from the white-and-nerdy dept
Back when Google bought YouTube in 2006, one of the side notes on the deal which didn’t get that much attention was that right before the deal closed, YouTube gave a bunch of equity to the major record labels, structured more or less as a payoff in exchange for not suing YouTube for a few years. The most beautiful part in all of this for the labels, of course, was that they got a ton of free cash which they never planned to share with artists. Since the deal was done as equity, the labels could insist that it had nothing to do with royalties, and they could keep the whole amount — and they did. But, of course, if artists expected the labels to protect their interests, they were out of luck.
It seems that some artists are finally bringing this point out. We’ve covered the many, many lawsuits over the past few years where artists are suing their labels over whether or not iTunes purchases count as a sale (tiny royalty) or a license (big royalty). However, some are also bringing up other wrongs. Eminem’s producers, FBT, who were one of the first of these cases, specifically called out the fact that they never received any of the YouTube money.
And, now, Weird Al Yankovic is joining the party. In yet another one of these lawsuits about the difference between a license and a sale, Weird Al also focuses on the missing YouTube payments and points out that his song White & Nerdy was hugely popular on YouTube around the time of the buyout.
This may be a difficult legal argument to win, but if Weird Al (or, rather, his production company Ear Booker Enterprises) can show that Sony Music did the equity deal under that structure specifically to avoid paying out royalties, things could get interesting, especially for other artists whose work was popular on YouTube at the time…