The Economics (and Staggering Legal Mess) of Rebecca Black

The Economics (and Staggering Legal Mess) of Rebecca Black

Adam Clark Estes


Rebecca Black's hideous music video has been appearing and disappearing from the Internet this week as a copyright battle heats up. The video disappeared from YouTube without explanation on Tuesday then reappeared on YouTube with a $2.99 rental fee only to disappear again with a note about copyright infringement on Thursday. On Friday the video reappeared for good on a fake VEVO channel, which people at major news sites took for the real thing.

The copyright battle

The video, in fact, is caught up in the midst of a nasty, three-sided legal tangle between Black's lawyers, Ark Music Factory and a pair of video producers--it's left the 13-year-old starlet standing in the middle with about a million dollars scattered around her feet. YouTube is making strides in generating advertising revenue for those who upload its most popular videos, but the business is still complicated by loose contracts and confused copyright filings. Nobody knows who the money belongs to, but everybody is freaking out about it. It's a little bit like the prisoner's dilemma you learned about in college. Let's explain how.

One side of the tug-of-war triangle belongs to Los Angeles-based producers, Christopher Lowe and Ian Hotchkiss. The Smoking Gun reports that the pair registered the copyright to "Friday" ten days after the song went viral. They also claim to have written the script and played a big part in the video's success. On another side is vanity video shop Ark Music Factory which was paid $2,000 by Black's mother to organize the production. Ark disputes Lowe and Hotkiss's claim and say that their own Patrice Wilson wrote the lyrics. Rebecca Black's camp, the third side, is fighting Ark and the producers over the rights to the song, lyrics and video. But since Rebecca Black is the star, Ark holds a signed contract and the producers possess the only copyright, it's a big mess.

Although "Friday" is commonly regarded as the kind of song that makes you want to jam pencils into your ears, we sort of feel sorry for Rebecca Black. Half a decade away from being able to vote, she now finds herself the center of a business governed by a hazy set of intellectual property laws. As the 13-year-old said herself on Twitter, "Thanks for all the messages regarding the $2.99 fee added to Friday video, I have NOTHING to do with this!!"

The money estimates

So how much money are they fighting over? The video has three main streams of revenue: YouTube ads, song downloads and any extraneous fees Black earns for her newfound fame. Around the time of the March letter, Forbes crunched some numbers and declared Black a millionaire. Slate's Annie Lowrey rightly argued that Forbes overestimated the number of music downloads by about a million and that Black had earned a low six-figures amount. These reports surfaced only about ten days after the video was released on March 14. Not bad.

To update the numbers, let's start with YouTube. YouTube earns roughly $1 per thousand views by hosting advertisements, which would have amounted to $30,000 for the 30 million views "Friday" had at the end of March. YouTube pays the content creator about 68% of that total ad revenue figure, meaning "Friday" would have earned about $20,000. Fast forward to mid-June and the views on topped 167 million, or roughly five and half times the number of March views. Multiplied by the March figure, that equals $115,000 earned on YouTube.

Now, for record sales. According to Billboard, fans downloaded 87,000 copies of "Friday" between the release and the end of March. Citing Nielsen numbers, industry blog Digital Music News reports 158,501 downloads of "Friday" sold by April 15. Digital Music News estimates 61 cents go back to the artist for each sale, so that comes to about $200,000. Depending on how sales have held up in the last two months, you could probably double that.

Add to that any promotional appearances, television licensing fees and maybe a nice check cut for Black's cameo in Katy Perry's spoofy homage video, and the amount of money earned by the Black-Ark collaboration is probably mid to high six-figures. They're now fighting over that as well as any future earnings Black might reap from her rumored acoustic album and inevitable tour. And it's not like people don't believe in Black's future. Music mogul Simon Cowell called Rebecca Black a genius, and as all of the American Idol breakout stars have proven, if you can win over Simon, you can win over the world.

How to solve this

In a simplified scenario, the prisoner's dilemma suggests that cooperation pays smaller dividends, but it pays dependable dividends. Any of the three parties tugging for the lion's share of wealth produced by what we can only assume is their collective effort will really annoy fans, hindering Rebecca Black's future popularity. Black's lawyers ought not make the girl look greedy, because that wholesome, do-it-yourself YouTube angle doesn't mix well with greed. Ark Music can't really fight too hard to hold onto their flimsy-sounding contract because then nobody in the business will ever work with them again. And those producers, whose video was actually decently produced, they probably can't stand up to Black's lawyers or Ark's.

So here's a solution. How about Rebecca Black gets to have her career. Ark takes the money for download sales of the song they allegedly wrote and recorded. Then that leaves the YouTube revenue to the producers. Sure everybody wins a little bit less. But everybody wins.