Business: YouTube and copyright Free and easy listening
The music industry lobbies Congress to keep YouTube at bay.
IN LOVE or in business, it is not a good idea to be on the wrong side of Taylor Swift.She has slated ex-boyfriends in her songs.And last year she publicly criticised Apple Music’s plan not to pay artists during the streaming service’s launch period. Apple quickly relented.Now Ms Swift has joined nearly 200 musicians and record labels in a campaign aimed at the largest streaming service, YouTube.They complain that it gives away too much of their work for free.Their call for a change in copyright law is sure to fail, but the underlying gripe with Google’s streaming service will find sympathetic ears.Streaming of music via on-demand video services more than doubled in America last year, to 172.4 billion songs, according to Nielsen, a research firm.
Ms Swift, Sir Paul McCartney, U2 and others signed a letter, published in several Washington periodicals on June 20th, asking Congress to make it more difficult and costly for those streaming services to host versions of songs uploaded by users.Google and Facebook, among others, will vigorously oppose any change to the Digital Millennium Copyright Act, which grants them “safe harbour” from liability for copyright infringement.A more realistic goal for the music industry is to persuade YouTube to pay more for playing their songs.The service is the leading destination for on-demand music but a small source of revenue.
IFPI, a trade body, reckons that 900m people used ad-supported user-upload services such as YouTube to listen to music last year, but that the industry got only $634m from those streams.Subscription-based services, including Spotify, paid $2.3 billion to musicians in 2015.YouTube executives argue that they are creating a new source of revenue for the industry, even if it seems small now.
Many of those free-riders are unlikely ever to pay for a subscription service, they suggest.A popular user-uploaded video promotes the original work and generates ad revenue for the industry.YouTube can take down such videos, but the company notes that labels and publishers usually want to make what money they can from them.
Music executives might warm to these arguments if YouTube comes up with more cash for them.That is not out of the question.Analysts reckon YouTube collected up to $9 billion in advertising revenue in 2015, some $5 billion of which would have been due to content creators and rights-holders.
Those figures could double or even triple by 2020.By then YouTube might be making money.Alphabet, Google’s parent company, does not break out YouTube’s results but it is widely reckoned to make a loss.Three big record labels—Universal Music Group, Warner Music and Sony Music Entertainment—are negotiating new deals with YouTube that they hope will lead to a bigger slice of the pie.
Some music publishers will seek new terms soon, too.Their lobbying may not sway Congress, even with Ms Swift’s help.But it does not hurt to have the singer on their side of the bargaining table.