Page 131 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 4 Formulating a Non-commercial UGC Access Levy Scheme
An Intermediary-oriented Approach

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reproduce it and make derivative works.
Some online intermediaries, especially music streaming services, have already taken
more active actions to seek licences from copyright owners and provide users with access
to an abundance of copyrighted works. For instance, in China, the online music market has
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been dominated by several platforms such as QQ Music, Kugou Music and Netease Music,
which has facilitated copyright enforcement because it is much easier to collect license fees
from platform intermediaries than from individual users. According to the Music Consumer
Insight Report released by the International Federation of the Phonographic Industry in
2018, China, one of the countries hardest hit by piracy a decade ago, has become the country
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with the highest percentage of consumers listening to licensed music (96%), far exceeding
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the international average of 62%. The royalties UGC platforms pay are reimbursed by
spreading the fees to a vast number of individual platform users. Hence, each user can obtain
access to a great many copyrighted works at a reasonably low price. For example, QQ music
subscribers can gain access to unlimited ‘ad-free’ music streaming and download up to 300
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songs for a fee of RMB20 (US$3) per month. The Modernization Music Act enacted by
the US in 2018 confirms the efforts of music streaming services to facilitate users’ ability
to obtain authorised copies of copyrighted works at a low price, and requires copyright
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collective societies to grant compulsory licences to music streaming services.
Despite the successful experience of music streaming services in facilitating users’ access
to and use of copyrighted works via self-generated solutions, we cannot be too opmistic that
UGC platforms can take similar, active and substantial actions, such as seeking license from
copyright owners, to legalize UGC creation based on pre-existing works. Music streaming
services belong to the categories of user-distributors who directly use the copyrighted works,
and who are easily caught by the copyright industry. On the other hand, UGC platforms are
categorised as facilitator-distributors who merely facilitate users’ use of the copyrighted
works in the form of UGCs, but do not use the copyrighted works. The possibility of being
shielded by the safe harbor rule provides little incentive for UGC platforms to seek copyright
license for UGCs. Although some UGC platforms have sought copyright licenses for some
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works, only a few works can be covered whereas the scope of the source works for UGCs
144 For example, ‘You grant Pinterest and our users a non-exclusive, royalty-free, transferable, sublicensable, worldwide license
to use, store, display, reproduce, save, modify, create derivative works, perform, and distribute your User Content on Pinterest
solely for the purposes of operating, developing, providing, and using Pinterest’. Terms of Service 3.b., Pinterest. More
discussion in Section 7.2.1.
145 2016-2017 Research Report on the Value of Digital Music Platforms in China (DoNews, 10 May 2017) <http://www.donews.
com/news/detail/4/2952666.html> accessed 19 May 2019.
146 Music Consumer Insight Report 2018, at 17.
147 Ibid 8.
148 QQ Music--Green Diamond Luxury <https://y.qq.com/portal/vipportal/index.html> accessed 19 May 2019.
149 Dave Davis, ‘Music Modernization Act of 2018 Becomes Law’ (Copyright Clearance Center, 11 October 2018) <https://
www.copyright.com/blog/music-modernization-act-introduced-house-senate/c> accessed 15 June 2019.
150 Jyh-An Lee, ‘Tripartite Perspective on the Copyright-Sharing Economy in China’ (2019) 35 Computer Law & Security

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