YouTube music rights dispute escalates with lawsuit against Fullscreen

The National Music Publishers Association (NMPA) filed a lawsuit against popular YouTube (s GOOG) network Fullscreen on Tuesday, alleging that Fullscreen uses music for its videos without proper licensing agreements. The NMPA also said that it has reached an agreement with Fullscreen competitor Maker Studios to settle a similar dispute.

Fullscreen is one of a number of so-called multi-channel networks on YouTube, meaning that it combines a number of YouTube channels under a corporate umbrella to better market and monetize their videos. The company’s YouTube properties attract more than 2.5 billion monthly views. Fullscreen raised a reported $30 million Series A from the Chernin Group, Comcast Ventures and others in June.

The NMPA’s accusations against Fullscreen and other multi-channel networks aren’t new, and come down to one key issue: YouTube has struck a direct deal with the organization to compensate songwriters and publishers for the use of their music in amateur and viral videos. However, videos that are monetized by their publishers through YouTube’s partner program aren’t covered by this agreement. NMPA board member Matt Pincus put it this way in an op-ed he wrote for Billboard earlier this year:

“If a 6-year-old kid sings a song and puts it on YouTube, the writer gets paid. If she’s any good and actually obtains an audience, an MCN like Maker Studios — with $35 million in VC funding from Time Warner, the Murdoch family and others — will sign her. Then, the money stops flowing to the writer, whether the video stops streaming or not. ”

(Just a quick reminder for anyone confused by all the copyright legalese: Publishers license the rights for the composition of a song, not the actual recording. That’s why they’re so interested in cover songs.)

The NMPA said Tuesday that it has “agreed in principle to a settlement” with Maker Studios, which doesn’t sound like the two sides have actually come to any concrete terms yet.

There are also other unknowns about the lawsuit against Fullscreen. The company is unique in that it operates its own channels, but also offers various services to a network of partner channels, which means that the company is in one shape or another involved in more than 15,000 YouTube channels. It’s unclear exactly which of these channels are covered by the NMPA lawsuit, or which songs in particular the organization was challenging.

Also worth noting is that Fullscreen already has reached licensing agreements with Warner/ Chappell Music and Universal Music Publishing, two of the major music publishers. We reached out to the NMPA and Fullscreen to get more details on the lawsuit, but haven’t heard back. We’ll update this post once we know more.