YouTube seeks label aid to secure artists' publishing rights for videos
YouTube's appearance at the "Indie Week" convention recently held by the American Assn. of Independent Music (A2IM) in New York was the meet's best-attended panel, primarily because indie labels are desperate for information about how they can build revenue streams from the gigantic video site.
YouTube generally obtains the master and publishing rights for official music videos that appear on the site. It's the user-generated clips that cause the most confusion among labels and music publishers.
Last year, YouTube entered a settlement agreement with the National Music Publishers' Assn. (NMPA) to pay publishers through a formula based on 15% of revenue derived from advertisements that run with user-generated videos. The Harry Fox Agency (HFA) administers the program, which publishers must opt into. According to sources, if publishers opt in, they also agree to give up any potential lawsuit claims on alleged past copyright violations.
While a licensing system is in place to pay music publishers and master rights owners for recordings used in user-generated videos, what's not so well-known is that YouTube won't place any ads on clips for which it hasn't obtained the master and publishing synchronization rights. YouTube is often accused of making money off such videos by rights holders, but that isn't quite accurate because those clips aren't being monetized through ad placements. Looking at it another way, label rights holders aren't earning money from those videos in which YouTube doesn't have the publishing rights - one of the reasons why YouTube appeared at Indie Week.
At the A2IM panel, Maggie Argyros of digital distribution service the Orchard noted that, without these rights attached to user-generated videos, "nobody makes money: not YouTube, the labels, the publishers, the songwriters or the artists."
According to YouTube strategic partner development manager Scott Sellwood, the site has a pretty good handle on licensing and pays for user-generated videos where it has deals with the publishers, through the NMPA-negotiated, HFA-administered settlement agreement or direct deals. The company comes up short in monetizing videos in situations where artists control the music publishing.
Consequently, Sellwood told A2IM attendees that YouTube began an experiment this quarter, cutting deals with about 20 labels to serve as aggregators, contact acts who control their own publishing and get them to sign off their rights so YouTube can license the music through the labels.
In Europe, YouTube doesn't have a problem getting the publishing synch rights. It can just go to the collection societies, which generally have the right to license and collect for synchs, unlike the United States where ASCAP, BMI and SESAC do not control those rights.
As NMPA president/CEO David Israelite said at his organization's recent convention, the publishing industry isn't yet built for blanket licensing of synch rights. While he cited NMPA's settlement with YouTube as a model, in order to make such licensing a reality, there would have to be legislation and creation of a clearinghouse.
Once labels turn to artists who control their own publishing and put together a contract that it can bring to YouTube allowing the label to control those rights, it could open up the way for more user-generated videos to be monetized.
As it stands now, however, if a song has multiple rights holders and one of them doesn't want the song affiliated with a user-generated video, then YouTube can't - and won't - monetize that recording.
According to sources at the A2IM meeting, the label acting as an intermediary isn't enough to get user-generated videos monetized. The second factor requires metadata to correctly match the recording and song. That's another reason why YouTube apparently feels that getting labels to act as an aggregator makes sense: Labels have access to all the metadata associated with a recording, including the ISRC (international standard recording code), which publishers have a hard time tracking.
Once YouTube gets all the necessary rights and can match the metadata, then it can begin monetizing videos that previously weren't eligible to partake in ad-revenue sharing.••••