German Rights Body and YouTube End Seven-Year Battle

Jenny Tobien/picture-alliance/dpa/AP Images
The YouTube logo photographed on Aug. 9, 2016.

The deal seems as much a stop-gap passing of the baton as it does a genial business agreement.

A seven-year-long battle over the work of German songwriters and composers has ended.

Google's international video giant YouTube and GEMA -- the Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte, a German organization responsible for administrating publishers', songwriters' and composers' work for licensing, and collecting the fees around that licensing -- announced they have reached a deal that will allow the 70,000-plus authors and publishers (and millions of international artists and rights holders) that GEMA administers to appear on the platform.

GEMA writes, carefully, in its statement that it "is fulfilling its fiducial duty to manage the rights on behalf of its members by signing this contract." YouTube's Christophe Muller, head of international music partnerships, explains, succinctly, that "starting today, more music will be available on YouTube in Germany."

Indeed, GEMA's announcement is hardly celebratory in tone, and ends on an ominous note, with the organization writing that it and YouTube still have "different legal positions" on the policing of uploads to the video platform.

GEMA had two main problems with YouTube: low royalties and safe harbor, the main enabler of the so-called "value gap." Jean-Claude Juncker, President of the European Commission, made clear in his state of the union address in September that his government would force sites like YouTube to pay more for the content on its platform, and better police infringing content. This, in a way, gave GEMA a regulatory out on the safe harbor issue.

Another precipitating factor to this agreement came earlier this year, when a Munich court ruled in favor of YouTube. GEMA had argued that YouTube should be responsible in some way for users' uploads, but Judge Rainer Zwirlein disagreed, writing that YouTube "is an automatism... the platform only provides the tools." (GEMA had won a very different case against YouTube about four years ago.)

Taken together, the writing was increasingly on the wall for GEMA, and ignoring and/or fighting against the quickly growing digital market, even in a country where last year 70 percent of recorded music revenues (which GEMA does not oversee) came from physical sales. So, after seven years of fighting, the most prudent  course of action presented itself: relent, for the time being, while the European government fights for its issues on a continental scale, while also letting its members begin making some money from the world's largest, and least-remunerative, music-streaming platform.

As well, pan-European licensing is becoming the norm, as the Digital Single Market preps its debut and collaborations between administrators have begun to look at rights management on the continent as a group. The International Copyright Enterprise (ICE), was announced in November of last year as a joint effort between GEMA and its British and Swedish counterpart, PRS for Music and STIM.

As said, YouTube has its own significant problems on the continent, and its new German deal won't make those go away. Even YouTube's parent company is expected to present rebuttals to the European Commission's antitrust investigation this week. In the meantime, one might as well make that $0.0006.