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First distribution of collections arising from the Youtube agreement

First distribution of collections arising from the Youtube agreement
According to the reports on music use by Youtube, music from SUISA members is mainly played in the following countries outside Switzerland: Germany, France, Poland, Italy and Great Britain.
Photo: Manu Leuenberger
Text by Andreas Wegelin, CEO
With its online settlementof June 2015, SUISA distributes collections based on the Youtube agreement for the first time. Income from 5 quarters is included in the payout. The total distributed amount is roughly CHF 300,000. The aim is not just to pay out for titles with advertising turnover but for all used and identifiable works, depending on the click rate.

The agreement between SUISA and Youtube has now been running in its second year. The agreement covers direct licensing for exploitations in 43 countries. It does, of course, cover the usages in Switzerland. For the repertoire of SUISA members, the usage from 42 additional countries is being licensed. The territory covered by the agreement includes, apart from the whole of Europe, also countries in Asia and Africa.

With its online distribution of June 2015, SUISA distributes collections based on the Youtube agreement for the first time. These licence fees and usage reports have been submitted since the beginning of the agreement from autumn 2013 to the end of 2014. From the respective 5 quarters, a total amount of about CHF 300,000 is available for distribution.

Elaborate development of the reporting system

Videos with musical contents as well as films created by users themselves with music in the background (“user generated content”) are accessible via the Youtube platform. The elaboration of a suitable reporting system with the new contractual partner turned out to be complex. The basic principle of the reporting process applied at Youtube is explained in the SUISAblog article “Why SUISA members do not have to submit registrations, if their works are on Youtube”.

The main challenge for the processing of the usage reports submitted by Youtube is not just the enormous data volume but also the data quality – especially that of the “user generated content”. Videos by private users hardly contain information on the used (music) material. This segment, which Youtube calls “non music”, could not be identified due to a lack of exact data. As a consequence, no money will be allocated to these segments.

Things are different, however, for the so-called “music” segments: For the 15-month distribution period, SUISA has processed reports on music use by Youtube with approximately 3.2m different videos, with a total of 1.7bn clicks between them. Of the latter, 590.2m clicks relate to the repertoire distributed by SUISA.

Distribution of Youtube collections

Wherever it was possible to directly link advertising revenue to a video with identified music the income will be distributed for this video, resp. the music contained therein. This means: A music video has generated income via advertising. The video contains a single work which could be identified by a music usage report from Youtube and is has a complete registration in the SUISA works database. The income generated by the video will be paid out to the rights holders of the individual video.

Further works in videos from the “music” segment, which could be identified, obtain a share of the remaining income from the Youtube agreement in line with their click rate. The distribution amount per click for the distribution period is CHF 0.0008. In comparison, SUISA could pay out an average amount of CHF 0.0018 per stream in the second Spotify distribution which is also taking place now, i.e. more than twice as much.

Just like the contracts with other online music providers, the Youtube agreement will be subject to a periodic review. The impending negotiations to renew the agreement will provide an opportunity to hold discussions on the reporting of data for the identification of the music contents of our repertoire and of course the financial conditions of the licence for Youtube. So that authors will get their fair share for the usage of their works on the biggest global video platform.

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