Double Agency: "Monetizing" Illegal Content

by Jordan Yerman | September 19, 2008 at 05:45 am

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It's interesting that Youtube seems to be playing for both teams here: on one hand, doing nothing to discourage the uploading of copyrighted material by non-copyright-holders, and, on the other hand, hosting tools that punish those same uploaders.

The next time you try to upload a video to YouTube that isn't supposed to be there, you may find it being monetized by the original content owner. That's because YouTube has recently partnered up with Nexicon, a company that acts as the middleman between content monitoring and copyright owners, enabling them to either send out automated takedown notices or monetize the unauthorized streams. And this new service isn't likely to stop at YouTube, as the company plans to launch a similar one that will sort through numerous P2P networks for copyrighted content in order to send bills to those users. Best of all, Nexicon wants to patent the entire system.

As part of its announcement, Nexicon said that it would begin using YouTube's "video identification technology" in order to claim and monetize content on the site.

How this content is getting "monetized" is not entirely clear, though it may have someting to do with Nexicon's Get Amnesty product, a credit-card-driven out-of-court-settlement tool.

The GetAmnesty program is a combination of both enforcement activities and efforts to turn infringers into paying “customers”. It tracks down copyright infringers by using a wide variety of methods. But, instead of sending out the regular infringement notices, they now include links for people to get amnesty. Basically they are asking to pay them an X amount of money, and they promise drop everything and go away.

Remember, though, these tools can only track a user as far as an IP address... and IP addresses are locations, not people. This is a very important distinction, since every computer on a wireless network shows the same IP address.

I’m not sure how we’re supposed to call this.. extortion? Intimidation? They are clearly trying to scare people into giving their money to the copyright holders without clear evidence.

Meanwhile, Nexicon itself has a somewhat shady reputation:

Nexicon, a publicly traded company formerly operating under the name Cyco.net, missed a couple SEC filing deadlines, and it was delisted from the Bulletin Board for close to two years while the company "built the business." (It's now traded on Pink Sheets.)

It ditched the cigarette business (sold it to an American Indian tribe) and at one point wanted to be some sort of web portal, according to one report.

It changed its name in 2005 after acquiring a couple technology companies -- Orion Security and Pluto Communications -- in stock swaps. The Orion purchase piqued the interest of the SEC, which questioned how the company could have done the deal with stock it didn't have.