Google Pulls Music Videos from Germany as Streaming Royalty Struggles Continue
Legend has it, the great blues musician Robert Johnson went down to a crossroads and made a deal with the devil. In exchange for unfounded musical talent, the story says, he traded his soul. It was a yes or no choice; be a guitar hero, or not. He chose the immortality of his music.
The music industry is hardly so fantastic but like the legend, the thin line between the industry’s successes and failures, or evolution and regression, seems to hinge on the big decisions made when the road of progress forks.
Looking at the music business over the last decade, as it's struggled to evolve to the changing digital landscape, two pivotal moments jump out. The first was the evolution of file sharing networks and how the music industry chose to handle them. The second was the advent of Digital Rights Management (DRM) encryption and how the music industry
steered its early use.
Now, it’s starting to look like the industry is reaching a third crossroads: license fee rates for streaming services.
Already this year, what companies pay for the rights to stream music is proving to be a contentious subject.
On one front, popular Internet radio stations like Pandora or Last.fm are
pitted against the industry in an effort to find a licensing structure that is complimentary,
and not in conflict with, the economics of ad-supported streaming services. On a second front, the industry is fighting it out with YouTube over the same issues for video streams.
In December, unable to reach an agreement, Warner Music (
WMG)
pulled its music videos off YouTube.
A month ago, YouTube
pulled its video streams (music videos) from the UK after it failed to reach a licensing deal with PRS for Music (the UK licensing body). Wednesday, the same thing happened in Germany. Unable to reach an agreement with Germany’s equivalent agency, GEMA, YouTube cut the music video feeds there too.
The report from Google’s (
GOOG) side is that GEMA was seeking an untenable deal that would have charged an immediate fee of .01 Euro ( about 1.3 cents) and an eventual draw of $0.16 for each song played by a German listener.
"This €0.01 for an interim solution is already too much and actually GEMA demands €0.12 per stream for a long-term agreement," Hamburg-based Google spokesman Hennig Dorstewitz said to
Billboard.
GEMA CEO Harald Heker countered that the failure to reach a deal lies in Google’s unwillingness to give GEMA more “transparency” on how the music is listened to. Heker went onto suggest that other European collection societies will have a similar problem.
He’s probably right. A long term solution for paying royalties from streamed songs or videos isn’t going to be resolved quickly. The stakes are too high.
Originally Posted by Brandon Matthews
