While three of the four major record companies and many independent labels have deals in place with YouTube, the Google-owned video service really is struggling to get deals done with the songwriter collecting societies. Following their very public falling out with PRS For Music here in the UK, and with PRS counterparts GEMA in Germany, squabbles that have led to YouTube pulling all premium music video content in those territories, news today of ongoing legal wranglings between the video service and one of the US's songwriter royalty bodies, ASCAP.
A US judge has reportedly ordered YouTube to pay $1.61 million in back royalties to ASCAP, and a further $70,000 per month moving forward, to pay songwriters allied to the collecting society whose work appears on the video website in the US. It's a temporary settlement because the web firm and collecting society have failed to reach a blanket licensing agreement over the use of ASCAP's members' music on the video site, and the matter is now working its way through the courts, with a full hearing yet to take place. The ruling means ASCAP will receive some monies while legal action is ongoing. $1.61 million for back royalties is a lot more than what YouTube had proposed they pay, though is about 13% of what the collecting society suggested they were due.
As much previously reported, YouTube argue that the music publishers and songwriting collecting societies - some of whom are now renegotiating their deals with Google, having given what they considered extra favourable start-up rates first time round - are asking for way too much money from the video service. Google say the proposed rates could never be covered by advertising revenues.
But some commentators argue that's because of Google's business model, which is based around providing relatively cheap to run services that generate large amounts of traffic, which can be monetised through the sale of relatively low-cost advertising. Music videos, some say, should be considered premium content and therefore demand premium ad rates, but Google's current set up doesn't really allow for such premium services or advertising.
While YouTube are yet to withdraw music videos from their US service because of their ASCAP dispute, some reckon the company has long since abandoned its original idea of being the "world's biggest video jukebox", preferring instead to power other people's services - like Universal Music's in development video service Vevo - and letting other people worry about premium ad sales.