Update: The YouTube video published by Sharma has now been made private. We’ll update when we have more.

Earlier: YouTube star Shraddha Sharma, who was signed up by Universal Music last year, has announced that she’s changing her YouTube channel to “SupagirlShraddha“, from her earlier channel ShraddhaRockin, following a court case filed against by online video company Culture Machine. In the video, Sharma says that she used to work with Culture Machine, which used to handle her YouTube account, and following her decision to no renew her agreement with them, they’ve filed a court case against her.

We were unable to find details of the case on the Delhi High Court and Mumbai High Court websites at the time of writing this article. We’ve written to both Sharma and Culture Machine for clarifications regarding the court case.

In an emailed response to MediaNama, Culture Machine co-founder Sameer Pitalwalla has said that:

“The matter is sub judice. However, we have a signed contract with Shraddha which she has breached. We have acted well within our rights and it’s up to the courts to decide the outcome. Our intention isn’t to malign any artist, but to ensure the integrity of our contractual obligations are maintained.

We have grown the viewership and monetisation of many artists and continue to build on those relationships, as is evident by the strength of our network. Depending on their stature, different artists have different contracts and commitments, and in this case, these commitments have been breached and we had no recourse except legal.”

In an emailed response to MediaNama, Sharma has reiterated her statement:

All I have got to say is that I have no idea why they have sued me except the fact that I denied to renew my agreement with them..

And for now I am myself handling all my videos and stuff. Rest all I have mentioned in the video, I would not like to say anything beyond that.

The statement that Culture Machine decided to take her to court merely she decided not to renew her contract with them is a strange one: that is unlikely to hold up in a court of law. A breach of contract would. Also read: YouTube Star Shraddha Sharma Signs Album Deal With Universal; YouTube Deal With Culture Machine.

The relationship between artists and MCN’s

This is an interesting situation, because it brings to light the relationship between YouTube Multi Channel Networks and YouTube stars, over ownership of channels. YouTube artists have varying relationships with MCN’s:

– The YouTube star owns the channel and the content, and the MCN manages it
– The YouTube star creates content for the MCN, and the MCN owns the content
– The YouTube star creates content for the Channel, but the MCN owns the channel, but not the content

Essentially, every deal can be different, and the relationship between the MCN and the YouTube channel depends on the negotiating ability. When we had asked Pitalwalla about whether deals are different with each content creator or whether they have a standard contract, he had declined to comment.

MCN’s provide significant value to stars: they leverage their network and knowledge of YouTube to help the artist grow the base, and at times, provide infrastructure such as a studios to help the artist record. The artist brings content to the network, and helps the network work with brands for promotion. Typically, the artist hands over the details of the channel to the MCN to manage. This gives the MCN control. The MCN takes around 55% of the revenue earned through YouTube advertising, while YouTube keeps 45%. Typically, the MCN takes 30% of the revenue earned from YouTube, and 70% goes to the artist.

From our earlier story:

shraddha-sharma-sm

Sharma is from Dehra Dun, and uploaded her first video in April 2011. Since then, she’s got 129,873 subscribers on YouTube with 10.3 million views, 1.5 million likes on Facebook, and even been featured in an MTS advertising campaign. During an event held on the sidelines of the Nokia Music Connects event, she also repeatedly thanked Culture Machine for the work done her videos…  Speaking with MediaNama, Pitalwalla told MediaNama that they’re managing her entire YouTube and Social Media presence. “She’s a star because of her digital presence. We grew Shraddha’s viewership four times from the time she joined the Culture Machine Network. Her subscriber base grew from 40,000 to 1,30,000 on YouTube, and on Facebook from 100,000 to 1.5 million likes.”

Oops.

What happens when an artist quits?

The tricky part is: what happens when an artist decides to quit? So:
– who owns the channel: the artist or the MCN?
– who owns the music or the content on the channel, and can an artist upload the same videos on their new channel?

These details (and more) need to be decided before a contract is signed. The music business has a history of vague contracts, and uncertain terms of the deal, which have led to ambiguity in relationships.