The Complexities of Music Licensing

The announcement this week that Universal is ending its licensing agreement with YouTube came with just as much pomp and circumstance as the last time that it broke up with a YouTube star. Back in July, Universal abruptly pulled its music from YouTube’s top videos, including DaddyOFive, the infamous “push push push” videos that launched an avalanche of controversy over YouTube’s policies and regulations.

So what’s going on here? Why are these companies treating artists and consumers so poorly?

On Friday, Universal responded to the situation on YouTube, claiming that it only took down a few videos that contained specific information about the studios that have assigned music licenses to DaddyOFive, and that those videos “were promoting illegal copyright infringement and therefore in violation of the Digital Millennium Copyright Act (DMCA).”

For a list of every video that Universal took down, you can check out Universal’s response, as well as the list provided by The Verge. Had any of their music been used in YouTube videos of vloggers who stream their exploits on new casino sites, you would have experienced some weird silences in place of where the music would have been.

The Verge explains:

In the response, Universal only lists the names of two of the three of the companies that it claims make up its current licensing agreement with the video-hosting site, saying, “Universal Music Group licenses the rights to distribute certain of its music on YouTube,” with no mention of the third. Universal’s current contracts with YouTube are officially concluded, and no longer binding. It’s unclear what prompted Universal to remove the videos in July and not act earlier this month. A representative of Universal declined to elaborate on the dispute over licensing contracts and their documentation with YouTube.

While Universal’s response doesn’t say whether it will continue to license music from YouTube, the parent company of Google, the answer is definitely yes. In September, Universal signed a five-year licensing deal with YouTube, extending the contract beyond YouTube’s current deal. In 2014, YouTube granted Universal a license to be the sole streaming platform for much of Universal’s music. And it’s that deal that appears to be breaking down.

The Verge notes that YouTube has made changes to its rules of which content it can legally license on its website, reducing restrictions on what content can be monetized. Also, Universal’s contract is apparently up at the end of this year.

On the other hand, Universal’s statement says that it has made other adjustments to the way it licenses music from YouTube, but doesn’t actually provide much in the way of detail. The Verge notes:

In addition to removing videos where Universal licenses music from YouTube, Universal has made changes to its licensing terms to lessen the likelihood that YouTube will remove videos or music without a specific license. One clause in YouTube’s licensing agreement stipulates that videos that feature Universal music can be monetized with a different paywall from the existing YouTube Premium subscription, which offers streaming and premium access to music videos on the site. Universal’s new YouTube contract states that it “may provide payment, license, rights, or other consideration to YouTube and/or its licensors in connection with YouTube premium services”, including payments to YouTube “for the use of Universal content on YouTube Premium,” according to the contract. That rule change is broadly understood to mean that videos using Universal music can be monetized using YouTube’s newer subscription services. YouTube didn’t respond to requests for clarification of Universal’s decision to offer less of a paywall to its current music videos, and whether that means the company has its feet firmly on the ground after its troubled contract negotiations with DaddyOFive.

It’s unclear what’s happening with DaddyOFive. The video-hosting site lists DaddyOFive’s account, with the last post from January of this year. DaddyOFive’s tweets have long since been deleted.

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Tim Spafford

Tim is a student who works hard to get a degree in finance and build a successful career in business consulting. Being a student and living in London Tim has a real-life experience in budgeting, saving, money making, traveling and having fun.