Impact of YouTube's Royalty Agreement and Content ID

  in Royalty News

Aug 23, 2011

The recent decision by YouTube to start paying royalties to the original creators of copyrighted videos uploaded by anyone, will have a large effect on musicians, songwriters, the online community and especially The Royalty Exchange. While the decision has spurred mixed reviews from each side, there are pros and cons of this decision for each involved party.

The agreement, made by YouTube and the National Music Publishers Association (NMPA), will give royalties to songwriters for content uploaded by them, as well as, all videos uploaded by YouTube users containing any of the songwriter's content. The royalties, generated by ad revenue based on the popularity of the particular video, could be a substantial gain for songwriters of all genres and popularity levels.

By using a new tool called Content ID, YouTube is going to find all the videos related to an artist/songwriter, identify the videos correctly and present the original creator(s) with three options: keep it up, take it down or make money off of it.

Obviously, most songwriters will choose the third option. The process is very simple and painless for songwriters to have their work identified. They provide Content ID with their original audio tracks, and it finds all related materials across the site. Content ID will even identify EVERY single video with ties to the provided audio tracks, including someone playing an acoustic version of a popular song, all the way up to, a shaky footage of the actual artist playing the song to a sold out arena.

Here is a short video explaining Content ID, and how it all works:

http://www.youtube.com/watch?v=9g2U12SsRns&feature=player_embedded

The decision is a huge victory for songwriters, artists, record labels, royalties and TheRoyaltyExchange.com. According to YouTube, artists/songwriters could potentially double their ad revenue, which also leads to a large increase of their royalty streams. This incredible increase of royalties paid to all artists will hopefully bring even more artists to our marketplace in the future, as well as, open the doors to our investment platform for lesser known artists with material made "famous" by the YouTube community.

For all the readers unaware of Parry Gripp's viral video/song called "Baby Monkey (Going Backwards on a Pig)"...Enjoy one minute of ridiculousness for the day. Who knows? Maybe Parry Gripp could one day place the royalties for this song up for auction on our site.

On the flip side, some YouTube users are upset about the restrictions placed on their creative efforts. Thousands of videos are uploaded everyday containing snippets (or full recordings) of many different songs. Even though these videos are technically an illegal use of copyrighted material; many of these videos are creative, unique, hilarious and in some cases, much more entertaining than the original version.

Time will only tell what effect this decision will have on a huge site like YouTube. My hope is that YouTube's Content ID tool won't hinder the incredible creativity showcased by millions of YouTube users, however, artists and songwriters deserve to be compensated for their hard work...even if it may take a different form.

I wonder how easily Content ID could allot the royalties for this one...

http://www.youtube.com/watch?v=tcVXCeWk0PE