It doesn't. I know this since I was working on a startup using 30 second clips from itunes and consulted with multiple music lawyers who told me it was a grey enough area that I would get sued. I've advised for other music startups and they face similar challenges with music (one just hit 1mm downloads and got hit from Apple -> RIAA about the content).
Its incredibly frustrating when interesting applications like Shred pop up and the music folks make it difficult. Hopefully they can get some licenses and not have to sell their kidneys to do it.
yeah it's hard for a giant industry like music to adapt to all the changes digital, internet, and now streaming in so short a time. I feel the music industry just wants the distribution it had w/ records: buy something you can share w/ your friends, but not distribute to the whole world at once.
I think Shred Video perfect aligns with the music industry's objectives here. Shred Video is not designed to help professional videog's make movies that will be seen by millions, it's designed to make movies folks like you and me can share with our friends. In this way Shred Video is a service that will encourage more music purchases, a win for the artists.
If you happen to make a movie in Shred Video that gets a million views (rooting for you!), YouTube has ways of making sure the artist maintains their rights to their content and/or gets paid. This stuff will evolve, but there's definitely a way to get the artist paid and the users able to make art with the music they love.
Its incredibly frustrating when interesting applications like Shred pop up and the music folks make it difficult. Hopefully they can get some licenses and not have to sell their kidneys to do it.
This talk from Dalton is dated but still pretty relevant: https://www.youtube.com/watch?v=wTOlrN5-UGU