The two men reportedly stole $20 million in music royalties from YouTube in a well-tried ruse.
Musicians, publishers and labels earn money from the music they create in the form of royalties. This means that whenever a song is played or a song sample is used in a video, be it a movie, commercial, radio show, in-store background audio, or even online streaming, a small amount is paid to whoever does it for the mere use of the song. This rule also applies to YouTube. Sometimes with cheating.
Two men allegedly stole $20 million in music royalties from YouTube
Usually these royalties are paid to rights holders or collection agencies, but it appears that two men have managed to exploit the system and steal a hefty sum of $20 million in royalties from YouTube over the past four years, or nearly four years. At least that’s what the court documents mention, which mention a company called “YT”.
Thanks to perfect cunning
Although the name of YouTube is not specifically stated, Gizmodo explains that since it uses the same monetization and content identification mechanisms, there is a good chance that this is indeed YouTube.
That being said, at the end of this scheme, the men contacted a company called “AR”to help “YT”pay the royalties.
According to the men, they were sent by MediaMuv, a company they founded, which owns the rights to a catalog of more than 50,000 songs. They then signed a contract with AR who identified and uploaded the music, allowing them to claim royalties for those songs. For some of the titles thus identified and owned by MediaMuv, the two of us managed to raise up to $100,000.
Agents from the IRS, the agency of the United States federal government that collects income tax and other taxes, managed to put an end to the two men. They were arrested and, if found guilty, face a combined sentence of 37 years in prison and up to $250,000 for each conviction.