The YouTube effect: I

Maybe this is old news to many...but I've wondered lately how YouTube escaped the fate of a Napster...this Slate article explains lucidly how...

Facing stalemate, in 1997 the industries settled on a compromise: something called the Online Copyright Liability Limitation Act, which became Title II of the Digital Millennium Copyright Act of 1998 (§512 of the Copyright Code). It is this law that makes YouTube worth paying more than what you pay for its videos. And its long-term effects have been enormous—you might call §512 the Magna Carta for Web 2.0.

Why? Section 512(c) of the law applies to "Information Residing on Systems or Networks At Direction of Users." In 1998, that meant Geocities and AOL user pages. But in 2006, that means Blogger, Wikipedia, Flickr, Facebook, MySpace, and, yes, YouTube—all the companies whose shtick is "user-generated content."

Thanks to the Bells, all these companies are now protected by a "notice and take down" system when they host user content. That means that if Jon Stewart notices an infringing copy of The Daily Show on YouTube, Comedy Central can write a letter to YouTube and demand it be taken down. Then, so long as YouTube acts "expeditiously" and so long as YouTube wasn't already aware that the material was there, YouTube is in the clear. In legal jargon, YouTube is in a "safe harbor." Earlier this week, when YouTube took down 30,000 files after requests from a Japanese authors' group, that was §512(c) in action.
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Stated otherwise, much of the copyrighted material on YouTube is in a legal category that is new to our age. It's not "fair use," the famous right to use works despite technical infringement, for reasons of public policy. Instead, it's in the growing category of "tolerated use"—use that is technically illegal, but tolerated by the owner because he wants the publicity. If that sounds as weird as "don't ask, don't tell," you're getting the idea. The industry is deeply conflicted about mild forms of piracy—trapped somewhere between its pathological hatred of "pirates" and its lust for the buzz piracy can build.

But what about Mark Cuban's copyright argument? Why isn't YouTube in trouble in the same way Napster and Grokster were? The first difference, as indicated, is that Napster simply wasn't covered by the §512 safe-harbor law, and YouTube is. Napster wasn't "hosting" information at the direction of its users, but rather providing a tool for users to find and download predominantly infringing content. It may sound odd that Napster gets in more trouble for helping you find illegal stuff than YouTube does for actually hosting it. But that's the law and why YouTube should really, really thank its friends at Bell.

There may also be deeper differences. If the Internet were not a bookstore, or tubes, but rather a red-light district, YouTube would best be imagined as the hotel, and Napster, well, the pimp. YouTube, like a hotel, provides space for people to do things, legal or not. It's not doing anything illegal itself, but its visitors may be. But Napster, everyone more or less now admits, was cast as the pimp: It was mainly a means of getting illegal stuff. Right or wrong, we seem to accept the benign vision of YouTube as an entity which, unlike Napster, was basically born as a place to showcase stupid human tricks.
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