YouTube pens defence to latest attacks on music royalty payouts by comparing itself to radio
YouTube has suffered a growing number of attacks over the past few months in relation to the royalties it pays out to artists.
The IFPI summarised the issue as being one of a “value gap” between what is paid out by YouTube and what is paid out by subscription services. And the gap is very, very wide.
YouTube has now decided to tackle some of these accusations head-on, as the company’s head of international music partnerships Christope Muller penned an article on The Guardian to explain the company’s position.
Muller hits back at the idea presented by both artists and the IFPI that safe harbour rules enable companies to have a ‘lax’ attitude towards users uploading copyrighted material. He reiterates that YouTube takes copyright management extremely seriously, and that it is successful at monitoring and monetising music usage across user-generate videos, pointing to a viral user-generated video propelling “The Sound of Silence” back to the Top 10 Hot Rock Songs last month.
YouTube claims that 99.5% of music claims are automated thanks to Content ID, and with 99.7% accuracy. If the statitstics are accurate, this is probably a fair claim. Safe harbour was paramount in YouTube's early days, but Content ID is making it easier to ensure that copyrighted content can be taken down or monetised, depending on the rightsholders' preferences.
The most interesting moment in Muller’s letter however comes when he discusses the payouts YouTube makes. He states that YouTube is not comparable to Spotify, and should instead be compared to radio.
First, he states that in the US radio pays nothing to artists, and in countries where radio does pay royalties, YouTube pays at least twice as much.
Second, he states that YouTube, just like radio, should also be seen as a promotional tool.
Third, he states that YouTube is “giving” artists data they can use to plan torus and secure deals.
Sadly, all of these arguments are flawed.
First of all, YouTube’s only similarity with radio is that it is ad-supported. The experience is entirely different, YouTube is an on-demand channel where users can go and pick exactly the tracks they want to hear rather than having to accept whatever DJs send their way. From that angle, the comparison with radio seems way off.
Second, stating that YouTube is paying “twice as much as radio” is purely shifting the blame on radio for paying nothing (in the US) or too little (in other countries), but does not justify why the rates YouTube is paying are so much lower than Spotify’s (unless you accept the argument that YouTube is ‘radio’ above).
Third, whilst data is an important carrot (Pandora also using data to improve its relationship with artists), it cannot be equated to a form of “payment”, as Muller appears to do in the article, and a way to justify lower royalty rates.
Finally, in the letter Muller seeks to dispel the notion that YouTube spend most of their time watching music, by stating that the average YouTube user spends just one hour watching YouTube a month, comparing it to the 55 hours spent listening to music by a Spotify subscriber.
However, even moving past asking how an “average” user was defined (did they simply divide the total time spent on YouTube watching music by the total number users or is there a more complex calculation at play?), the more interesting number would have been how many hours of content the average YouTube user spend watching videos full stop, compared to the time spent watching music. That is the real measure of music’s importance to YouTube, not a comparison with what is happening over at Spotify.
In conclusion, it seems like this piece in defence of YouTube - the argument on Content ID aside - has raised more questions than it answered, and if anything confirmed that the company’s attitude towards music not the one that artists, labels and music lovers would like to see.