San Francisco — In an attempt to streamline payments to musicians and publishers, Google owned video-sharing network YouTube said it acquired RightsFlow Inc., a small company that specializes in helping artists and labels license and tracks and processes royalty payments to songwriters and music publishers.
Announcing the acquisition in a blog post, YouTube’s product manager, David King, said that it would not change YouTube for regular users; the video platform will integrate RightsFlow’s database and technology into YouTube to help match songs to their publishers so that they can be properly reimbursed.
“As new ways of enjoying music have emerged, RightsFlow has been at the forefront of solving the complex issues of licensing and royalty payment management,” YouTube wrote in a blog post. “By incorporating RightsFlow’s expertise and technology with YouTube’s platform, we hope to more rapidly and efficiently license music on YouTube, meaning more music for you all to enjoy, and more money for the talented people producing the music.”
This acquisition empowers video-sharing service YouTube access to technology to help it administer its relationship with one of the most fragmented and cumbersome parts of the music industry: music publishing. Music publishing concerns the copyrights on songs’ lyrics and melodies, as distinct from a particular recording of a given song.
According to the New York Times, it can be a tedious task to keep track of music on YouTube because there is no central database for publishers and songwriters. Becoming a huge hit on YouTube, however, could result in a huge payday for the artist.
Music publishers have long earned money collecting large numbers of small royalty payments. That influence has been accelerated as music consumption has moved from CD sales and commercial radio airplay to digital downloads and online streaming via YouTube and services such as Spotify AB.
YouTube is already featuring millions of music videos on its site, some original and many less so, and uses its homegrown Content ID system to classify which is which. The rights and licenses issues to creative works can often be complicated, but RightsFlow makes that detection system much more powerful and provides a better answer to, “And then what?” when it finds a copyrighted song.
YouTube said it has invested “tens of millions of dollars” in its content management technology like Content ID, but the video-sharing site has occasionally had a contentious relationship with publishers over royalty payments, disbursement of which can sometimes be a complex process.
With this acquisition, when Content ID discovers copyrighted music in a YouTube video, RightsFlow can determine what may be owed to the rights holder, and provide an easy way to collect. Moreover, a single CD sale might generate around $1 in publishing royalties, an individual song download generates a royalty of about 9 cents. A single stream of a song on YouTube or Spotify generates just fractions of a cent for the writer of the song.
New York-based RightsFlow has functioned as a licensing and royalty service provider since it was launched in 2007, uses a 30-million-song database and proprietary technology to match songs to publishers and manage payment. The company has prioritized the mission of streamlining the licensing process as effortless as possible for everyone involved in the production and distribution of music. Patrick Sullivan, President and CEO of RightsFlow, celebrates the acquisition in an official release:
We’re pleased to now be taking a momentous step with the team at YouTube, that shares in our vision of solving the really challenging problem of copyright management. Combined with the worldwide platform and reach of YouTube, we’ll now be able to drive awareness, adoption, and licensing success to a much larger audience — ultimately benefiting users, artists, labels, songwriters, publishers, and the entire global music ecosystem.
Managing royalties amid such fragmentation has proven a pretty cumbersome process. In the RightsFlow statement, Sullivan said YouTube “shares in our vision of solving the really challenging problem of copyright management.”
Terms of the deal were not revealed. Though, a Google spokeswoman turned down requests to make executives available or to comment beyond statements posted on a YouTube blog and RightsFlow’s website. The statements did not say how, if at all, the Google acquisition could affect RightsFlow’s working relationships with other online music services.
More details can be found in the video YouTube provided that demonstrates how Contend ID works:
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