Google has finally reached a deal with a group of music publishers who filed a class-action lawsuit in 2007. The arrangement allows the use of copyrighted materials on YouTube, and Google will pay the royalties.
YouTube's Legal Issues
When Google picked up YouTube in 2006, they received a lot of flack. Yes, YouTube had a lot of potential, but Google had paid a massive sum ($1.65 billion) and YouTube was pulling in very little revenue. Plus, thanks to pirated and copyrighted content, YouTube was seen as a liability.
The predicted legal issues didn't take long to surface. In 2007, Google was sued by a large group of music publishers and TV/movie companies in a class action suit simultaneous to being sued by Viacom. Since the complaints were essentially identical, the cases were reviewed simultaneously.
Google fought fairly well in that legal battle, and in 2010 it was ruled that YouTube was "protected by the safe harbor of the Digital Millennium Copyright Act (DMCA)." Both Viacom and the class-action group filed appeals, but Google's recent move seems to have satisfied at least the majority of the plaintiffs.
Google's Royalty Deal
Rather than fighting for the right to use music that has been copyrighted, Google has established a system wherein the music companies can get royalties for songs used in YouTube videos. According to CNET, "music publishers can license Google the right to sync their music with videos posted by YouTube users and YouTube will pay the royalties." Few other details were released.
The music publishers seem pleased with the arrangement. David Israelite, CEO of NMPA (one of the groups involved in the case), stated, “We are pleased to have resolved NMPA’s litigation claims and to work with YouTube in providing a new licensing opportunity for songwriters and publishers. This is a positive conclusion for all parties and one that recognizes and compensates the work of songwriters and publishers going forward."
Elizabeth Moody, YouTube's head of strategic partner development for music, also wrote about the deal on the YouTube Blog.
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