There is a huge gulf between what GEMA (Germany's music royalty organization) wants, and what Google is willing to pay. Google seems to think the music business needs YouTube more than YouTube needs the music business, and so it would rather block music videos from Germany than pay GEMA's proposed rate. The development echoes a similar blockade of music videos in the United Kingdom, which Google put into place earlier this month.
Hamburg-based Google spokesman Hennig Dorstewitz told Billboard, which first reported the story, that GEMA eventually wants a whopping $0.16 each time a German user hears a song on YouTube -- an unsustainable rate given today's advertising market. By comparison, imeem is struggling to pay its on-demand rates, believed to be at most $0.01 per stream.
GEMA CEO Harald Heker told Billboard that his organization offered YouTube an interim rate of approximately $0.013 per song, and that Google declined to pay it. As a result, residents of Germany who want to watch music videos -- or user-generated videos featuring songs that Google's audio fingerprinting technology can identify -- will either need to watch them somewhere besides YouTube, or use a proxy server that makes YouTube think they are in another country.
In addition to this squabbling over the per-song licensing rate, GEMA accused Google of a lack of transparency when it comes to which songs were played, and how many times they were played. Without that information, the organization says, it cannot figure out how to divvy up the licensing money from YouTube.
That will no longer be a problem -- at least until GEMA and Google come to a new agreement.