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Rant #294
(published September 7, 2006)
Your Data Is Fungible
by David Erik Nelson
If you're any sort of fan of online video—and, in these heady Web 2.0 days, who isn't?—then you probably got at least a whiff of this summer's blogosphere foofaraw concerning refinements in the fine print on the Terms of Use of both YouTube and GoogleVideo (the two most popular video hosting services.) A less hysterical examination of the actual Terms showed this to be something of a tempest in a tea pot—although the Terms do indicate that a video submitter grants a free license for the work to the hosting service, the submitter does still retain ownership of all rights to her work—but this minor squall does raise an interesting point in the online barter-of-ideas, and that is one of fungibility.

To briefly review the imbroglio: On or around July 20, there was a sudden blogosphere-wide realization that YouTube's Terms of Use included the following seemingly odious (and certainly ineloquent) passage:

By submitting the User Submissions to YouTube, you hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the User Submissions in connection with the YouTube Website and YouTube's (and its successor's) business, including without limitation for promoting and redistributing part or all of the YouTube Website (and derivative works thereof) in any media formats and through any media channels.

It took the sharper denizens of the web (boingboing community members largely being credited with the sleuthing) little time to note that this seeming claim of all rights to your funny cat videos shared via YouTube is preceded by the bold text

For clarity, you retain all of your ownership rights in your User Submissions

and followed by the indication that you accept their license by uploading, and can decline the terms at any point in the future by deleting your posted video content. ("The foregoing license granted by you terminates once you remove or delete a User Submission from the YouTube Website.")

(GoogleVideo's Terms of Use includes a similar copyright clarification, although their's is buried in their FAQ, as opposed to being buried in the fine print.)

More refined legal minds further quip that, since by uploading a video your intent is for YouTube to reproduce, distribute, display, and perform the piece—that is why you uploaded it to begin with—much of the legal language in the Terms is just a traditional cover-your-ass measure on the part of YouTube. Clearly "prepare derivative works" is trickier, and the fact that the license is "sublicenseable and transferable" by YouTube or its "successor's business" could mean that your hilarious cat video might ultimately wind up being the next Volkswagen ad. But, unless Volkswagen happened to purchase YouTube, then they'd still need to separately negotiate with you in order to obtain the rights to the funny cat video in question. Remember, you do retain the copyright, after all. In fact, what YouTube and GoogleVideo might mean in claiming such a wide-reaching and transferable license without purchasing any discrete rights is somewhat cryptic, and likely to wind up being a matter for the courts to puzzle out sooner than later.

The traditional rational invoked in these situations, when a free service ends up having an odious Terms of Service, goes as follows: "Yeah, by uploading your video you grant a free license to YouTube, but you are getting something out of the deal: Free video hosting."

And here we stumble into the interestingly unexamined Elephant in the Room: If Alice gives Bob something for free only on the condition that Bob gives her something for free in return, that isn't called "giving", it's called a "trade." Giving YouTube the license "for free" would mean that Alice might or might not expect YouTube to post the video, although she'd be fine with them keeping the license regardless of what they chose to do. Further, if the video hosting was "free," then Alice would be welcome to use their service and refuse their Terms, or at least that clause, which she is not.

If this is an exchange rather than a gift, what's being traded? As outlined in the Terms of Use, a poster is granting a transferable and wide-reaching license. What is YouTube putting up? Video hosting is not a negligible task: Five minutes of video can easily exceed 20 megabytes. While in these days of cheap hard-drives that hardly seems like much, bear in mind that for most web users 20 MBs is far in excess of what they can attach to an e-mail, and consumer-grade web-hosting packages tend to limit you to a paltry 50 or 100 MBs of storage. Even with a high-end .mac account, a weekly vidcast will break the bank in less than a year (or, if you're ZeFrank with his daily "The Show," you'll be out of space in less than 2 months.)

But this doesn't even touch on the real expense of publishing via the Internet , and that's bandwidth. Even if you only have a single funny cat video posted, thus only taking up one-fifth of your hard-drive allotment, every time that video is downloaded, you are transferring 20 MBs of data. If someone should chat up your genius on a moderately well populated forum or popular MySpace page, a single flurried day of popularity could easily exceed your monthly bandwidth allotment—a limit that few users ever think about until they've been smacked with a hefty penalty fee by their provider, or had their site knocked off line.

Unless someone has either fairly deep pockets, fairly advanced technical skills, or fairly good connections to someone with either of the former, then regular vidcasting is not really a possibility without the services of a provider like YouTube—who, judging from their meteoric popularity, are certainly filling a niche.

So the terms of the exchange are finally clear: The submitter is offering a broad, transferable license to her creations, and YouTube is offering server space, a fat connection to the Internet, technical services maintaining these, and a pretty slick conversion of video into easily transferable, universally viewable Flash files in a nifty, embeddable player popular with the Kids of MySpace, forum mavens, bloggers, and other Web 2.0 kingmakers.

By accepting anyone's video on the same terms, YouTube is intrinsically saying that all bits are of equal value. As far as YouTube is concerned, anyone who shows up with a video file and is willing to agree to their terms can exchange a "worldwide, non-exclusive, royalty-free, sublicenseable and transferable license" to that work for valuable server space and network bandwidth.

When you have a good like this—one for which it is accepted that a given sample is as good as any other sample—that good is said to be fungible. Money is fungible—that is the whole point of money: One penny is as good as any other, regardless of its "quality" (dirty copper spends just as easily as newly-minted little Lincolns) or who is handing it over (my money is just as good as Charlie Manson's or M. Night Shyamalan's.)

Video licenses are the pennies you use to pay for YouTube's valuable hard-drive space and bandwidth.A brief visit to YouTube shows this penny analogy to be painfully accurate in a second regard: Most of our individual little videos are themselves of little value, although amassing enough of them can prove to be quite a fortune. YouTube's motivation is clear.

Despite the penny-ante quality of the exchange, this is still an interesting development because it gives us a hint of the Economy-to-Come. In Old Media situations, the consumer pays for the cost of distribution: If I want the music, I have to pay for the shiny disc used to transport it from the studios to my ear. In the universe of Web 2.0—which is the Internet as characterized by all the participants being both content producers and content consumers—it is the creator who is paying for distribution by swapping licenses in exchange for server space, network bandwidth and technical support.

In addition to this Web 2.0 economy being cashless, it will also be distributed: I will pay for access to content created by others not by paying them directly, or even by defraying their costs, but by bolstering up the entire structure by creating my own content and sharing it—which will mean engaging in similar trades with distributors like YouTube.

Of course, we already have a model for this, where you pay for a good not by monetary exchange but by participating in a manner that bolsters the entire system; we call it a "potluck supper."

Is there room in this new system for the likes of News Corp and Warner Pictures? Frankly, I don't know; I don't have cable, can't pick up broadcast TV in my home, and don't bother with going out to the movies much anymore. Besides, I have a casserole in the oven and a whole slew of funny cat videos waiting for me online.

It's a brave new potluck world, and it won't cost you a penny.

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