The record industry and YouTube are telling two very different stories right now.
On the one hand, YouTube claims that it paid out $1.8bn-plus to music rights-holders within the past 12 months. On the other, the record industry says that, according to IFPI data, the true figure was closer to half this amount. (YouTube claims that this IFPI data misses out approximately $900m paid directly to collection societies and for direct advertising deals with music partners.)
The divide between the two parties is even greater, however, when it comes to Article 13.
A crucial segment within the new European Copyright Directive – which was voted through by the European Parliament in September – Article 13 will essentially make YouTube legally liable for all content uploaded by its users.
As a consequence, YouTube would need to filter this user-uploaded content for copyright-infringing elements before making it available on its service.
YouTube says it already tackles this issue effectively, but only after videos are uploaded. It does so via its Content ID system – which, says YouTube, catches 99.5% of all infringing content, offering copyright holders the chance to monetize, monitor or block these videos.
“The [European] Parliament’s version of Article 13 would… [open YouTube] up to unmitigated liability and such a large financial risk that we would be forced to block huge amounts of video.”
Lyor Cohen, YouTube
YouTube also claims that Article 13 will be a disaster for its platform, for music makers and for music fans.
This argument has been amplified of late by both YouTube’s CEO Susan Wojcicki and the platform’s Global Head of Music, Lyor Cohen.
Cohen wrote in a strongly-worded op/ed yesterday (November 21) that: “The [European] Parliament’s version of Article 13 would… [open YouTube] up to unmitigated liability and such a large financial risk that we would be forced to block huge amounts of video.”
He further claimed that Article 13 – which is expected to be fully signed into EU law by the end of 2018 – would mean “less money for artists and songwriters… [and] less music for fans”.
YouTube is upping its objection to Article 13 publicly, too: pop-ups cautioning YouTube’s 1.8bn monthly users about the legislation are now appearing on the Google platform (pictured), linking through to an anti-Article 13 #SaveYourInternet homepage.
Meanwhile, YouTube also recently embarked on an anti-Article 13 trade media marketing campaign in the UK.
Now, the record industry has forcibly responded – via the UK-based BPI, which represents the commercial interests of Universal Music, Sony Music and Warner Music, amongst others.
“We’re pleased that YouTube now claims to support the premise of Article 13, that artists and labels should be paid fairly,” said BPI Chief Executive, Geoff Taylor. “However, this is difficult to square with its ongoing carpet-bombing propaganda against that provision, which feels like a challenge to the legitimacy of the democratic process.
“Article 13 has been carefully scrutinised over four years by the European Commission, Council and Parliament. These three institutions have rightly concluded that the Value Gap is real and that YouTube ought to take some responsibility for the content it publishes, just like other publishers. YouTube now seems to be trying to scaremonger the EU into reversing decisions taken after full debate, because it doesn’t like the outcome.”
“YouTube’s ongoing carpet-bombing propaganda against [Article 13] feels like a challenge to the legitimacy of the democratic process.”
Geoff Taylor, BPI
Added Taylor: “Lyor Cohen argues that ad-supported revenues are helping to fuel music industry growth. That’s far from our experience.
“Despite many billions of views, ad-supported video now generates less than half the revenue labels make from vinyl, and only one-sixteenth of the revenue from premium subscriptions. This problem needs to be fixed.
“It’s time for YouTube to respect the EU legislative process and focus its energy on working with labels to grow the value generated by recorded music, for example through its excellent new YouTube Music subscription service, rather than trying to protect an outdated safe harbour that has given it an unfair advantage over both competing services and individual musicians and creators.
“The money YouTube is spending to preserve special protections for its business would be much better spent rewarding the great music that drives users to its platform.”
Susan Wojcicki has claimed that, in a post-Article 13 world, the biggest YouTube video of all time, Luis Fonsi and Daddy Yankee’s Despacito, may never have been allowed to exist on the platform – due to “some of the rights-holders [remaining] unknown”.
Crispin Hunt, Chairman of the British Academy for Songwriters, Composers and Authors (BASCA), dismisses this argument as “a complete joke”.
He recently told MBW partner publication Rolling Stone: “Think how much ad money YouTube has made from that one video and its billions of views. Are you telling me YouTube won’t be incentivized to work out how to pay a handful of that song’s creators, even if those creators are arguing?
“Even if Article 13 kills YouTube, which it won’t, then so what?”
Crispin Hunt, BASCA
“That’s just a lame argument not to pay creators fairly — passing responsibility rather than taking it.”
He added: “Even if Article 13 kills YouTube, which it won’t, then so what? Just like what happened after MySpace, something better and fairer will quickly fill the void.”Music Business Worldwide