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“A billion dollars ain’t enough, mate”, IFPI tells YouTube

By | Published on Thursday 8 December 2016


YouTube was trumpeting the billion dollars it’s handed over to the music industry this year earlier this week. “Yeah, and the rest?” is the music industry’s perhaps predictable response.

“Google has issued more unexplained numbers on what it claims YouTube pays the music industry”, says the IFPI in a statement. “The announcement gives little reason to celebrate, however. 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 $2 billion, equivalent to an estimated $18 per user”.

As previously reported, YouTube’s Chief Business Officer Robert Kyncl wrote in a blog post on Tuesday: “In the last twelve 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. And this is just the beginning. As more advertising dollars shift from TV, radio and print to online services, the music industry will generate even more revenue from ads”.

Kyncl’s talking up of free streams was basically a shot at the music industry, which prefers paid-for streaming, and is busying trying to get copyright law rewritten in a way that would weaken YouTube’s negotiating hand, enabling labels and publishers to push for a deal more in line with the one Spotify signed. It was also notable that the YouTube boss was going to great lengths to big up free streaming rather than paid subscriptions, despite YouTube having a paid-for option of its own in the US.

Continuing its statement, the IFPI said: “YouTube, the world’s largest on-demand music service, is not paying artists and producers anything like a fair rate for music. This highlights more than ever the need for legislative action to address the ‘value gap’ that is denying music rights holders a fair return for their work”.