As CNet reports today, Hollywood and YouTube may be edging towards their own version of Pax Romana. Meanwhile, beyond the learned walls of the law courts and Google’s battle with Viacom, we here at Social Cache have been scratching our heads over Viacom’s position.

Obviously Viacom is up in arms over what it argues is copyright infringement whenever one of its artists’ songs are used in a user-generated video. Their lawyers are even arguing that in most cases they want to set aside the notion of fair use. That in itself is ridiculous as in a lot of circumstances Viacom has stepped over the edge of copyright boundaries. In 2007 Viacom sent YouTube 100,000 takedown notices! And as this video from the EFF points out, many of those videos that Viacom had asked YouTube to remove, were not infringing anyone’s copyright.

We ourselves received a takedown notice and had a video removed from YouTube. The video was of one of our numerous snowboarding expeditions to Mt Hood and it included a clip of a song by the group White Zombie. We could have argued that under the law if we had used the music for parody, for comment, for criticism, for news reporting or for non-commercial use then we’d be in the clear. In this instance it was the latter - non-commercial use. We couldn’t be bothered, we weren’t that attached to the video and anyway, like millions of other folks, we put up videos at an alarming rate. Here’s our latest.

So here’s the Nemo and Social Cash POV. By removing our video Viacom denied thousands of people the pleasure of hearing a White Zombie song. One of its own artists! And no money was changing hands. One solution - Viacom should provide YouTube with a license from a roster of its artists who agree that their music can be used in a video for non-commercial use. In return YouTube provides its users with a simple license that allows users to add music from these artists to their amateur videos for non-commercial use for a small fee of, perhaps $3.00. Now Viacom and its artists get a share of this revenue, YouTube users won’t receive takedown notices, and Viacom can go a long way to recouping its, no doubt, millions of dollars it is spending on these lawsuits.

You’re welcome. Let me know why it won’t work….

Meanwhile over at MySpace, Rupert Murdoch’s News Corporation has a business that’s built on the backs of thousands of unsigned musicians. Who is looking out for them?

My Online Marketing Presentation About Radiohead from iaintait on Vimeo.

John Mellencamp, free songs via Vanity Fair

Thinking about social advertising and targeted marketing perhaps we should take a leaf out of the book of the rock stars. The biggest story last year in the music world was how Radiohead bucked the recording industry’s distribution and marketing system and gave away their new album. The short story is that they simply told their fans that they could go to a Radiohead web site and pay whatever they liked to download the album, with $0.00 being an acceptable amount. It was an extremely successful campaign - not only did most people pay for the files but the band received unprecedented amounts of positive media coverage around the globe.

Other bands have followed the model not least Trent Reznor and his band Nine Inch Nails. The band released a limited edition 2,500 units of a coffee table book that included multiple CDs and DVDs. It was exquisitely packaged, signed and numbered and cost $300.00. It sold out in two days.

I believe this form of social marketing could serve as a model for companies that have customers who are literally fans of their products. And I don’t mean Apple.

If we think of the bands mentioned above as companies that sell product then we can take a look at what these companies have been doing to increase sales of their product. Here’s what they do online:

01. They have blogs to which actual band members [think executives] post regular updates.
02. They ensure that the blogosphere is alerted to any new and breaking news or important posts.
03. They offer early access to special offers and discounts for their customers loyalty.
04. They give away free samples of their product.
05. They are active in their customers communities.
06. They never push unwanted messages to their customers.
07. They ask their customers to interact directly with their product through competitions.
[Both Radiohead and Nine Inch Nails had remixing competitions where they made tracks available to their fans for that purpose.]
08. They allow sharing of their products amongst a community.
09. They work closely with influencers.
10. They openly discuss their problems with their customers and allow negative comments to remain on their blogs.

Number 11 in my list would include the fact that they have dedicated staff working on this online communication 24/7.

These “companies” also use printed media to their advantage too. John Mellencamp has hooked up with Vanity Fair magazine to get two free song downloads into the hands of his fans. This is a win-win for both parties. Here’s the link if you fancy grabbing the songs.

In an article in the Wall Street Journal today [subscription req.] a report says that YouTube will will fall short of revenue expectations. The twist to this chatter is that Google has found that 80% to 90% of video watchers hate to watch pre-roll advertising and they leave the video the minute they see any hint of a pre-roll. The story goes that Google intends to ignore its own research and go ahead with pre-roll anyway.

And the reason that most pages on YouTube are ad free? Because Google is fearful of showing that it is profiting from copyright infringement. They already in the middle of a copyright infringement lawsuit filed by Viacom. That apparently leaves Google with only 4% of the videos being legally a-ok to advertise around as they have been approved by the copyright owners.

Bottom line for Google and the lawsuit they face, is that it is very unlikely they will receive a ruling in their favor to make money from copyright-violating content. It also will be a barrier to entry for anyone trying to launch a social media advertising program around these big content sites. Even Rupert Murdoch’s News Corporation doesn’t own the copyright to hundreds of thousands of songs on its MySpace site.

It’s not often I come across a major musical artists’ web site and find that I can say to myself - “these guys got it right.” Today I visited John Mayers site and although I’m not a fan of his music the site is a great example of how to get the message across simply and elegantly while giving his fans the ability to interact on many levels. The tie-in with Blackberry is genius too. The Blackberry micro-site just spreads the Meyer messaging and interactivity far and wide by offering exclusive Meyer content - audio, video, pictures and more.

John says “hi.”

John Meyer has a blog and he seems to use it, at least I hope it’s him because the most egregious offense is having someone else blog for you. I’m going to keep checking back on this one. In fact there are multiple blog links on the home page. This one is written by “Scotty” who may be in the band or may be the T-shirt vendor, it’s hard to tell. The blog focuses on the new T-shirts - “A collaboration with Loomstate - a completely organic, sustainable tee. Very limited… We only made 587 of the shirts, each hangtag is hand-numbered.”

And there’s even a place to send in your encore requests for the shows you’ll attend. Customer happy time I reckon. And client happy too, Blackberry made a wise choice sponsoring this musician.

Credit: Mayer web link found on the Mediapost blogs.

The news today is that Proctor and Gamble is getting into the music business. Just as Starbucks is going in the opposite direction and exiting the CD sales business, more brands are jumping in to fill the void left by the collapse of the CD retail store business. Music sales in the UK were once again down 11% over the same period in 2007.

For the labels, attention from product companies is a good thing. I see the logic here. CD sales are plummeting and online sales are not filling the void, a company comes along that wants to license the record label’s music to promote a brand and it appears that a match has been made in heaven. Rhianna had a lot of success this way working with Totes Isotoner to help them improve sales of umbrella’s. Umbrella was the title of her hit song, I wrote about her arrangement with Totes here.

Proctor and Gamble, and other companies using music to promote their brands, are jumping in deeper though:

“At a time when online file-sharing is rampant, record stores are closing and consumers are buying singles instead of albums, getting into the music business might seem like running into a burning building. But as record labels struggle to adjust to a harsh new digital reality, other companies are stepping up their involvement in music, going far beyond standard endorsement contracts and the use of songs in commercials. These companies — like Procter & Gamble, Red Bull and Nike — are stepping outside of their core businesses to promote, finance and even distribute music themselves.”

I believe all of this extra-curricular activity by these brands may pay off for them in the long term. The music fan has shown her willingness to buy music online although only singles, not albums. Album sales are no longer the preferred format. The labels created this nightmare for themselves when they scrapped the single as a sales format. They blamed their losses on file-sharing online but they ignored their own disastrous moves in the market place. They weren’t listening to their customers. And then they began to sue them. Even Apple can’t persuade music fans to buy albums.

There is a lesson here though and it is one that Starbucks learned the hard way. Brand and product companies should not get too deep into the music sales business. The P&G deal with Def Jam may work well as it is a joint venture where presumably each side does what they do best - Def Jam runs the label side, P&G markets its product with Def Jam music and pays for everything.

I discussed the following issue in a recent post: To the music fan music becomes cheapened by being used as a commodity to sell products. The artists behind the music have their celebrity enhanced and they then go on to use their brand to sell more products. Music fans understand that music is now a commodity and refuse to pay for it. The music industry and the artists both complain that no one pays for music and to account for the decline in sales accuse us of stealing it online. The commodity is over-priced; no one is buying it.

Unless you are a brand with a product to sell.