Music Industry Disputes YouTube’s $1 Billion Payout
On Tuesday, YouTube announced that it paid out more than $1 billion in ad revenue to the the music industry over the last 12 months. “As more advertising dollars shift from TV, radio and print to online services, the music industry will generate even more revenue from ads,” wrote Robert Kyncl, YouTube’s chief business officer, in a blog post. Today the the International Federation of the Phonographic Industry, or IFPI (a trade group representing the global record industry), took issue with YouTube’s announcement. In a statement, the IFPI called the $1 billion figure an “unexplained” claim. The organization also reiterated the record industry’s argument earlier this year that YouTube pays an unfair rate for music due to a “value gap” under existing law. Read the IFPI’s full statement below.
Google has today issued more unexplained numbers on what it claims YouTube pays the music industry. The announcement gives little reason to celebrate, however. With 800 million music users worldwide, YouTube is generating revenues of just over US$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 US$2 billion, equivalent to an estimated US$18 per user.
YouTube, the world’s largest on-demand music service, is not paying artists and producers anything like a fair rate for music. This highlights more than ever the need for legislative action to address the “value gap” that is denying music rights holders a fair return for their work.
A YouTube spokesperson directed Pitchfork to Kyncl’s statement in the blog post that shifting ad spending will boost the music industry’s ad revenue. Kyncl acknowledged in the post, “To achieve this, 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.”
Read Pitchfork’s features “The Year in Streaming 2016” and “Is the Era of Free Streaming Music Coming to an End?”
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