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YouTube's $1 Billion Royalties Are Not Enough, Says Music Industry (bbc.com) 220

YouTube said Tuesday that it has paid the music industry over one billion dollars in advertising revenue in the past 12 months. The music industry thinks that sum is not enough. From a report on BBC: "Google has issued more unexplained numbers on what it claims YouTube pays the music industry," said a spokesperson for the global music body, the IFPI. "The announcement gives little reason to celebrate, however. With 800 million music users worldwide, YouTube is generating revenues of just over $1 per user for the entire year. "This pales in comparison to the revenue generated by other services, ranging from Apple to Deezer to Spotify. For example, in 2015 Spotify alone paid record labels some $2bn, equivalent to an estimated $18 per user." In his blog post, Mr Kyncl conceded that the current model was not perfect, arguing: "There is a lot of work that must be done by YouTube and the industry as a whole. "But we are excited to see the momentum," he added.
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YouTube's $1 Billion Royalties Are Not Enough, Says Music Industry

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  • Here's an idea (Score:5, Insightful)

    by Anonymous Coward on Wednesday December 07, 2016 @02:42PM (#53441489)

    Cut out the greedy RIAA pigs and give the money straight to the artist.

    • Re: (Score:3, Interesting)

      Cut out the greedy RIAA pigs and give the money straight to the artist.

      The RIAA represents the labels and distributors. There is no requirement for musicians to sign with a label, or to use a distributor. The are completely free to go-it-alone, and many do. However, many independent artists would leap at the change to sign with a label, since 10% of something is better than 100% of nothing.

      It is common for creative people to assume that they create the only value that matters, and that marketing, promotion, and distribution are all worthless.

      • Re:Here's an idea (Score:5, Insightful)

        by AthanasiusKircher ( 1333179 ) on Wednesday December 07, 2016 @03:59PM (#53442207)

        However, many independent artists would leap at the change to sign with a label, since 10% of something is better than 100% of nothing.

        THIS. People always make the mistake of looking at high revenues that big-name artists get and dream of doing that themselves.

        But that's kinda like dreaming of playing for the NBA or NFL or whatever -- sure, it happens, but the 99% of the kids out there playing high school sports will never have a chance at those sorts of salaries.

        It is common for creative people to assume that they create the only value that matters, and that marketing, promotion, and distribution are all worthless.

        Exactly. There's this new myth of "YouTube-o-genesis" -- just put your stuff up on YouTube, and users can "discover you," and then you start raking in the big bucks, no labels or whatever needed.

        And yes, that HAS happened. But for every sudden "YouTube sensation," there are 10,000 people out there who are uploading stuff that gets 5 views only from their friends. And among those 10,000 unlucky people are usually loads of talented folks... they just need some help getting attention.

        Labels can still be a path to help that (though they're not the ONLY path). Getting a few percent of revenue from a label that actually promotes you, gets you gigs, etc., is likely a lot better than the beer money people chip in when you just sing at the local karaoke bar.

        And I hate the RIAA's abusive copyright tactics as much as anyone else here, and I'll be the first to criticize labels that do bring in large revenues for their executives and staff, but pay a pittance to artists. Nevertheless, they CAN still serve a function, and thus many independent artists still DO sign on.

        • Actually, there are exceptions to this. See also The Glitch Mob [wikipedia.org]

        • However, many independent artists would leap at the change to sign with a label, since 10% of something is better than 100% of nothing.

          THIS. People always make the mistake of looking at high revenues that big-name artists get and dream of doing that themselves.

          I've watched enough versions of Dragon's Den (or Shark Tank depending where you live) to know how important this is. So many fools hang on to 100% ownership because they can't figure out that $100% of peanuts is a worse position than 50% of a golden egg.

          Nevertheless, they CAN still serve a function, and thus many independent artists still DO sign on.

          Which is why they still exist, because they actually work.

        • by rsilvergun ( 571051 ) on Thursday December 08, 2016 @12:59AM (#53444557)
          is still more than 100% of nothing, but with some of the contracts out there the band ends up in debt paying off their "advances". 100% of 0 is better than 10% of -$100,000.
    • Cut out the greedy RIAA pigs and give the money straight to the artist.

      There's a reason that won't happen: the RIAA's skills are more important than thee artists' skills.

      There are plenty of really good musicians all over the place. The reason you haven't heard of them is because of poor marketing. The artists you do hear about have good marketing. If the RIAA dies, another marketing agent will replace them (or, a cluster of marketers).

      To make $1 million as a musician, you don't even need to sing in tune. But you do need marketing.

      • 100% correct. You can go on Youtube and see some AMAZING musicians. There are a ton. Piano players who play better than professionals who sell out concert halls. But skill isn't what makes a FINANCIALLY successful musician. You need the RIAA and their ilk for that.
        • Piano players who play better than professionals who sell out concert halls.

          I don't know about that, who in particular are you talking about?

          • by 110010001000 ( 697113 ) on Wednesday December 07, 2016 @03:46PM (#53442075) Homepage Journal
            You aren't cool enough to understand the brilliance of the underground players I am talking about, so I won't bother. As a special snowflake, my music tastes aren't swayed by marketing at all. I am real hard core and listen to music based on my deep understanding of the art.
            • You aren't cool enough to understand the brilliance of the underground players I am talking about, so I won't bother.

              Too bad, I thought you might have some interesting music to listen to. Turns out you're just talking.

        • So, we can actually talk about one concert pianist who did launch their career on youtube, Valentina Lisitsa. As you can see, she actually is quite talented [youtube.com]. Somehow she did gain popularity there, which is good for her, but if you want to make big bucks in the classical music world, you need to hook in to the system, and she did that, going on the tour circuit. She was co-opted by the system, and now she's a typical musician.
    • Cut out the greedy RIAA pigs and give the money straight to the artist.

      In line with this, I would like to see intellectual property in general redefined as a personal right of the creator of work, not any more fungible than one's right yo free speech. The effect of this would be that any third party that makes money off an artist's work would have to maintain a contractual relationship with the artist or inventor.

  • Wow... (Score:5, Insightful)

    by Anonymous Coward on Wednesday December 07, 2016 @02:44PM (#53441507)

    Comparing YouTube to Spotify.. seriously?

    How many of Spotify's users are there for music? I'm betting its close to 100%.
    How many of YouTube's users are there for music?

    • Re:Wow... (Score:4, Interesting)

      by caseih ( 160668 ) on Wednesday December 07, 2016 @03:54PM (#53442165)

      I would say it's a large percentage, actually. In fact I was astounded to find out a few years ago that college-age kids quite often listen to music exclusively on youtube while they are working on homework or hanging out in their flats. An astounding waste of bandwidth but it doesn't matter.

      But comparing percentage of users is kind of silly. Yes 100% of spotify users are there for the music. A certain percentage of youtube users are there for the music as well, but the question is how many of them in total? I would not be surprised if youtube's total viewership that was there for music at any one time was greater than spotify's.

      That said, how many billions would the record companies think is fair? 2? 10? infinity? Obviously I'd like a much greater salary too. But the market decides the fair price and if that doesn't match their greed, so be it.

  • If you don't pay me 100 billion dollars I will....

  • by nitehawk214 ( 222219 ) on Wednesday December 07, 2016 @02:46PM (#53441537)

    If you give money to the recording industry via bands with recording contracts. You are part of the problem.

    Giving those assholes money enables them to feed their greed.

    • That and desperate starving artists who signed really, really bad deals when they were young and unknown that won't let them easily break away from their publisher.

      • Except those "starving" artists aren't getting any of the money you pay for their music. There are thousands of starving artists that decided they would rather stay starving than sell out to a music label. I choose to give my money to them.

        Music is like food. It is better when it is local.

        • They would likely still be starving if they sold out. By my estimation, signing a contract infinitesimally increases your odds of hitting it big, but your odds of making a living go down significantly.

      • That and desperate starving artists who signed really, really bad deals when they were young and unknown that won't let them easily break away from their publisher.

        So perhaps the solution to this is to put some limits on what rights an artist can sign away? Sort of like Cali and their refusal to enforce employment non-compete contracts?

  • There is a crucial difference here - all of Spotify users are there for the music, while only a (small) percentage of Youtube users are using it to listen to music. If we take the actual count of users who use Youtube to listen to the music, the royalty per year would be quite a bit more. Of course MPAA is probably next in line for the handout, so Youtube should be careful there.

    • There is another difference too: The spotify users are willing to pay.

    • "With 800 million music users worldwide" sounds like the MAFIAA already thought of that. However, I don't trust their estimates.

      As sibling mentioned, other services have a majority of paid users. I don't think YouTube red has caught on to that extent, and that seems like the obvious disparity. And users aren't streaming YouTube music for hours in a row.

      YouTube is just not targeting continuous streaming users, and I think that is audience behavior at this point. Users come for music videos or lyric videos or

  • You're talking about two entirely different things. One is a dedicated music service where users listen to music exclusively for hours on end. Another is a video service where people might occasionally go listen to a song, amongst the other videos they might watch that do not contain third party copyrighted music content. So comparing the amount per user is a bit like apples and oranges.

    This should be straightforward...number of views on licensed content times amount per view, maybe on a sliding scale

    • by tepples ( 727027 )

      amongst the other videos they might watch that do not contain third party copyrighted music content

      Or do they? Even if a video is ostensibly 100 percent original, how does the composer of the video's background music know that he or she isn't subconsciously infringing one of the millions of copyrighted musical compositions in existence?

  • $0 is what is owed (Score:5, Interesting)

    by OrangeTide ( 124937 ) on Wednesday December 07, 2016 @03:05PM (#53441699) Homepage Journal

    It's my opinion (IANAL) that YouTube owes the music industry nothing. And when you start paying the local thugs some protection money, they'll keep coming back to ask for more.

    The music industry should bear the entire responsibility of chasing down individual YouTube users, and Google should wash their hands of the whole thing. I think that $1B would be better spent offering legal services to users that are under attack.

    Make this like the Cold War, where each side tries to outspend the other. Music industry's global revenue is somewhere around $15B, and Google's is around $17B. If each organization were to play a very costly game of chicken, only Google would have the possibility of walking away from the wreak. In a mutually assured destruction scenario, that means Google wins because their destruction isn't assured. Once that thought experiment is out of the way, only then should negotiations between the two sides begin.

    • The thing is that Google already deletes videos which copyright infringe, for both video and audio. Legally, I do not see how they owe them anything. Do all major sites pay RIAA money?

      • by H3lldr0p ( 40304 )

        Legally, you'd be wrong.

        Music streaming is done in the US under a permissive, compulsory license. In the vast majority of cases the steamer will need to sign up with BMI or some other entity that will audit your counts and to whom you pay. They will further distribute the money as per the rate that the Library of Congress sets. The last change in those was in 2014, with another rate hike set to go in this year and again in 2020.

        YT and Google however, negotiated directly with the labels instead.

        The DMCA take

        • But they do not get anything in return. This money they are paying the music industry does not make it legal for them to stream any music, to anyone. All copyrighted music that Youtube or anyone else detects gets removed. Are you saying that the music industry owns some patent on audio streaming, and for a youtube videos to have sound they have to pay the RIAA for that right?

    • If each organization were to play a very costly game of chicken, only Google would have the possibility of walking away from the wreak.

      Except the record companies have the law on their side, and your idea is merely created of out fairy dust. Except for that it sounds great.

  • You can say greed, or whatever all you want. But the fact is it's their content and they should be able to dictate the terms that it is consumed. While you can argue that its all about money, it's really not. It's about control of what they produce. Now that control will translate into money at some point, but the content owners should be the ones setting the terms how that is done.
    • It would be less about greed if the RIAA gave a larger piece of the pie to the people who actually created the music in the first place. When the RIAA gets the majority then it looks like they're being greedy about it.

      • Not relevant. They own it, they should be able to control it any way they want. Don't like the system, don't consume from it.
        • by tepples ( 727027 )

          Don't like the system, don't consume from it.

          How can I avoid the system when the local grocery store licenses the system's music to play over its speaker system?

          And how can I avoid the system when writing my own music? Is there an accepted way for a songwriter to avoid accidentally infringing the system's copyrights?

        • No, it actually is relevant. They've created a de-facto monopoly by buying up as many smaller labels as they can where they are the major player in the industry, it is hard for a band to do anything if they don't cooperate. As a result, the contract terms are famously one-sided because, again, they have the leverage to essentially dictate whatever terms they want. The only reason they own the music that other people write and produce is because that is what they demand in order for the musicians to be al

    • by sl3xd ( 111641 )

      But the fact is it's their content and they should be able to dictate the terms that it is consumed.

      A good is only worth what a buyer is willing to spend.

      I can say my turd is worth fourteen trillion dollars, and try to get listed as the richest man alive, but unless somebody is willing to spend that money for my effluent, the rest of the world would rightly laugh in my face.

      The same is true for copyright holders. They may think they have something worth billions, but it's ultimately only valuable if buyers

      • So don't consume it. Price them out and let them go out of business. You don't own the rights, its not your decision. It's there. If that means they go out of business, then that's how it works. You don't have some right to consume it just because you want to.
    • You have a point, but I think it's been covered elsewhere already.

      RIAA Bans Telling Friends About Songs
      http://www.theonion.com/articl... [theonion.com]

  • by Tablizer ( 95088 ) on Wednesday December 07, 2016 @03:12PM (#53441761) Journal

    Technology and globalization have "cheapened the middle" of almost every industry. Get used to it.

    The most popular performers will do well, and even get bigger access to global markets, but the middle-ground is being hollowed out because the Internet gives consumers more choice and more access to old-but-good material. And, many amateurs give out works for free either to promote them or because money is not their goal. This gives for-profit performers competition who work for peanuts.

    Concert, venue, wedding, and bar performances are probably the best source of music wages, not recordings.

    The rich get richer, the rest stagnate. Welcome to the club!

    • Concert, venue, wedding, and bar performances are probably the best source of music wages, not recordings.

      This is my thought, too. If you want to make a living in music, get used to gigging.

  • by c ( 8461 )

    Thought so [slashdot.org].

  • Somewhere, in a plush office, a lowly functionary told a music industry big wig that they got $1 billion from YouTube. He quickly demanded more.

    "Why make one billion dollars, when you can make [pinky to lip] one MILLION dollars?"

  • by uncoveror ( 570620 ) on Wednesday December 07, 2016 @03:43PM (#53442043) Homepage
    The recording industry is as obsolete as buggy whip manufacturers, and pop music is something frivolous that is highly overvalued. That billion is way too much.
  • by zerofoo ( 262795 ) on Wednesday December 07, 2016 @04:06PM (#53442253)

    I'd love to see the day where Google says fine - we can't agree on a price therefore, we will remove all your copyrighted content from Youtube.

    The best way to handle a bully is to stand up to them. The RIAA needs Google far worse than Google needs the RIAA.

  • If the RIAA shrinks down to a minimal number of middlemen from lack of money (I guess those people would go to work in regular finance or something their skills would apply for), is this enough to keep the world's musicians able to make new songs and live in modest comfort?

    How many people does it actually take to record a decent sounding album? I had the impression, from my friends with their amateur semi-pro bands, that it just takes a few. You need the musicians, some instruments, and a booth in a place

  • This is just the RIAA trying to alter the licensing deal in place with U-Tube. Yea, they want a bigger piece of the pie and I don't blame them for asking. However, in all negotiations there comes a point where you have to realize that there are just some bargains that cannot be made or you risk killing the deal and giving up all your gains. RIAA seems to be dangerously close to this point to me.

    So, if the RIAA wants to kill one of their golden egg laying geese by overloading U-Tube with license fees, it'

  • We need to stop IP greed. Instead we should shift to merit model. We need a licensing and pricing body in the US like they have in UK.
    In the UK the government sets prices for IP and there is no restrictions on who can license. There is no right to refuse service. You can't charge one person one price and another a second price.

    For YouTube there should be something like a tribunal/committee where all cards and analysis are laid on the table and then they decide the price according to public benefit (aka the

  • by kimvette ( 919543 ) on Wednesday December 07, 2016 @10:24PM (#53444123) Homepage Journal

    For the music industry, there is no such thing as "enough profit." If someone else is getting a tiny sliver of the pie, or if they are missing out on a few crumbs of the pie, the music industry demands to be compensated with several full pies.

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