Muzu strives for fair music video compensation

Since launching in beta last July, Ireland-based music video site Muzu.tv has secured a decent amount of recognition for its monetization priorities. The site gives 50% of the net ad revenue generated by an artist's content back to the artist (or label) without any exclusivity contracts.

Banner ads and in-video advertisements are embedded in an artist's content in the Muzu player, which is itself embeddable in sites like MySpace, Facebook, and Twitter. Anybody or any band can create a channel on Muzu dedicated to their personal music, and monetize their video content. While monetization has been somewhat problematic on YouTube, the option to make money there does exist.

Muzu takes exclusivity to a different level. The site will digitize old film and video content in exchange for exclusive hosting rights, and it even has a studio in Dublin where artists can freely film their own live shows for exclusive broadcast on the site. Record labels have thus far been keen on the deal, and Muzu now hosts content from majors Sony BMG, Universal Music Group, and EMI, as well as legendary indie labels 4AD, Matador, XL, and Rough Trade.

Guardian UK blogger Helienne Lindvall praised Muzu in April, and likened it to a Fair Trade coffee producer, where just compensation is given to those most commonly exploited.

Of course, like all money making deals in the music business, it's the math that ends up compensating for all that fairness.

While it is true that the site has been forthright with its monetization and distribution, the 50% of net revenue promised is actually considerably less. In reality, it is more like 30% because Muzu subtracts 20% of the net to cover bandwidth, storage, and payment processing. Another deduction is taken to compensate the rights societies (ASCAP, BMI, MCPS, and PRS, for example) through which most royalties must be piped. So artists will generally receive less than a third of every Euro made.

Lastly, if the inclusion of the currency didn't give it away already, payments require an international bank account (BIC/IBAN). This renders Muzu monetization effectively off limits to unsigned United States artists due to this country's incompatible banking system, unless they belong to that rare brand of starving artist that also has an offshore account.