Earlier this summer, MBW learned that songwriters and music publishers in Denmark were embroiled in a row with YouTube, with the Alphabet-owned platform threatening to remove music written by Danish composers from its service.
YouTube subsequently carried out that threat, with local sources now telling MBW that the takedown has affected at least half a million tracks.
Obviously, those half a million tracks could potentially have appeared in millions of videos across UGC and ‘premium’ music content on the platform.
Music videos removed from the service in the market – which are now inaccessible by residents of Denmark, but can be seen outside the country – include efforts from superstar Danish acts such as Lukas Graham, Volbeat and Mø.
The cause of the takedown is a dispute between YouTube and Koda, Denmark’s equivalent of ASCAP/BMI (US) or PRS For Music (UK), over the remuneration of songwriters and publishers in the market.
YouTube and Koda had been operating under a temporary license agreement since April following the expiration of their previous multi-year YouTube deal.
That temporary deal expired on July 31 and, due to a breakdown in discussions between the two parties, was not renewed.
Meanwhile, Polaris, the umbrella collection society for the Nordics, is negotiating with YouTube over a longer-term multi-territory licensing agreement in Scandinavia which would cover Denmark – but there’s no sign of conclusion on these talks.
Koda claims that in order to have its temporary deal extended in Denmark, YouTube demanded that the PRO – on behalf of its composers and songwriter members – agreed to a 70% payment reduction.
The PRO refused to accept these terms, meaning that the deal was not extended, and that Danish music content was blocked from being viewed on the service in the market.
YouTube argues that under its prior temporary deal with Koda (which expired on July 31), the body “earned back less than half of the guarantee payments” handed over by the platform in the first place.
In other words, YouTube is claiming that it paid Koda a lump of money as an advance on future consumption, but that the body’s repertoire was subsequently not popular enough to recoup this fee for YouTube in advertising money.
YouTube therefore made a smaller offer in guarantee payments when trying to re-up the deal.
This newer offer, according to YouTube, was rejected by Koda “on the basis that the minimum guarantee was not at the same level as the [previous] deal”. (It appears likely this is where that 70% reduction has been applied.)
“This is a very peculiar way of reasoning because it’s completely within Google’s control to regulate how they approach the local market and what the ad pressure is on the service.”
Kaare Struve, Koda
Speaking to MBW earlier this summer, Dan Chalmers, director of YouTube Music, EMEA, said: “While we’ve had productive conversations [with Koda] we have been unable to secure a fair and equitable agreement before our existing one expired.
“They are asking for substantially more than what we pay our other partners. This is not only unfair to our other YouTube partners and creators, it is unhealthy for the wider economics of our industry.”
Kaare Struve, Koda’s Director of Broadcast and Online Licensing, confirms to MBW that the disagreement centers on YouTube ad income “generated by videos that contain the repertoire [for which] we have entered into an agreement”.
However, he suggests that it is the fault of YouTube, rather than Danish songwriters and their music, that YouTube’s advertising income disappointed under the previous deal.
“This is a very peculiar way of reasoning because it’s completely within Google’s control to regulate how they approach the local market and what the ad pressure is on the service,” he says.
“Basically, they’re asking composers and songwriters to pay for the fact that YouTube has an inadequate strategy for ad commercialization.”
The dispute in Denmark bears hallmarks of a similar recent fallout in Germany.
German PRO GEMA went without a licensing deal with YouTube for seven years before finally inking an agreement in 2016.
The deal meant that scores of previously unlicensed – and therefore previously unavailable – music videos became playable in the region on YouTube.
Koda’s Struve adds: “Over the years [Google] has been more concerned with building their user base than having a very active strategy for commercialization through ad content.”
“[Koda] are asking for substantially more than what we pay our other partners. This is not only unfair to our other YouTube partners and creators, it is unhealthy for the wider economics of our industry.”
Dan Chalmers, YouTube (speaking in July)
He argues that YouTube is now “making [Koda] responsible for their own commercial strategy in relation to putting ads on content”.
Continues Struve: “For a long period of time, it has been quite obvious that their ad strategy towards the service has been far less aggressive, at least, compared to other Danish players.
“There are simply less ads, and you can easily skip them. So of course the ad income is lower and then they point to us and say, ‘Well that’s your problem'”.
Commenting further, he adds: “It’s starting slowly to dawn on politicians and the public in general that we’re talking about companies who have massive market dominance, who have a lot of muscle and that they’re willing to flex that muscle.”
Writing in a Facebook post on August 10, Denmark’s Minister of Culture Joy Mogensen writes (translated from Danish) that “it is a huge challenge for the [promotion] of Danish music that a dominant platform like YouTube (Google) removes Danish titles from the platform due to a conflict of rights between KODA and YouTube”.
She added: “This illustrates how big a problem the tech giants are in a modern media world: they can’t get around it, but they often don’t respect the content production or the markets they act on and profit from. This applies especially to music, but also to other content”.
Struve says that he hopes that a new deal with YouTube in Denmark will cross the finishing line before the end of the year.Music Business Worldwide