A mighty fine problem

It takes a lot to get me to write on this blog. It takes an emerging abstract news story, a chance to consider an unconventional market and a misreading of train timetable meaning I am stuck in a cafe for an hour. Well the stars have aligned and here goes…

Youtube is a popular and growing industry for entertainment, albeit not one I regularly use for entertainment, but an important one and many people are using it to make a living. The example of this that I am talking about today is the Fine brothers. But why them?

The fine brothers are two brothers who are mostly famous for their reaction videos. With series like Kids react, Teens react, Elders react etc they became very popular over time gaining 14 million subscribers, which I am informed is a fair amount. I’ve watched a couple of their videos and they seem light hearted and entertaining. So what could these two brothers do which is so outrageous. An act which has seen them lose lots of subscribers and trend for all the wrong reasons on twitter.

Welcome to REACT WORLD! A few days ago the Fine brothers released a video with a big announcement. They were going to trademark their react videos in order to protect their brand and would help people who wanted to join the react franchise worldwide, while taking a cut of the revenue (As to what percentage,I do not know). At first this was met by people realising their dream of being able to start a react channel is London, Budapest or Seoul. However soon after, it was to sink in what the implications could be to the industry.

The fine brothers wanted to trademark React. They were trying to protect the react brands, they were stopping competition. After the negative backlash, they replied with the suggestion that you could still make reaction videos, just not using the react name.

React World allows you to license some of FBE’s most popular series (the specific elements and structure of each show). With that comes a suite of support that you can read about at the website.

We do not hold a copyright on reaction videos overall. No one can. React World is about licensing FBE’s show formats, not just for shows like Kids React, but also others like “Do They Know It?,” “Lyric Breakdown,” and more. This is similar to TV where you can’t make a show substantially similar to “America’s Got Talent,” but of course you can make a completely different talent competition series. Same deal here.

We do not own the idea of reaction videos nor would we shut down anyone making reaction based content. Of course you can make your own react videos, but React World is an opportunity to localize versions of our specific series. This is also a way to create a community on YouTube of like minded producers and fans who want to work together, and benefit from the guidance and resources that we can provide around the specific FBE shows that we are making available through the React World program.

-Extract from description of REACT WORLD video above

 

While this may seem reasonable, the fact that they have trademarked the word “REACT” is a cause for concern and the first attempt to do something like this. There are a few key questions which should be debated, the first of which is:

 

Are the Fine brothers trying to create a monopoly?

There are reasons for debate here and both sides can be argued. The first answer can be no they are not. As they have previously stated, videos of people’s reaction are still allowed. This is a genre available for entry, as long as it isn’t under the name of the trademarked phrases. However, you can also argue this is a monopoly. There are high barriers to entry  and it is very difficult to go into that genre.

An important part of this question is defining a monopoly, so here is a definition:

A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition, which often results in high prices and inferior products.

http://www.investopedia.com/terms/m/monopoly.asp

While it seems that they are trying to  create a monopoly, we need to work out how restrictive the monopoly is. By this I mean how much are they limiting. An example of what I’m trying to discuss is the phone industry. Imagine that the iPhone was the first revolutionary phone and they wanted to protect it with trademarks. Now let’s ask what is it apple are trademarking. Are they trademarking the idea of the phone? Well the answer is no and thank goodness, otherwise nobody else could make phones. Are they trademarking smart phones, or touchscreens? If so then  again this isn’t good for producers as they can’t access the technology to compete. The final option is are they trademarking the iPhone as a brand, then anyone can make phones as long as they aren’t copies. Fine brothers are most certainly doing the third option and that is fine (if you’ll pardon the pun), and they definetely aren’t doing the first. People can make videos. However whether they are doing the second suggestion is where the ambiguity lies.

The main reason this is a monopoly is that if I wanted to make reaction videos, it would be very difficult to make them without the word react involved, and react is a word of few appropriate synonyms. A quick Google says that I would have to name my new series as either “people reply”, “people respond”  or “people give a snappy comeback”. All of these a names are either ridiculous or inappropriate. While this argument may seem over zealous, a quick search of the USPTO (United States Patent and Trademark Office) shows that the Fine brothers did indeed file a trademark FOR REACT. The fact that this is a trademark as opposed to a copyright is even more room for concern as it means the following:

“the purpose of a trademark is to protect words, phrases and logos used in federally regulated commerce to identify the source of goods and/or services”.

Lawmart

Therefore they are seemingly trying to make a monopoly of the second kind.

REACTTM.png
Link to REACT trademark on the USPTO

It is worth asking how much control are the Fine brothers willing to exert.  While assuring that they won’t be overly totalitarian in their recent update video, there is much cynicism about this. A youtuber called “8-bit Eric” recently came out saying that the Fine brothers had his videos removed. He wasn’t competing with them, but they removed them. However it does seem that this man had infringed copyright rules and Fine brothers were well within their power, even if it was a bad decision for them (As I will discuss later).

 

The weird thing about the recent developments is that in the Youtube industry, The Fine brothers would most likely not lose from other competition. Going back to the phone industry again, if a new competitor were to arise similar to apple (say samsung), apple would be worse off due to the fact that people may buy from Samsung. But the mobile phone industry is a monopurchasing* industry in that you only buy one phone. You don’t buy two phones. However the Internet video industry is very different in consumers watch many videos and there isn’t a budget limit. A subscription to my “people give a snappy comeback” channel does not mean a loss of views, revenues or subscribers for the Fine brothers. If anything, more reaction channels will benefit the Fine brothers as I will discuss later.

What are the implications for the Fine brothers?

Firstly and most noticeably, it is not making them popular. They are losing subscribers at an alarming rate. They are being talked about negatively by youtubers and commentators and this isn’t helping them at all. The youtuber reaction is particularly prominent for them. They have worked with some of the industries biggest names such as Pewdiepie,  Smosh and Ryan High in series such as youtubers react and having people reacting to some of the said youtubers content  These videos are generally their most popular ones and the ones that gain them their biggest exposure. By burning these bridges with the community, this may stop the Fine brothers growing and could stem the availability of content.

However they are able to grow if react world is successful. React world is an attempt to franchise. This is common practice amongst big companies such as McDonald’s and Burger King and allows them to expand. However again this seems to be not great because they don’t need a physical outlet as burger king do, and these sub channels may not kick off on a large scale and the only new viewers may be those in different languages. This is not necessarily a large proportion of people as most of the world with free access to the Internet can speak English.

Earlier on I touched on the idea of competition. For the most part this is not good for current industries, however I mentioned why it wouldn’t affect the Fine brothers. Actually it could benefit them. Youtube advertises similar channels. For example if I’m Watching KSI, Pewdiepie may be advertised and I can subscribe to him. Both Pewdiepie and KSI benefit. Imagine people snappily give a comeback gains 8 million subscribers (I won’t overtake fine brothers 14 million any time soon), which channel will be recommended to my viewers? REACT! If I have introduced say 2.5 million people to the industry and they see react and view it  chances are they will like it. REACT may be 1 million subscribers better off and I will also be better off. Viewers will also be better off as both companies try to up their game for subscribers. By stopping my company, Fine brothers are stopping themselves, other youtubers and their viewers from benefitting.

It seems that everyone including the Fine brothers will be worse off with react world.

What are the implications for the rest of the industry?

The scariest part is that this is a new scheme. Nobody has done anything like this before. This is why it is upsetting many youtubers. Companies like sony and nintendo have considered restricting “Lets play”s to no avail. Should the fine brothers continue with react world it could start a process where there are only a few youtubers. This is extremely unlikely, however if the industry does become more protective, it will lower the creativity and new ideas. This is a rare case. KSI can’t trademark gaming videos and Caspar Lee can’t trademark vlogging. However Fine Brothers’ new scheme is very worrying as they attempt to create a monopoly in their industry.

 

 

*Made up term

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