YouTube is the world's largest music streaming service, which means it has to pay performance royalties to artists in hundreds of territories, a time-consuming and bureaucratic process that often results in artists never seeing a dime.
Well, that's about to change. AMRA, the global licensing and royalty collections arm of the music publishing and administrative services firm Kobalt, announced Monday that it has entered a global deal with YouTube, which will enable AMRA to give YouTube licenses to AMRA artists’ songs on a global scale, and for AMRA to collect artists’ performance royalties for performances all over the world.
“Many creators are missing out on digital revenue without even knowing it,” Kobalt CEO Willard Ahdritz said in a statement. “AMRA’s global deal will help ensure that Kobalt clients are paid as quickly and accurately as possible, as well as help stimulate growth for the whole industry.”
In years past, a music publisher that wanted to collect the money it was owed for performances of its songs in a certain country had to register its catalog of songs in each country with an organization normally referred to as a copyright collections society, which would collect royalties and send them to publishers. On the flip side, a business that wanted to play songs in some capacity had to license the right to do so from those societies.
The rise of services like YouTube, which enables people to stream music in every country in the world, makes this process much more complicated, time-consuming and expensive, with fees and administrative costs sometimes exceeding the money earned from the streams themselves, which pay royalties that typically amount to fractions of pennies. “We can’t spend five dollars to collect one dollar,” Ahdritz told International Business Times. “It doesn’t make sense.”
Ahdritz stressed that AMRA, which Kobalt purchased this year, isn’t looking to cut out those societies, which still collect monies from hundreds of thousands of transactions. “We don't cut out societies,” he said. “We just have one new one that is fit for multiple data-service providers.”
YouTube, which is available all over the world, is in some ways in a class by itself. But as more and more people begin streaming music around the world, the number of services that might use services like AMRA's is growing. Since launching in Sweden in 2008, Spotify is now available in 58 countries around the world; Deezer, the French streaming service that recently filed for an IPO, is available in 160. And at the end of June, Apple Music announced it would soon be available in 100 countries; in August, AMRA and Apple Music signed a deal.
Kobalt is not the only player to notice that the world of music is flattening. In June, three of the largest collections societies in Europe – the U.K.’s PRS for Music, Sweden’s STIM and Germany’s GEMA – announced they were combining forces to create a one-stop licensing and royalty processing hub that would represent the interests of 250,000 songwriters.