YouTube's Balancing Act: Making Money, Not Enemies

This article written by Fred von Lohmann, attorney with the Electronic Frontier Foundation, examines how YouTube would fare under the copyright law and, in particular, the Digital Millennium Copyright Act (“DMCA”). According to the author, the stakes are tremendous because YouTube’s website hosts infringing copyrighted material but it also facilitates the free flow of information and spawns original and transformative creativity. The author opines that in light of YouTube’s business operations it legally should be shielded by the safe harbor provisions of the DMCA. However, he cautions that YouTube must continue to walk a careful line so as not to run afoul of the safe harbor requirements.

The article examines several of the DMCA’s requirements mandated by Congress. First, the author examines YouTube’s policy in implementing the termination of repeat infringers and the removal of infringing content. He concludes that YouTube’s written policy and implementation meet the DMCA’s requirements concerning termination, as well as notice and take-down. Second, the author finds no obvious pirate sites on YouTube which is an important factor in analyzing the knowledge requirement. Third, in examining the direct financial benefit test, Mr. von Lohmann explains that it represents an important hurdle for service providers. In the case of YouTube, he finds that it has chartered a cautious course by putting advertising only on search result pages rather than on the clip pages themselves. He suggests, however, that YouTube may feel increasing pressure to develop innovative business opportunities other than by limiting the placement of advertising on its website. In that regard, YouTube will have to experiment with different revenue strategies that do not run afoul of the DMCA.

For purposes of my paper, this article provides valuable information on YouTube's business operations. According to the author, YouTube largely complies with the requirements mandated by the DMCA, but the financial benefit test could be problematic for it. In determining whether YouTube should successfully meet the requirements of the DMCA, an examination of YouTube's operations will be critical and this article will be helpful in that regard.

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YouTube's Balancing Act: Making Money, Not Enemies