Without exaggerating, this press release can be described as historical: on November 1, 2016, YouTube settled its long-term dispute with GEMA, the German collection society of authors and publishers, and licensed its repertoire of music videos retroactively until 2009 and for the future (the contract runs until April 30, 2019). The ongoing court proceedings were also terminated.
Not only the infamous warning signs ("Unfortunately, this video is not available in your country") will now largely be removed and the videos will again be unblocked for users. The authors of the music played in the videos will also benefit from the deal: For the past seven years, GEMA will receive a one-time payment from YouTube, which GEMA will distribute to its members. In addition, YouTube will from now on report the usage to GEMA, allowing GEMA to distribute the royalties to the authors according to the distribution plan.
As agreed by YouTube and GEMA, the amounts to be paid will not be disclosed. Only the compensation model has been made public: GEMA will receive a percentage of YouTube’s advertising and subscription revenues, which will be backed by the payment of a minimum guarantee. While it is likely that GEMA will have been unable to enforce payments of the originally claimed amount of 0.375 cents per access in the negotiations, it must be expected, however, that GEMA was able to close the widely discussed "value gap" at least a bit with this agreement. GEMA is also allowed to transparently communicate material contractual terms to its members, thus allowing authors to check their statements with YouTube revenues.
YouTube and GEMA also terminated the ongoing legal disputes. Both parties, however, still hold their different legal positions as to who is responsible for licensing the used musical works. YouTube refers to its users, who are uploading the music videos. GEMA, on the other hand, considers YouTube as platform operator to be responsible for paying royalties. GEMA appeals to politicians to clarify the legal situation, which is in fact already being prepared on European level.
Conclusion: As initiated by Spotify, Amazon, Google Play, and Apple Music, YouTube has now followed suit and entered into an agreement with GEMA for the licensing of the works of the 70,000 German GEMA members. Authors can look forward to large payments for the past few years, but should check their statements thoroughly. This agreement should also encourage online platforms with innovative business models to enter into negotiations with GEMA. In the end, everyone is set to benefit: music users because they enjoy a large offering, music exploiters because they can legally make profits, and music authors because their source of revenue is secured despite the unstoppable digitization.