As the adage advises: if you can’t beat ’em, make a deal that will yield higher advertising revenues.
That’s exactly what Universal Music Publishing Group did when it reached licensing deals with two prominent Internet content companies. The deals will allow content-creators for Fullscreen and Maker Studios to tap Universal’s catalog without paying royalties while ensuring the publisher knows immediately who is using its works in online videos.
Without such an agreement, revenues from user-generated YouTube videos are attained through lawsuits and private settlements. Publishers have the option of seeking to take down the video or placing an ad on it. More often than not, publishers choose the ad option. This also means they must track down who uses their catalog, say, via current software-based systems, which aren’t always effective at detecting copyrighted melodies; publishers, and, indeed, even giants like Google, can get overwhelmed tracking online material these days, when, for example, 72 hours of video are uploaded to YouTube every minute.
YouTube pays publishers who put advertising on videos a minimum of 15 percent of the net ad revenue for material used from their catalogs and it can be significantly higher a percentage. Universal, by licensing use of its extensive catalog, one that includes everything from Adele to Wu-Tang Clan to Metallica, can avoid the problem of detecting hard-to-trace covers.
Although revenues would not be significant early on, the agreement pays Universal more based on video popularity, according to reports. And, by the way, those videos that publishers put ads on, get larger audiences, as do those with higher production values, as occurs, analysts acknowledge, with products from Fullscreen and Maker Studios. The deal is also great for the two shops’ content-creators like Snoop Lion’s (nee Dogg) WestFest TV. They now have more freedom to use music without fearing legal repercussions. Look for licensing deals like this one to become more frequent, as music publishers and copyright owners in general continue to cash in on new media revenue streams and do so cooperatively, rather than warring with each other.