Summary:

The world’s biggest music label has always regarded music videos as promotional tools. But now that Vevo, the music video platform Universal co-owns with Sony, is making $150 million a year, the label agrees the indie artists who render these works deserve compensation.

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Universal Music Group has agreed to pay royalties to independent artists whose videos are streamed on Vevo, the fast-growing music-video platform the label co-owns with Sony Music Entertainment and Abu Dhabi Media.

The agreement with the biggest music label, brokered by the National Music Publishers Association (NMPA) and announced Tuesday, enables indie songwriters and music publishers to collect royalties from Vevo for the first time.

Also read: Vevo viewers down 20% year-to-year

Founded in December 2009, Vevo has grown at an incendiary pace, establishing itself as dominant supplier of video programming for Google’s YouTube platform and taking in around  $150 million in revenue last year, mostly from ad sales.

That money had previously gone to the parent-company labels, who had in earlier contracts with artists defined music videos as merely promotional tools, not revenue-generating assets.

“This is a model example of how record labels along with songwriters and music publishers can move forward together to ensure that the licensing process is more effective and efficient, and that all creators are fairly compensated,” said David Israelite, president and CEO of the NMPA, in a statement.

Updated:

Participating NMPA publishers will give the rights necessary for the synchronization of their music to a video. In exchange, they’ll receive royalties from the video based on a percentage of Universal Music’s receipts.

Citing unnamed individuals close to the deal, Billboard reports that the agreement calls for publishers to receive 15 percent of ad revenues generated by their videos. The deal is also retroactive back to 2008.

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