Robert Andrews, writing at paidContent.org, provides a link-rich post on YouTube’s ongoing negotiations with UK and European music collectives regarding royalties payable each time a composition is streamed on the site. Particularly interesting is the breakdown of what the “standard” royalty rates are for online on-demand streaming (YouTube evidently manages to negotiate more favourable rates than the standard) and what they translate into in terms of actual revenue for publishers and artists.
As Andrews notes, PRS for Music (the UK performing and mechanical rights society) has an on-demand streaming rate of £0.00085 per track – which means that a track played one million times in the UK via on-demand streaming merits £850 in royalty payments (which would then presumably be split among the publisher and composer(s)). GEMA, the German collecting society, has a standard royalty rate of €0.1278 (£0.11) – meaning that the same track streamed one million times in Germany results in £110,000 in royalty payments – or, as Andrews notes, approximately 130 times what is payable in the UK.
The Canadian approach is slightly different – and also much more confusing. The approach used by SOCAN in its tariffs setting royalties for online music use, such as those set out in Tariff 22A and Tariff 22F (each applicable through 2006), set a “royalty” rate which is calculated as a portion of the service provider’s revenues, rather than being a fixed amount per track. That being said, none of the existing tariffs (B through G are currently under appeal in the federal courts) apply to social networking sites or user-generated content sharing sites (such as YouTube). McCarthy Tetrault provides a useful overview of the tariffs in this short article by Barry Sookman and Daniel Glover.