Universal agrees to give US publishers share of VEVO booty

By | Published on Wednesday 20 June 2012


Well, that was quick. Last week the boss of America’s National Music Publishers’ Association was saying that he’d sort out those major record companies with their dodgy ‘not passing on VEVO royalties to publishers cos it’s promotion like’ ways, and look, he’s already brought Universal Music in line. Then again, while the EMI takeover deal is still under investigation, this is definitely a good time to be bringing the mega-major in line on anything, them being super keen to look just a little less evil.

As previously reported, Matt Pincus of American indie publisher Songs Music Publishing was one of the first to publicly criticise the VEVO publishing royalties situation earlier this year. He revealed that his company was receiving very little income from VEVO, because in the US the booming music video service had deals with the record companies that put the obligation to pay publishing royalties onto the labels, rather than paying royalties direct to the publishers of songs that feature in videos on the site (as they do in the UK).

But, Pincus said, where artists performed their own songs, labels were using a common clause in artist contracts that says publishing royalties are not due when music videos are used for “promotional purposes”. But, arguably, videos have become revenue generators in their own right thanks to YouTube and VEVO, and no longer just exist to promote record sales. This situation specifically disadvantaged independent publishing companies like his, Pincus added, because unlike the majors he didn’t also own a big record company that was concurrently benefiting from this increasingly contentious interpretation of the ‘no royalty in promo’ contract clause.

Responding to this issue, at his AGM last week, NMPA boss David Israelite said: “Today you have VEVO talking about reaching $150 million in revenue and wanting to grow to $1 billion, and a large amount of the music videos being played are not getting licensed [by our members] and publishers are not being paid. NMPA is going to put an end to that”.

And here we are, less that a week later and the announcement that Universal has agreed to a “groundbreaking licensing model” that will ensure American publishers get paid when their songs appear in videos owned by the major that in turn appear on VEVO.

Confirming the agreement, Israelite told reporters: “We’re all navigating through a rapidly changing business environment and NMPA’s job is to ensure that the rights of every songwriter and music publisher are protected. This is a model example of how record labels along with songwriters and music publishers can move forward together to ensure that the licensing process is more effective and efficient, and that all creators are fairly compensated”.

Although specifics are not yet known, Billboard reckons publishers could get 15% of the ad revenues generated by VEVO for Universal videos, and that that royalty will be paid back to 2008, albeit with a lesser share for the first two years. It’s thought mechanical rights administrator the Harry Fox Agency will manage payments.

Moving forward, Israelite confirmed he was looking for similar commitments from the other majors, noting: “We have raised the issue with [them] and will now turn our attention to pursuing similar agreements. We intend to enforce our rights”.

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