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Nintendo's terms compared to Music industry/other Licenses

Discussion in 'YouTube Video Monetization & Partnership Forum' started by markkaz, Feb 2, 2015.

  1. markkaz
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    Nintendo's new program (links below) basically licenses their content for YouTubers to be able to use.

    1. If you submit individual videos with Nintendo content, the deal is 60/40.
    2. If you connect your whole channel to Nintendo's MCN, you get a better deal, 70/30.
    They get 30% of every video you do even if it doesn't contain Nintendo content.

    I should note the guide states that "This rate may be changed arbitrarily". I don't know if this means that Nintendo would negotiate a better percentage for larger channels or if it means they can arbitrarily change the agreement unilaterally during the duration of the contract.

    How do these terms related to the music industry? What percentage are the rights-holders getting for people doing cover songs? What is the percentage that the artist/YouTuber keeps?

    If you know of other licensing agreements from other industries, what are the licensing rights and the revenue share agreements. It could be audio or visual.

    https://r.ncp.nintendo.net/terms/
    https://r.ncp.nintendo.net/guide/
     
    #1 markkaz, Feb 2, 2015
    Last edited: Feb 2, 2015
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  2. Shane
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    To license a "top" song for use in even the background of a video can cost from high 3 figures up into the 5 figure mark.
    For less popular or older songs it can still be 2-4 figures or a hefty revenue share, you see this with YouTube's direct cover song program and also Maker/Fullscreen's cover song program with a few major labels with those two MCNs they take their normal network share so say 30% and then another 40-60% on top of that from the remaining if you cover a song they have a license for.

    It is quite a different market though, with a song because it's so short and audio only, it could be just listened to behind the video and not bought separately although not convenient.
    With a game, even if they see 10-20 minutes of a 5+ hour game or of a multiplayer mode you could put 50+ hours into it's unlikely that you would be content on just watching the game rather than buying it for yourself if you have a major interest.

    The Nintendo Program is in essence not "fair" but then again they are not obligated to be fair.
    Pretty much anyone who's been against it though is just saying "Well then people will just not make Nintendo videos"

    Well Nintendo titles tend to be most major releases on their own console, for channels dedicated to either the console or to a certain game published by Nintendo they cannot really just stop making content for them.
    As I see it, they've got from being able to get 0% of the revenue to being able to get 60-70% and still continue producing their content, for those channels who do a variety of games they can choose not to make Nintendo videos now sure it will only be a few titles to cross of their list or if they do decide to, well they are much better off revenue wise now with 60% than they would have been in the last year on 0%.
     
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  3. sammek
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    I think we are about to enter an era where creators (finally) will be able to feature copyrighted material in exchange for a certain % of the revenue. Ideally the revenue cut will reflect actual usage of copyright material i.e in proportion to % of the video.
     
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  4. markkaz
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    @sammek I agree that this might be the dawn of a new era. Non-video game creators should also be aware of what is happening. Creating content using intelectual property that is not yours can expose you to litigation and claims.
     
  5. Tarmack
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    We're in a nebulous area of copyright law right now. To think that this is an olive branch from copyright owners is an enormous mistake.

    My reasons are as follows:

    YouTube operates on an immediate punishment, deferred resolution system in favor of copyright holders. ALL content can be flagged, regardless of type without any oversight or review. This is a clear violation of the principles of Fair Use. In order for someone to do a review or news piece of/on Nintendo product, they need to let Nintendo claim some of that revenue. This introduces a conflict of interest. News stations don't have to pay Budweiser when they do a news story on the company. Nor do reviews of any kind ever have to ask permission to do their review. It is the entire basis of consumer protection in law.

    And, I personally don't believe in the idea of visual sharing of gameplay being a violation of intellectual property. This is a misnomer we have been fed by lawyers over the last 15 years that video games are licensed, not purchased. Absolute garbage. It is an interactive medium in which the player, whether through voice or not is creating a new experience simply through their own choices and methods of interacting with the software. It is no different in my eyes to a visual sharing experience of playing any other game of any type, whether boardgame, sport or hell, even action figures or toy cars.

    I'm not too concerned at the moment that this will take off. Nintendo has essentially ensured that a significant portion of their most enthusiastic fans with YouTube channels won't upload videos. They've actively reduced their incoming views and thus exposure by electing to take 30-40% of the revenue. Here's some numbers to show that it's not just wrong to do, it's also stupid. In order to buy 1,000,000 views on YouTube through standard CPM rates of $8, you need to spend about $8,000-$10,000. If bought enmasse it roughly mirrors a $0.01 per view cost. That $8,000-$10,000, will be reduced by 45% to pay YouTube, and further reduced by 60-70% for the revenue share concept. So Nintendo will bring in somewhere around $1,300-$1,600 in ad revenue from every 1 million views. Just for some rough proportional numbers, let's say monthly Nintendo product views are 1 billion. They would make around 1.3 to 1.6 million in revenue.

    We know that the fear of uploading Nintendo content is reducing the number of videos. Let's just see what a 20% reduction would do. They will bring in 1 to 1.3 million in revenue now, because the views have dropped. But to keep the same exposure, they would need to now buy 200 million views to compensate. Those 200 million views, at $8 CPM, will cost them $1.6 million dollars. They made an optimistic 1.3 million, but are now $300,000 in the hole (every month), all because they decided they wanted a piece of the pie and have to pay YouTube for the privilege of scaring off some of their audience.

    Now, you'll note that my numbers are made up. I don't have any sources other than $8 being a pretty accepted average CPM and 45% being the YouTube cut. But I don't need solid numbers because this kind of proportional math works at all levels to show that all it takes is a 20% drop in video exposure, to make this a stupid idea. If you want to play with the numbers, you'll find that the equilibrium point will occur somewhere around a 15% drop in video exposure (conveniently right around the 16.5% of gross revenue that Nintendo takes with their 30% net revenue share). And by equilibrium, I mean that the revenue generated can precisely pay for the lost views in the form of ads. And none of that takes into account the idea that organic content made by passionate fans is much more well received than advertisements.

    TL;DR In order for Nintendo to come out ahead in profit on this program, they need their total viewership across all of YouTube to drop less than 15% due to channels avoiding Nintendo content. I think this is unlikely.

    And now I think I need to script this into a Feature Creep episode.
    --- Double Post Merged, Feb 5, 2015, Original Post Date: Feb 5, 2015 ---
    I made one error in my post. I didn't account for un-monetized views in the ad revenue generation. So given that 50% monetization rate is a pretty solid guesstimate, it just makes the whole story even worse by cutting the revenue generation in half. This puts the viewership drop equilibrium at about 9%. If they drop 9% viewership, they can break even by purchasing ads with the revenue they take from content creators.
     
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  6. markkaz
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    @Tarmack

    I agree that Nintendo is basically putting themselves in the position to be able to control product reviews. As to if they actually do that or not is to be seen.

    I also agree that YouTube's Content ID system is by default, giving an unfair advantage to those that file claims based on Content ID matches. While not perfect, it is better to err on the side of the intellectual property holder. Creators can counter-claim if they feel they have the right to use the content.

    Which is exactly why I keep my videos on the 'review' side and rarely do entertainment videos using the products. I have made some no-so-subtle comments here at YTTalk in regards to channels using toys. Just because somebody owns the toy doesn't mean that they can use it to create content. I will leave this link as an example

    http://www.businessinsider.com/how-...ts-to-feature-brand-names-in-toy-story-2012-7

    (Yes, I know it is different in that they are drawing the toys but Mattel reportedly wouldn't let Mythbusters use Hot Wheels cars or track for their show. Same argument)

    Your Nintendo argument appears to be based on the perceived value of the views on YouTube. Nintendo may not agree that those views are worth anything. Losing views doesn't necessarily result in lower sales.
     
  7. KatyAdelson
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    I honestly love this Nintendo thing. 60% is a treat since most give nothing. Gamers might hate it, but I love it.. Three-ish years ago, I emailed Nintendo and asked if I could publish a video game music cover on YouTube. They came back with something along the lines of "Thank you for your interest..we take pride in our stuff..We do not have the staff for such inquires, so the answer is 'No.'" Fast-forward to three years, now after sending an almost identical email to them, they came back with a link to their Creators Program. The Nintendo Creators thing is like a breath of fresh air! I can cover anything from Nintendo and send it on over through their site for verification. They can put their ads on it, and I don't get a strike! yay! The weird part is that I need to upload the video to YouTube first before I can even hook it up on their video verifying portal. That seems to go against what their terms say, but I don't see any other way to do it. They don't have an upload button anywhere to view the content before it's put on YouTube.

    I have emailed a few other music publishing companies to see how they deal with YouTube. A few said posting a cover would be fine, but that I cannot monetize it. They would put ads on the video and receive all of the ad revenue. That's fine by me - I just want to play the song! I asked one publishing company about covering an Enya song. They came back saying it would cost $1850 to be renewed EACH YEAR!! (gahh~!) for a synchronization license to have the stupid cover posted on YouTube and have full rights for ad monetizing. I was like.. "Say Wha..?!" I can hire someone to produce my own song for that kind of money...

    Where music covers become a good deal is selling them, not putting them on YouTube. The current royalty rate for selling a cover is paying $0.091 to the publisher for each song less than 5 minutes that is sold. You can legally and easily buy a mechanical license (for CD distribution only..digital downloading is another topic..) for tons of cover songs to sell. I think a mechanical license on Songfile costs around $14.00 - $16.00 to process a license in addition to the $0.091/song royalty fees.

    YouTube is good for getting stuff noticed, so it's a bit of a battle between licenses (mechanical license to sell stuff = easy-peasy; Synchronization license for YouTube = nearly impossible..). They need to invent an easily obtainable and affordable YouTube-broadcast synchronization license, but this doesn't exist yet. The Nintendo Creators Program, and YouTube's ambiguous "agreements" with publishing companies, are the closest I've seen to this, and I hope more publishing companies start a similar program like Nintendo's..
     
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  8. OliverNChalk
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    Nintendo is missing the publicity they get from the videos... Creating this MCN has cost them a lot in game sales and bad publicity. Soon Nintendo will evolve into the new EA :(
     
  9. Invisible
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    Does EA forces youtubers to pay percentage from their EA game videos earnings, like Nintendo? :O
    Havent heard about it yet.
     
  10. Tarmack
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    No, they don't.
     

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