Want to earn $23 million while doing nothing? YouTube is creating opportunities for scammers to make huge sums of money with almost no effort at all. These scammers just need to claim copyright for music clips uploaded by others on YouTube and then leisurely collect royalties from them.
Essentially, that’s all that two individuals from Phoenix did to swindle millions of dollars in royalties from Latin music artists like Daddy Yankee and Julio Iglesias. The details of the case were reported by Billboard last week.
The largest royalty fraud in YouTube’s history
According to Kristin Robinson from Billboard, Jose “Chenel” Medina Teran and Webster Batista co-founded a media company called MediaMuv and claimed ownership of various songs and Latin music works. From 2017 until now—when Teran and Batista began their scam—MediaMuv claimed ownership of over 50,000 different works, totaling up to $23 million.
In order for MediaMuv to openly claim ownership and collect money from these clips through YouTube’s Content ID system, these scammers collaborated with AdRev, a third-party company that can access YouTube’s CMS (Content Management System) and Content ID tools and assist artists in managing their digital rights.
MediaMuv created fake documents to provide to AdRev to prove their ownership of the musical works. As a result, AdRev not only helped MediaMuv collect royalties from these clips but also allowed Teran and Batista direct access to YouTube’s CMS tools so they could claim ownership of other works themselves.
This four-year-long royalty theft was only uncovered and ended late last year thanks to an investigation by the IRS. According to Billboard, the two were charged with “30 counts of conspiracy to commit fraud, electronic fraud, money laundering, and serious identity theft.” While Teran did not plead guilty, Batista admitted to phone fraud and one count of conspiracy to commit fraud. It was Batista who revealed how the duo’s scam worked.
According to Billboard, Teran and Batista’s scam is considered one of the “largest YouTube royalty scams in history.”
The loophole in YouTube’s copyright management system
Although the scale and method of this scam are unprecedented, it also highlights a danger that many YouTube content creators have faced for years. YouTube’s Content ID system—originally established to assist content creators—is being exploited by scammers to profit from content that is not theirs.
While many cases are merely false alerts caused by the automated system, MediaMuv’s case is a perfect example of how scammers are taking advantage of loopholes in YouTube’s copyright regulations to profit and cause harm to content creators.
YouTube is well aware of the power of CMS and Content ID tools, which is why they severely restrict external access to this tool. But this very limitation prevents independent creators and artists from verifying whether false copyright claims are true or false, as well as defending against such fraudulent claims. They need to do this through a rights management company to gain that access.
Yet, it seems that scammers are also well aware of this and do the same. They can forge documents to gain access to YouTube’s tools through third parties—trusted by YouTube to grant access.
While content creators have almost no tools to protect their works, look at the incredible length of MediaMuv’s scam. It’s highly likely that beyond MediaMuv, there are still many other careful scammers who are still swindling money from artists worldwide without being detected.
Source: Mashable