The battle between the music industry and YouTube continues.
According to new data from RIAA (Recording Industry Association of America), revenues from recorded music in the U.S. grew 11.4% in 2016 to 7.7 billion. Paid streaming music subscriptions (such as Spotify and Apple Music) have instigated the music business to encounter its biggest gain since 1998. Streaming platforms have generated a majority of U.S.’s music industry revenues.
However, according to Cary Sherman (chairman and CEO of RIAA), not all streaming services are able to recognize the value of music. This is especially important because physical CD sales and download sales are declining. The remaining pillar of sales in the music industry (music streaming) needs to be sufficient enough to compensate for the loss of CD sales and downloads.
YouTube has been at the forefront of not compensating artists fairly. In a recent essay, Sherman wrote:
“For example, it makes no sense that it takes a thousand on-demand streams of a song for creators to earn $1 on YouTube, while services like Apple and Spotify pay creators $7 or more for those same streams. Why does this happen? Because a platform like YouTube wrongly exploits legal loopholes to pay creators at rates well below the true value of music while other digital services — including many new and small innovators — cannot.”
YouTube, a popular social media platform known for streaming videos, paid 1 billion dollars in advertising royalties alone in 2016. On Tuesday, December 6, 2016 YouTube’s Official Blog published a post titled “A billion reasons to celebrate music on YouTube”. The post was written by Robert Kyncl, Chief Business Officer of YouTube:
“Even as music subscriptions have been growing faster than any other subscription type, advertising is another powerful driver of revenue. In fact, in the last 12 months, YouTube has paid out over $1 billion to the music industry from advertising alone, demonstrating that multiple experiences and models are succeeding alongside each other.”
Kyncl suggests that YouTube is among subscription services such as Spotify or Apple Music. While YouTube and platforms like Spotify may share a similar amount of users streaming music, they are not sharing fair revenue.
Spotify is paying 18 times as much as YouTube in music revenues. The platform is contributing to a value gap, which is affecting artists and producers around the world.
John Blewett of Global Major Trade says:
“With 800 million music users worldwide, YouTube is generating revenues of just over US$1 per user for the entire year. This pales in comparison to the revenue generated by other services, ranging from Apple to Deezer to Spotify. For example, in 2015 Spotify alone paid record labels some US $2 billion, equivalent to an estimated US $18 per user.”
On YouTube, users are able to illegally upload music that they do not own. When it comes to taking down videos that feature copyrighted music on YouTube, the process is quite slow and lengthy.
Artists, such as Pearl Jam and Abba, have spoken out to U.S. Congress about reforming “safe harbour laws”. Presently, users cannot be penalized if they upload copyrighted material.
A letter to congress fighting for a change in the Digital Millennium Act, signed by several artists such as Taylor Swift and U2, summed it well: “Aspiring creators shouldn’t have to decide between making music and making a living. Please protect them.”
The issue at hand is that the Digital Millennium Act was created over twenty years ago, at a time where the technology and media platforms such as YouTube did not exist. As time changes and technology advances, congress should to take this into consideration and realize how this affects music creators. Hardworking artists, producers and songwriters are losing money daily because of how much music is streaming on the web at no cost, especially on platforms like YouTube.