OCR FAQ: Ads, revenue, licensing, and content.

[zircon]

The purpose of this thread is to give people a clear idea of how OCR operates, how revenue is generated (and where that revenue goes), and the relationship between OCR, its operations, and the people that contribute to it.

Is content on OCR licensed?

No. We do not license the ReMixes distributed on our site (and through channels like YouTube). (There is one exception, which is described below.)

Why aren't the remixes licensed?

It's simply impossible to do this for several reasons.

1. Mechanical licensing via the compulsory licensing permission (the one that does not require publisher permission) requires that the source material be published commercially in the United States prior to licensing. Many remixes on the site are of source material never released in soundtrack form in the US, therefore they cannot be licensed.

2. Even if the music could be licensed, since OCR is founded on the concept of distributing music for free, it would be impossible to support the massive licensing costs necessary for all remixes on the site. To use some napkin math: assume 3400 remixes are each downloaded 100 times per month, which is a gross under-estimate. At 9.1 cents per copy downloaded, this would require licensing fees of over $30,000 a month - for downloads alone.

3. No established license mechanism could cover free downloads of MP3s and ad-supported streaming. Compulsory mechanical licensing only covers downloadable copies; as a result, custom licensing agreements would need to be made with every publisher (which they could simply reject, unlike a compulsory license.)

For total emphasis, there is no conceivable way that the content on OCR could be licensed, and especially not while remaining compatible with the site goal of distributing free music.

Does that mean OCR is illegal or infringing copyright?

By default, any use of copyrighted material without express permission of the copyright holder is considered infringement. However, US copyright law makes provisions for "fair use" of copyrighted material as a defense to infringement in a court of law. Fair use is the legal principle that allows for things like educational usage, commentary, parody, and satire, among other uses. While fair use cannot be established except in a court of law, and there are no strict guidelines allowing anyone to decide whether a use is fair or not outside of the court system, it's possible to make an educated guess as to whether a use is fair or not.

This educated guess is based on an evaluation of the factors evaluated for determining fair use, and precedent. The biggest of these factors are whether a work is transformative, and whether it is 'commercial'. These are both loose and nebulous terms, but that being said, our strongly-held belief (reinforced by the belief of consulted legal counsel) is that OCR's distribution of fan-created arrangements for non-commercial educational purposes is fair use. This has been discussed at length in other posts but suffice it to say that when analyzing all these factors, we've made a very strong case for this if a court case were ever to happen.

Isn't it worse to upload music to YouTube, especially if it's monetized?

No. If fair use applies to OCR's activities, it would certainly extend to YouTube. If it doesn't apply, then the site's current activities (on and off YouTube) would be considered infringement, in which case it's a moot point.

YouTube is actually a better place to address issues of infringement than elsewhere, because Google provides content creators with several tools: the ability to claim a video (which grants the publisher/claimaint all further revenue from the video) or issue a takedown. Both of these would not entangle either party in the court system, as Google/YouTube mediates any disputes, avoiding a costly legal battle. In short, we'd much rather defend ourselves to YouTube, ON YouTube, with the assistance of YouTube specialists who have extensive experience in copyright disputes.

Also, keep in mind that on YouTube (and off), a creator can claim infringement regardless of whether someone is generating revenue from a work or not. My own personal experience with YouTube claims and takedowns has exclusively been with un-monetized videos. In short, if a publisher took issue with OCR, not running YouTube ads would not protect us in any way.

Does OCR generate revenue from its content?

Yes. Since the early 2000s, ocremix.org has run ads throughout the site. Other revenue is generated from sales of OCR merchandise (not music; music on the site is not sold commercially) such as t-shirts and hoodies. Within the last few years, OCR launched a Patreon page which also generates revenue. Ads were also enabled on <1% of videos on OCR's YouTube channel from June-August 2016 for testing purposes, which has also generated a small amount of revenue. Until OCR officially becomes a registered non-profit organization, and YouTube ads are discussed further with the community, YouTube ads will only be served on the videos of ReMixers who have given OCR their explicit permission.

Why does OCR need to generate revenue?

OCR as a website has technical costs, such as the cost of a dedicated server, mirrors, and bandwidth. These expenses are necessary for the basic operation of the site. Revenue is also needed to create promotional materials for the site: that includes merchandise like t-shirts and hoodies, as well as strictly-promotional physical copies of album projects. (These promotional physical albums are not sold, and the content on them is available for free on ocremix.org. They are given away at conventions). OCR has also been attending conventions such as Otakon, MAGFest, and PAX (among any others) to evangelize video game music, promote recent album releases, and give away free stuff. Expenses directly related to OCR panels at these conventions (such as technical equipment needed for panels) are sometimes covered by OCR as an organization.

There are also many plans for the organization that require revenue to achieve. For example, the OCR YouTube video template has not been updated in many years and looks dated. We're in the process of commissioning custom visualization software to produce better-looking videos strictly for the enjoyment of viewers and fans. Also, we're looking to obtain true non-profit organization status, which we believe will take a substantial amount of money to file and maintain properly.

Where does surplus revenue go?

For a long time, there was no surplus revenue. Expenses were often paid out of pocket by Dave and other staff. Now that revenue is exceeding expenses, the revenue... isn't going anywhere. It's staying in OCR's accounts until it is used for purposes like those described above. The aforementioned non-profit filing process will likely take most if not all saved money.

So is OCR a non-profit organization?

From our submission agreement: OCR legally cannot distribute submitted materials for for-profit endeavors. Furthermore, OCR is legally bound to spend any revenue on costs directly associated with operation and promotion of OverClocked ReMix.

However, OCR as an entity does not have true non-profit status - 501(c)(3) - which is why achieving that official status is a major goal.

Are any ReMixers or site staff paid for their work?

No. Nobody has been paid for their work contributing to the site either as a remixer, staff member, or administrator, djp included.

(Fine print: OCR has released one commercial album, For Everlasting Peace: 25 Years of Mega Man, as an officially licensed release in partnership with Capcom, with Capcom retaining ownership of the music. ReMixers were paid for this release, which was licensed directly with the publisher. This music is not available on the site and was not submitted through the normal channels, so it's an outlier.)

Will ReMixers ever be paid?

Not for regular submissions to the site, which are distributed for free. Not only would the logistical overhead be unmanageable, but it would invalidate our fair use case, as it would be impossible to justify those payments as necessary to the direct operation of the site as a non-profit entity. However, we'll continue to explore separate licensed projects like MM25, or officially licensed commercial albums through our sister site OverClocked Records. We view these as separate from the core work that OCR does: distributing and evangelizing free music.

Will site staff ever be paid?

There is absolutely no plan to do this, nor has it been seriously discussed among site staff in all years of operation. It's conceivable that it could happen someday, after 501(c)(3) status is achieved and we're complying with all regulations for transparency, corporate bylaws, etc. djpretzel wants there to be a plan for the site should anything ever happen to him, and operating a 501(c)(3) will require more administrative duties for things like bookkeeping and accounting. Again, if it were to ever happen, it would be executed properly to the letter as per federal guidelines for non-profit organizations and in full compliance with our own legally binding submission agreement.

Is there anything to prevent revenue from being distributed as profit to staff now?!

Of course. Just because OCR is not a 501(c)(3) yet does not mean our submission agreement isn't legally binding: it is. And that agreement, which applies to OCR as an organization, strictly limits how revenue can be used. Again, site staff have never been paid nor are there any plans to do so.

[YoshiBlade]

First, I thank you all for your patience with me perseverating about the liability of the Remixer and with regards to the elevated risk that I feel may come with money being generated on YouTube, Thank You. Secondly I love, Love remixing music in creative new ways and having it stand in judgement, here, before everyone and it is causing no small amount of heart palpitations at the thought that after working hard to have a track accepted and having the world hear it, I could be party to legal ramifications. I love this site and I don't believe in any malfeasance on the part of DJP, so I'm not terribly concerned with money generated on music made by me and published by the OverClocked Remix. I am afforded so much by this site, I have no strong feels with the good faith generation of money for legitimate reasons. So I have some questions that will help me get moving past this

1) I enjoy utilizing VGM samples, if a posted track with samples was tagged on YouTube by the owner of the game, will the OCR simply drop the track and say "Ok,  This valid claim of unlicensed usage, we will voluntarily remove it"

2) regarding question 1, would that be the end of it with regards to me? In that, it goes no further and all parties are finished with the matter. Which I am OK with, if the copyright holder wants it down, I am 100% ok with that.

[zircon]

1. Whether or not you use VGM samples, a publisher could still send a takedown or flag the video. The use of a few samples here and there would not make a difference one way or the other. As for exactly what we would do, the situation has not yet come up so it's hard to say. We would consult with our multi-channel network (MCN) who has far greater resources to see what they advise. Chances are we would contest the claim in some way. Worst case scenario, the video stays claimed/down and that's it.

2. A claim on OCR's channel would not affect you in any way regardless of the outcome.

[MindWanderer]

4 hours ago, zircon said:

Whether or not you use VGM samples, a publisher could still send a takedown or flag the video. The use of a few samples here and there would not make a difference one way or the other. As for exactly what we would do, the situation has not yet come up so it's hard to say.

Well... it shouldn't.  But Square Enix has specifically objected to using their samples in the past, so OCR does not permit their use in accepted remixes.

What individual game publishers might or might not find objectionable is entirely up to them.

[Nabeel Ansari]

7 hours ago, MindWanderer said:

Well... it shouldn't.  But Square Enix has specifically objected to using their samples in the past, so OCR does not permit their use in accepted remixes.

What individual game publishers might or might not find objectionable is entirely up to them.

What he was saying is that it doesn't make a difference whether it's "just a few samples here and there" or more prolific use; the company can still find it objectionable even if it's "just a little bit" and be in their right to claim on it, like you said.

[YoshiBlade]

What about audio samples from film and media other than games? Will that change anything?

[Liontamer]

22 hours ago, YoshiBlade said:

What about audio samples from film and media other than games? Will that change anything?

No.

On 8/14/2016 at 0:39 PM, YoshiBlade said:

Has OCR's YouTube channel ever had a video taken down from a copyright notice? I'm still gathering as much information as I can, so I can make an informed decision about all of this.

On 8/14/2016 at 1:01 PM, djpretzel said:

@Liontamer can confirm but I think the "worst" that's happened is that some of our videos hit up against content match because they were licensed commercially elsewhere.

Sorry to miss this from the previous thread, YB. No, we've never had a video taken down due to copyright notice. We have 23 videos out of 3,000+ that have been flagged for copyright notices; some are based on similar melodic matches to the original music, some are claimed by the artists or copyright holders, and many are false positives based on sound effect matches or similarities that we really should work on resolving now that we have a MCN that can handle this on OCR's behalf. I can create a list later, if you need.