A host of online video creators, particularly those in the hugely popular video-game community, have been left reeling after changes to the way YouTube parent Google Inc. and multichannel networks handle copyright infringement claims. Many are wondering whether there’s any value in signing a contract with a large multichannel network at all.

It might be baffling to some that millions of people log in daily to watch others play – and comment on – video games, but log in they do, and advertisers have jumped on the opportunity to reach the predominantly young, male audience that likes watching game-play videos.

Machinima, a West Hollywood network that focuses on video-game content, boasts 2 billion monthly video views across its network. And Felix Kjellberg, a comedic video-game reviewer who goes by the moniker PewDiePie, is YouTube’s biggest star – a 10-minute clip he posted three months ago has had more than 19 million views. Kjellberg is contracted with Culver City’s Maker Studios and reportedly earns a whopping $4 million a year from ad revenue.

The rub is that those ads are sold against images of games in which YouTubers almost never hold the copyright and many feature music with licenses held by another party. And the law is beginning to shift against creators using that content without permission.

“Case law is moving to greater copyright protection for video games,” said Erik Syverson, an intellectual property attorney at Raines Feldman in Beverly Hills, who said video-game copyright litigation is a booming practice for his firm. The landscape is still in flux, and Syverson acknowledged that many creators could argue their videos fall under the fair-use doctrine since there are still gray areas when it comes to the gaming space.

On their own

In the past, multichannel networks, or MCNs, were not subjected to infringement claims submitted through YouTube Inc.’s automated Content ID system, which helps copyright holders find and remove allegedly infringing content from the platform.

But late last year, YouTube, in conjunction with MCNs, extended Content ID to MCN creators and enacted a new system in which the vast majority of creators were designated as “affiliates,” meaning they had to start handling copyright disputes themselves.

In most cases when a claim is filed through Content ID, all monetization from a video is immediately directed toward the person or entity submitting the claim. If there’s a dispute, no one makes money until it’s resolved. Creators can only resume making money from the video in question if they successfully challenge the claim.

Multichannel network heavyweights such as Maker and Machinima now have the ability to designate some channels as “managed,” allowing the networks to handle any copyright issues that come up for an individual creator. That designation has typically been reserved for the company’s must lucrative stars, such as PewDiePie, who represent a small fraction of all the creators under contract.

Some creators still see advantages in an MCN, as they also receive cross-promotion on other channels, tech support, ad sales departments and merchandising opportunities. But one disagrees.

“Basically, that’s the only reason to join,” said a gaming video creator named Jason who goes by “Jester814” on YouTube. Jason declined to disclose his last name.

A 32-year-old disabled veteran who lives in Greenville, N.C., Jason started making videos of himself playing video games and posting them on YouTube about two years ago. MCNs typically give creators anywhere between 50 percent and 80 percent of ad revenue, depending on the network and individual contract, and Jason said video ad money is his primary source of income, though he also earns disability benefits from the Department of Veterans Affairs.

Earlier this year, he struck a deal with Union for Gamers, a network operated by Curse Inc. of Huntsville, Ala., to carry his game play. Curse gives each of its contracted creators a 90 percent cut of ad revenue, and the network offered Jason managed partner status so he would not have to defend copyright claims on his own.

The deal with Curse is a marked change from the relationship he had until earlier this year with RPM Network, a division of Maker.

Jason mostly records himself playing games in the “Arma” franchise created by Czech developer Bohemia Interactive, which granted him permission in July 2012 to use its games in his videos. Nevertheless, Jason said before signing up with Curse he received 30 or 40 of the automated copyright notices after the Google policy change in December. Unsure why the claims were generated, he nevertheless had to dispute them on his own despite his agreement with Bohemia – a process that he said took “anywhere from two weeks to two months.”

Jason argued that if MCNs are going to pass the burden of dealing with infringement claims to affiliates, then those creators should get a bigger slice of the revenue pie.

“They were still taking the same amount of money,” he said, “but no longer offering that Content ID protection, which as far as I could tell upset most people.”

Representatives of Maker and Machinima did not respond to requests for comment.

Google’s response

Google issued a statement regarding its Content ID system in mid-March that was sent to YouTube creators.

The company said it tried to stop bogus claims by more aggressively investigating abuse of the Content ID system and working with rights holders “to ensure that they’re claiming only what they intend to through Content ID.”

Google also created an online troubleshooting portal to assist creators in the dispute process and a fast-track system for MCNs to deal with claims they know to be erroneous.

“Misuse of Content ID is extremely rare, but when it does happen we take it very seriously and investigate every claim,” its statement said.

But video creators relying on fair use could still find themselves facing notices.

Brian Fitzgerald, a former intellectual property attorney who is co-founder and president of Web publisher Evolve Media in Ladera Heights, said that YouTube creators such as Jason, who haven’t established the viewership numbers of top talent at multichannel networks such as Maker and Machinima, have essentially become dead in the water at those networks since they don’t meet the managed partner criteria and could face more copyright claims.

“If I’m now at risk of all the revenue being siphoned away,” Fitzgerald said, “then the (MCN) provides little to no value to me.”

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