispute denied by a company owning a similar music piece. YouTube said the user could take no further action, and the matter was only rectified after an Internet uproar.
And that's why game developers are offering to help.
Developers rush to help creators
Activision Blizzard took to its official game Twitter accounts to offer help to creators receiving flags for using the company's content. From the Diablo Twitter:
If you're a YouTuber and are receiving content matches with the new changes, please be sure to contest them so we can quickly approve them.
The company has a vested interest in getting this matter solved partly due to the newly launched blockbuster Call of Duty: Ghosts. Customers who didn't rush out to buy during launch week could turn to YouTube to help make that purchase decision.
Several other game companies -- including Capcom and Ubisoft -- released similar offers of help.
Will Google fix the problem ... or pay for it?
There are rumors of a fix in the works but even if the matter is resolved, the problem remains that Google had to have seen this coming. YouTube gaming channels have always included copyrighted material and the fact that the game industry hasn't gone after the fair use creators speaks to the (sometimes passive) acceptance. And the Content ID system has produced mismatches for years.
Google openly courts popular YouTube contributors with advertising deals that bring in money to both creator and host. According to Businessweek, YouTube brought in $4 billion in advertising last year -- up over 60% from the prior year. An influx of popular YouTube creators has driven the ad payments per 1,000 views down substantially, which means individual creators are making less money with the same number of viewers.
The advertising money is still benefiting YouTube regardless of the number of users in on the cut. But YouTube still needs popular creators to post videos. And that inclination will diminish if the Content ID system keeps turning out false matches, which can lead to royalty owners receiving ad revenues for videos even if the copyright claim wasn't valid.
Google would suffer if popular users started fleeing YouTube for either privately hosted sites or a new social video network. No, YouTube won't become displaced in a day over one backlash. But the online tides can turn and leave a former hot property feeling cold (see: Myspace).
Foolish final thoughts
This isn't an issue of copyright violators upset at getting caught. Google's causing a major hassle for popular users without offering an expedited appeals process. And continued problems with managing YouTube could lead to an advertiser shortage further down the line.
Brandy Betz has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Google. The Motley Fool owns shares of Activision Blizzard and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.