Sep 16, 2013 · 2 minutes

Copyright on YouTube is a mess.

For years, artists have used a technology called ContentID to claim copyright on YouTube. With ContentID, rights holders send raw files and metadata connected to their work to YouTube, then YouTube can detect whether their work has been used in other people's videos without permission. At that point, rights owners can either do nothing, ask that the video be taken down, or they can collect ad dollars against it. That's how Baauer's "Harlem Shake" was able to bring in a good chunk of revenue from thousands of fan-made videos.

But ContentID often fails both rights holders and users. The system will sometimes alert a rights holder that their song has been used without authorization, when in fact the uploader is properly licensed to use it. ContentID also leaves room for abuse and general trollery. Brent McCrossen, CEO of the New Orleans-based music licensing company Audiosocket, told me about an individual who claimed to YouTube that he owned the rights to iLife's library of royalty-free songs, then used ContentID to make money off of them.

Fed up with the current state of copyright on YouTube, McCrossen commissioned one of his engineers to build a better licensing tool. After two weeks, the engineer delivered a solution: LicenseID.

"ContentID only identifies the song, not the license," McCrossen says. But with LicenseID, rights holders can provide granular information about the nature and conditions of a license to avoid confusion and abuse down the line. For example, if a rock band licenses their song to be used in a Web-based Pepsi campaign, the band can tell YouTube, "Pepsi is authorized to use this song for the next 24 months in this specific video ad." Then when Pepsi uploads the song, it too includes the data for that license. Meanwhile, the band might have a completely different license for, say, Volkswagen, who can use the song for 18 months but in as many ads as they want.

Audiosocket makes money by entering licensing agreements with rights owners then taking a cut from the ad revenue they earn. But the owner or artist retains all of the rights, a growing trend that helps artists keep a greater share of whatever royalties and ad dollars they can scrape up on the Internet. "Our tools help artists grow their career without giving up their rights," McCrossen, a musician and ex-manager, says. "I've been an artist manager and I've seen record labels strike deals with artists where they tie up their rights, so artists pass up all kinds of opportunities because they had to give up so much to get so little."

In addition to helping artists and rights owners, tools like LicenseID may help build more consistent practices for multi-channel networks (MCNs) like Full Screen, who last month was sued by the National Music Publisher's Association over using unlicensed cover songs. By making it easy to license a song before uploading, it will hopefully become a more standard practice.

That would make YouTube a less wild and wooly place, but it would also lead more ad revenue for artists. Plus, it beats getting slapped with a lawsuit.