Major record labels to share ad revenue with indie music publishers

In a June 19th Billboard article written by Ed Christman, the National Music Publishers’ Association led by David Israelite will be able to share revenue on music videos streamed on Vevo and YouTube. This first deal was struck with Universal Music Group and covers North America.

The deal according to the article goes back to 2008. However, for 2008 and 2009, publishers will receive 15% of ad revenues generated by music videos. As from 2010 onward, the percentage will drop to 10% of ad revenue generated by music video streams.

Although the deal also covers concert footage, backstage videos and artist interviews besides the music videos, I’m curious as to whether this deal will negatively affect independent artists that are not involved in 360 deals with the Major Labels. This possibly means that preference in placement on the Vevo and YouTube platforms will be given to UMG artists. This to me looks like a future ITunes model with UMG artists taking featured or slide displays for increased visibility.

This is a great move for the NMPA because the rights of independent artists are being considered in the profitability of digital content. Just as in the film industry where downloading of film trailers and sharing could be considered illegal, I wonder if this will be the case with music videos. On the flip side, this could be a potential downer for the music industry because labeling the download of music videos from a site such as YouTube or FatalCut Entertainment as piracy will seriously impede the popularity of music. It is through music videos that fans and consumers develop the desire to attend concerts.

Record labels such as UMG can’t and will not possibly be able to cover most of the platforms where music fans consume, share and engage on music content on the World Wide Web. Maybe the most popular ones. The underground sites and forums which could potentially be an incubator for the biggest concert goers might be shut out of the music video delight if it becomes illegal to download and post music videos on other forum. This so far has been a great and cheap advertising tool for the music industry.

By Gerard Ngwang

Reference:

http://www.billboard.biz/bbbiz/industry/publishing/nmpa-inks-deal-with-universal-music-group-1007362952.story?imw=Y

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