The music industry and YouTube are set to go head-to-head this week in a crucial vote in Brussels that could force the digital giant to pay billions of dollars in fees to popular artists such as Taylor Swift, Ed Sheeran and Katy Perry.
For years the music industry has argued that YouTube exploits the lack of legal protection around music videos being viewed on its service to pay minimal amounts to artists and labels.
Artists and labelswon a key Brussels vote last month on the adoption of new copyright laws – putting them on the verge of forcing a dramatic shift in the balance of power away from the Silicon Valley giant – but on Thursday the European parliament will decide the victor.
YouTube got a bloody nose in last month’s vote but its supporters are expected to gather the 76 MEPs needed to challenge that decision and force a vote by all 751 members of the parliament.
“I think if you could pop a ‘provisional’ bottle of champagne then yes, that is what I’m doing,” said Martin Mills, founder of Beggars Group, which has represented artists including Adele, Radiohead and the xx.
“Last month’s vote was a fantastic result, but I’m sure there will be some push back. YouTube is the biggest music service, full stop, by some margin and [has] been a severe imbalance in what artists receive. It is righting a wrong really.”
Warner Music chief Steve Cooper said its deal with YouTube last year was not a “free market” negotiation, and that the new European copyright law would force YouTube to the table.
“The record industry has thoroughly negotiated deals with Spotify and Apple and so on but the problem with YouTube is that kind of discussion has not been possible,” says Mills. “For me, it is less about how much more the superstars will make than the power it will give working musicians, day-to-day artists, to strike deals to enable them to survive and be the artisan they want to be.”
Taylor Swift has led the fight for artists to get a better share of revenues in the age of the digital music giants.
In 2014, she pulled her music from Spotify, saying artists receive a tiny royalty per song playand has been the catalyst for the much better deals struck by record labels with Spotify in the past 18 months.
The outlier has remained YouTube which has well over 1 billion users who regularly watch music videos. Its immense scale makes it not just financially important but critical in hit-making in the same way MTV was in the 1980s and 90s.
“Despacito would probably not have become the global phenomenon it did without YouTube,” says Mark Mulligan, analyst at MIDiA Research.
Last year, Luis Fonsi and Daddy Yankee’s reggaeton hit took the world by storm becoming the most streamed song of all time. “YouTube is the number one place where young people discover music. If you are going to create global hits you need YouTube and it is becoming more important to musicians.”
YouTube makes money from advertising and last year paid $856m (£650m) in royalties to music companies – an estimated 67 cents from each of its 1.3 billion music lovers annually.
In the UK, record labels and artists earn more than double the royalties from the sale of 4.1m vinyl records than they did from the 25bn music videos watched on YouTube last year.
Musician Billy Bragg says the battle against YouTube is less about the potential financial windfall that artists might get, and more about making sure the new digital music power players play fair.
“We’ve all seen how, with the recent data protection legislation, the European Union has shifted power to the individual online,” he says. “Now they’re seeking to do the same for artists. All we’re asking for is a level playing field … rebalancing the power between artists and the internet tech giants who are making massive profits while paying tiny royalties.”
YouTube has made moves to mollify the industry launching a premium subscription service – two days before the crucial European vote – a move Jean-Michel Jarre, electro-pioneer and president of music body Cisac, has cynically called “indirect lobbying” to try to improve its image.
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