UGC Exception: For the Love of Amateur and the Profit of Everyone Else

UGC Exception: For the Love of Amateur and the Profit of Everyone Else

Creating YouTube videos incorporating copyright protected works is a commonplace, often amateur pursuit of today's tech-savvy cultural 'consumers' and no one is making money off of it, right?... Wrong!

True, Canada's recently enacted exception for 'Non-commercial User-Generated Content' (section 29.21(1)(a) of the Copyright Act) allows dissemination of derivative works yet admonishes that:

[T]he use of, or the authorization to disseminate, the new work or other subject-matter is done solely for non-commercial purposes.

However, as Teresa Scassa notes in her chapter “Acknowledging Copyright’s Illegitimate Offspring: User-Generated Content and Canadian Copyright Law” in The Copyright Pentalogy: How the Supreme Court of Canada Shook the Foundations of Canadian Copyright Law, section 29.21(1)(a) does not stop disseminators from capitalizing on the creative output by fans.

Furthermore, according to the recent annual release by the International Federation of the Phonographic Industry (IFPI) of their Digital Music Report 2014, UGC fan music videos are generating more money for the copyright owning recording industry than official music videos.[1] This can in part be explained by the increased interest in the works by growth of the fan base not as passive consumers but rather by actively engaging with the copyright protected works. Allowing the audience to feel as though they can contribute by participating in the creative process is a powerful tool that a few large industries have only recently caught on to. Moreover, the more popular a work (even a derivative one) becomes, either via pay-per-click or page views, the more income generating ad revenue is earned. More ads viewed equates to greater revenue for the advertisers and hence greater justification for those companies to want to continue to purchase more online ad space on the intermediary’s website. Some intermediaries that have become known for their vast dissemination of UGC works have established these profit sharing incentives regarding works that bring in a lot of internet traffic, especially for those that go viral.

According to the IFPI report “YouTube is the biggest single access point to music for consumers internationally, with one billion users worldwide”.[2] On YouTube, Google searches for videos which incorporate copyright protected songs. They then inform the record companies of this video. But, rather than US takedown notices interfering with the rights of UGC creators, copyright owners of pre-existing works find that it is more advantageous and profitable to get a piece of the action by monetizing the work. The record companies, instead of trying to have the videos taken down, appear to be licensing the video and then making “ad dollars” from the number of views. It is from this process that record companies are making more money from the UGC than the official music record. In so doing, copyright owners likely do not feel as threatened by the popularization of any derivatives from their works while UGC creators are kept from contravening subsection 29.21(1)(a) of the Copyright Act or having to argue fair dealing/use.

There is a pragmatic realization that demonizing and increasing restrictiveness of copyright law against users who appropriate the works of others, be it solely for enjoyment of the work or to make use of it in a UGC context, can have negative consequences for all parties concerned; less content gets distributed among the public (which has negative societal effects) and there is less respect for the legitimacy of copyright holders leading to even more appropriation which cannot realistically be stopped.

Furthermore, the popularity that comes from fandom and UGC communities also informs the larger consuming public of what original content is trending among fellow community members and can act as advertising for the copyright owner.

It appears that this symbiotic relationship between users who want to express themselves personally and the copyright owners (and intermediaries who stand to gain from providing a forum in which users may have access to the fresh or at least alternative perspectives that UGC has to offer) promotes the purported purpose of copyright - to incentivize creativity.

While this can be a positive business model, benefiting all parties concerned, I would like to note a concern which arises. The Copyright Act legislatively permits, as part of a recognized greater social good, UGC creators to appropriate and use works of others in whole or in part when making solely non-commercial derivative works. Although some may describe these UGC creators as “amateur” in a pejorative way, in many cases these amateurs, while consuming society’s cultural works, produce high quality mash-ups, remixes and a host of other derivative works, copyrightable in their own right but typically not greeted with the respectable title of “author”. However, when a UGC work is being uploaded, the uploader agrees to the non-negotiable click-wrap contract (which stipulates that unless they own all elements with the work being uploaded the uploader is not entitled to enable revenue-generating ads). Should this necessarily give the copyright owner of the existing work the right to muscle-in or impose their influence by obstructing the viewers’ ability to fully enjoy the presentation of the UGC work without attention-distracting ads in or around the work? Furthermore, if the UGC generates huge hits, benefiting the host site and advertisers, it raises the question as to whether the UGC creator should be expected to forego any such benefits in order to avoid the risk of liability. I realize that the current system is a licence-based economic model contractually formulated to support the dissemination of UGC derivative works which may otherwise be taken down, and thus is arguably still a better alternative. However, in utilizing this business model, there should still be respect of the UGC work and its author when placing any ads. The Online Etymology Dictionary defines “amateur” as:

amateur (n.) 1784, "one who has a taste for (something)," from French amateur "lover of," from Latin amatorem (nominative amator) "lover," agent noun from amatus, past participle of amare "to love". Meaning "dabbler" (as opposed to professional) is from 1786.

If we consider it from its origins, doing something for the love of doing it would be a seemingly appropriate context for the rationale of the UGC exception. On the other hand, would it be fair to deny amateur creators the ability to gain any profit from the skill and judgment of their original (albeit derivative) work while permitting others to free ride on the commercial value of their works? This goes to whether Parliament’s restrictively phrased ‘solely non-commercial’ is appropriate in light of the way users actually engage with works and whether an appropriate balance of interests is achieved.

Eliot Kalmanson is a JD candidate at Osgoode Hall Law School and is enrolled in Professor Carys Craig’s “Copyright in the Digital Age” class. As part of the course requirements, students were given the option of writing a legal blog on a topic of their choice.


[1] See page 20.

[2] Ibid.