Monday, April 06, 2015

Nintendo Pending Litigation Over New YouTube adShare Program

As Nintendo's YouTube adShare program is kicking into full swing, a number of gamers are turning to the law to determine if what Nintendo is doing is actually legal.

Here's the issue and how it all breaks down: In 2013 Nintendo began rolling through YouTube and started making copyright claims on videos that contained their content, including Let's Plays from gamers who have received advertising money from the Tube. In doing so, it would allow all ad revenue to go to Nintendo, and not the YouTubers. There was a big enough backlash that Nintendo dropped their claims.

Since then, Nintendo revamped their stance and created a program where people can register with their services and share some of the profit with a 40/60 split of Nintendo/User. That's if Nintendo accepts the channel's application. If it does not, Nintendo can pull all of the ad revenue with nothing being delivered to the user for any Nintendo content posted.

While Nintendo does have a list of games that can not be applied to the adShare (such as Smash and any 3rd party content), they haven't provided a guide on how a channel qualifies for their program. Right now some channels are being approved, while others denied, without a consistent framework.

The other issue YouTuber's have is the dramatic profit share Nintendo wants. With YouTube, it's a 50/50 split on ad revenue. For every dollar, YouTube takes 50 cents. If you are adSharing with Nintendo, your 50 cents has now dropped to 30 cents, with Nintendo taking 20. It may not seem like a lot, but every penny counts, even if you're not of the level of internet fame as PewDiePie.

Hypothetical time! Let's say you made $25,000 ad revenue from a Mario Party 8 Let's Play. Half goes to YouTube, so now you're down to $12,500. If you're on Nintendo's adShare program, take off another $5,000 for their services, and you are now at $7,500 profit. You're making only 30% of the original ad revenue amount. That's nutty.

But can't you ignore Nintendo and not sign up for their program? Nope. As part of the policy, if you have any content that is remotely involved with Nintendo, you have to sign up and have your channel reviewed. Even my channel, which makes 0 money and has no advertising involved, has to go through the process. Why? Because I posted video of my Super Mario RPG half-ass speed run for the Extra Life Charity in 2014.

A number of gamers believe that what Nintendo is doing is not following copyright and fair use laws. They're making money off of the advertisements on the side-bars, not on the games themselves. They believe that they are giving plenty of free advertising for Nintendo, because people can see how much fun it is and buy the game for themselves.

Copyright law will vary from country to country, but most of the Western world has a fairly universal understanding of fair use: fair use does not infringe on copyright if it's used for research, parody, satire, criticism or news reporting.

Movie clips being used in critiques and reviews would fall into this practice, and so would video games.

Nintendo has not responded to requests for details, as they do not comment on pending litigation.But this is setting a precedence on the future of adSharing and YouTube. If Nintendo manages to win it's claim, what's to stop other developers from doing the same. What if EA tagged all of their products with an AdShare program? Well then...Let's Play videos would cease to exist. EA holds A LOT of games. Like, a lot, a lot.


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