How Faceless Channels Make Millions Avoiding Copyright.

YouTube channel generates substantial monthly revenue, in the hundreds of thousands of dollars, through tens of millions of views. Surprisingly, none of the video content featured on this channel is created by the channel's owner. This raises the question of how such a channel not only exists but also manages to profit from content that belongs to other creators. It is even more puzzling that this channel has not faced demonetization or copyright strikes.

This scenario is not unique, as it is part of a broader phenomenon known as "YouTube automation." The core concept behind YouTube automation involves establishing channels within popular niches and topics with high CPMs (Cost Per Mille), which lead to higher advertising revenues. These channels are devoid of a visible creator or any original content creation; instead, they rely on existing content. A key secret ingredient in this process is the transformation of content. Many aspects, from scripting to narration to video editing and thumbnail design, are often outsourced to make these channels profitable. Remarkably, this business model has been in existence for over a decade, enabling ordinary individuals, including teenagers, to earn millions on YouTube. However, its success hinges on maneuvering within the realm of copyright law and staying within YouTube's Content ID system.

To shed light on how this is possible, we've previously produced a video outlining the step-by-step process of launching a faceless YouTube channel, which has garnered significant popularity on the VidIQ channel. It features Noah Morris, a 20-year-old entrepreneur in the realm of YouTube automation, who shared many of his strategies but left one crucial question unanswered: How do faceless channels navigate copyright and avoid demonetization and copyright strikes?

To address this inquiry, we consulted Noah, who provided insights into the complex landscape of copyright law and YouTube's Content ID system. It's important to note that neither Noah nor ourselves are legal experts, but our knowledge stems from extensive experience in YouTube content creation, disputes, and consultations with experts in the field.

One of the key concepts discussed was "fair use." Fair use is a legal doctrine that permits the use of copyrighted material within your own video, provided it is used in a transformative manner. Transformative content entails adding significant value to the original copyrighted work through commentary, educational insights, a different perspective, or parody. However, fair use is a gray area, both on YouTube and within the broader legal system, and misconceptions about it are common. Notably, YouTube does not determine what qualifies as fair use; the U.S. court system does. Four critical pillars of fair use include:

1. The purpose and character of the copyrighted work.

2. The nature of the copyrighted work.

3. The amount of copyrighted content used.

4. The impact on the market for the copyright holder.

The first pillar, "purpose and character," relates to the value and transformation added to the original copyrighted work. The more substantial the value added, the closer it aligns with fair use. The source or nature of the copyrighted work plays a significant role. High-risk sources, like sports broadcasts or corporate content, pose greater danger of copyright issues due to robust legal defenses. Low-risk sources include public domain footage, user-generated content, and factual or informational content. Diversifying sources and avoiding harm to the market of the copyright holder are essential strategies.

The third pillar, "the amount of content used," revolves around the significance of the copyrighted clip. Using the core of a copyrighted work is risky, even if it's a short duration. Misconceptions about using short clips without consequence do not hold up in legal proceedings.

The fourth pillar, "potential market impact," pertains to whether your content replaces the original copyrighted work in the market. Compilations can be problematic because they might redirect viewers from the original content to the compilation, impacting the copyright holder's market.

To avoid copyright claims and Content ID issues, it's advisable to employ low-risk sources, transform the content, add variation, maintain a break between copyrighted segments, and diversify the types of content used in your video. It's also essential to consider whether the content is used for educational or commentary purposes.

While faceless channels occupy a somewhat ambiguous space in the YouTube ecosystem, copyright interpretation plays a pivotal role, and the rules are subject to bending. This phenomenon is likely to persist, both captivating and confounding creators and audiences alike.