YouTube strikes deal with music publishers worth millions

YouTube has reached a deal to pay millions of dollars to music publishers and songwriters for back royalties from unlicensed songs played over the video streaming service.

The agreement, which was announced on Thursday by YouTube and the National Music Publishers Association, comes amid loud criticism that the service allows users to post songs without the proper permissions and champions an outdated notice and takedown system. Earlier this week, YouTube announced it paid $1 billion in royalties to the music industry in 2016.

The two sides said the agreement addresses "the challenges around identifying ownership of musical works, and it will help solve the problem of attribution so that music publishers and songwriters can not only be paid for works viewed on YouTube in the past where ownership was previously unknown, but also be paid for those identified works moving forward."

NMPA President and CEO David Isrealite said that publishers appreciate YouTube working with the music industry on the issue. Some advocates have called for an overhaul of copyright laws to put the onus on YouTube, owned by Google, to filter out unlicensed works from searches and takedown illegal songs. The current system requires rights holders to identify unlicensed songs and notify YouTube and Google.

“It is essential that we work with digital services like YouTube – the most popular digital platform for music discovery – to fix the challenge of incomplete ownership information to ensure royalties are no longer unmatched and music owners are paid accurately by the platforms that rely on their work," Isrealite said.

Under the terms of the deal, music publishers will have to opt into the agreement. The opt-in period opens Dec. 12 and ends Feb. 28, 2017.

After that, YouTube will provide participating publishers with a list of songs that "YouTube may have been unable to obtain proper ownership information for." Publishers may then claim ownership of those songs and receive the accrued royalties.

After a three-month window to claim songs, any unclaimed royalties will be distributed to participating publishers based on market share. That process will be repeated for future 12-month periods until the end of 2019.

“The revenue earned by the music industry on YouTube continues to grow significantly year over year, and we’re committed to making sure that publishers are paid for the usage of their works on our platform,” said Tamara Hrivnak, Head of Music Partnerships, Americas for YouTube and Google Play. “We are excited to partner with the NMPA to address the industry-wide challenges associated with identifying publishing ownership on digital platforms.”

Reach Nate Rau at 615-259-8094 and follow him on Twitter @tnnaterau.