The Guardian: Is YouTube a music industry devil or buzz-making deityWednesday, April 20th, 2016
By Eamonn Forde
The music industry has never been shy of using exaggeration as a negotiating tactic. Its deployment long precedes the mic drop as a way to shut down a debate. The manager Peter Mensch, whose roster includes Metallica and Red Hot Chili Peppers, is only the latest industry player to slam the emergency button marked “hyperbole”. “YouTube, they’re the devil,” he claimed during a recent Radio 4 documentary about the music industry. “We don’t get paid at all.”
It’s an arresting insult that deserves unpicking. It is a relatively unoriginal diss – Michael Jackson called Sony head Tommy Mottola “devilish” in 2002 during his long dispute with the label – it is also incorrect. YouTube said in late 2015 that its parent company, Google, had generated more than $3bn (£2bn) for the music industry since its launch in 2005. The point here is that YouTube does pay, but not enough for artists, managers, labels and publishers.
This formed the basis of last week’s IFPI’s global music report, which argued that after 15 years of decline the record business is only starting to recover from a “value gap” that has threatened to sink it. IFPI said that last year an estimated 900 million users of ad-supported services such as YouTube generated only $643m in royalty payments for record labels, whereas 68 million paying subscribers to services including Spotify, Apple Music and Deezer collectively generated $2bn. (Facebook, which is heavily promoting its role as a channel for music videos, currently pays no royalties.)
YouTube responded to these criticisms by claiming that 80% of people who consume music online would never pay £10 a month for a subscription service and so the service has to be “monetised” through ads. That said, it has launched its own subscription service, YouTube Red, in the US and is expected to debut it in the UK later this year. This week it debuted the YouTube Music Foundryprogramme to help acts build their profile online. Some will consider these projects proof that YouTube is a good partner for the music business. Others will think it’s mere lip service, a cynical attempt to deflect attention from its low royalty rates.
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