Summary:

While Viacom’s long-standing copyright lawsuit against YouTube has gotten the most press attention, there’s actually a second suit going as…

While Viacom’s long-standing copyright lawsuit against YouTube has gotten the most press attention, there’s actually a second suit going as well-a class action brought by the Premier League and other major content owners saying that the giant video site’s inattention to controlling copyright material violated the law. Now one big part of that class action suit, U.S. music publishers, have bowed out of the case after striking a deal with YouTube (NSDQ: GOOG).

Terms of the deal weren’t disclosed. The overall idea is to allow music publishers-the organizations that collect copyright payments for songwriters and composers-to identify videos on YouTube that use their compositions, and then get a split of YouTube’s advertising revenue from the video. The record labels, which represent the artists that perform the songs, already have similar deals going. (Most musical recordings have both a copyright on the sound recording and a separate copyright on the composition.)

YouTube struck this deal despite the fact that it in the actual court case, the video company won a total victory; a judge ruled that it was protected from copyright lawsuits because YouTube had followed the rules of the Digital Millennium Copyright Act, or DMCA.

In YouTube’s blog post on the settlement-in which the word “lawsuit” is nowhere to be found-the company states that “[t]oday’s deal offers more choice for rights holders in how they manage use of their songs. Going forward, the 46,000 music publishers already affiliated with HFA will be able to license the musical compositions they represent for use by the YouTube community. When these publishers allow YouTube to run ads alongside user generated videos that incorporate their compositions, the publishers, and the songwriters they represent, can make money.”

The NMPA statement includes President and CEO David Israelite saying: “This is a positive conclusion for all parties and one that recognizes and compensates the work of songwriters and publishers going forward.”

Does this mean that YouTube might strike deals with other class-action plaintiffs, chipping away at the suit? Not necessarily. The music publishers had something real to gain here-YouTube’s cooperation in identifying and monetizing their content. There are other content owners involved in the class action suit who will still want their shot at a paycheck from YouTube resulting from statutory damages, and with little interest in an ongoing business relationship with the site.

And of course it has no bearing at all on Viacom’s lawsuit. In that case, Viacom (NYSE: VIA) says that YouTube should pay up to $1 billion in damages, because it knowingly built up its user base with pirated material. However, Viacom isn’t seeking any post-2008 damages from YouTube, suggesting that the company finds YouTube more acceptable now that it has incorporated software filters. Viacom’s case, like the class action, is being argued on appeal.

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