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Independent music publishers urged to opt into YouTube licensing deal

November 17, 2011 |  3:15 pm

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The National Music Publishers Assn. on Thursday released the terms of the settlement of its years-long legal dispute with YouTube, and is urging songwriters and publishers to sign a licensing agreement that is part of the lawsuit's resolution.

The deal would allow thousands of independent music copyright holders to begin collecting a percentage of the advertising revenue generated by YouTube videos that use their music. NMPA and Google Inc., which owns YouTube, announced the settlement in August. Until now, the two parties did not disclose the terms.

"This is enormous progress for independent publishers and their songwriters, who previously have not been afforded the opportunity to capitalize on these kinds of revenue streams,” said David Israelite, president of the NMPA, which represents thousands of music publishers in the U.S.

The settlement covers only publishing rights, which involve the copyrights to the song's musical and lyrical compositions. Rights for the sound recordings are administered separately. YouTube already has licensing agreements in place with major record labels to cover the recording rights.

The current agreement does not include Universal Music Publishing Group, EMI Music Publishing, Sony ATV Music Publishing or Warner/Chappell Music, the industry's four largest music publishers, who have signed separate licensing contracts with YouTube. These four publishers control roughly 60% of the global publishing market.

The remaining 40% is divided among thousands of copyright holders and a handful of mid-sized independent publishing companies such as Imagem, whose catalog includes the works of show tunes legends Richard Rodgers and Oscar Hammerstein, and Carlin America, which owns the rights to thousands of songs such as "Are You Lonesome Tonight?"

Imagem and Carlin have already opted into the YouTube settlement.

"This is a fair settlement because we'll be getting essentially the same licensing terms that the major publishers have with YouTube," said Caroline Bienstock, chief executive of Carlin.

Notably absent from the settlement is BMG Chrysalis, the largest of the independent publishers, with a catalog of more than 700,000 songs, including works by David Bowie, Johnny Cash and the Ramones.

Should BMG, which is jointly owned by German media giant Bertelsmann and investment firm Kohlberg Kravis Roberts & Co., decide against the settlement, the company could still pursue its lawsuit against YouTube.

BMG's case is part of a larger lawsuit filed in 2007 by Viacom Inc. The suit alleged that YouTube infringed copyrights by hosting pirated videos uploaded by users of the popular online video site. A district court judge last year disagreed with Viacom, saying that YouTube only had an obligation to take down infringing content when it is asked to do so by copyright holders. The case is currently in the U.S. Second Circuit Court of Appeals in New York.

The NMPA, however, is urging its members to opt into the settlement.

“The licensing opportunity recognizes and compensates the contributions of songwriters and publishers, and establishes an ongoing mechanism for sharing revenues generated when their work is used online," Israelite said.

Those who opt in would receive a portion of the advertising revenue generated by videos that contain their songs. If the music is played in the background to accompany the video, songwriters would get 15% of the net advertising money, minus a processing fee. If the song is performed by someone in the video, songwriters would receive 50% of the net revenue.

Publishers have until Jan. 16 to opt into the agreement, after which YouTube will begin tabulating royalties, which are paid out to songwriters through the Harry Fox Agency, an organization that collects royalties on behalf of artists.

The outcome of the agreement covers only videos and has no bearing on Google's music store, launched on Wednesday.

RELATED:

YouTube inks licensing deal with music publishers, settles lawsuit

Judge rules against Viacom in copyright case against YouTube

Google launches music store

— Alex Pham

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