Women in Music 2018

IFPI Refutes Claim YouTube Paid Music Industry $1.8B, Says Figures 'Don't Match Our Own'

AP Photo/Jeff Chiu, File
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"It is difficult to get any clarity on Google's claims as it doesn't explain its methodology," says Chief Executive Frances Moore.

The IFPI is challenging Google's claim that YouTube has paid out over $1.8 billion to the music industry in the past year, saying that figure doesn't line up with the international non-for-profit's own research.--  

Last week, Google issued a report called "How Google Fights Piracy," stating YouTube has also paid out over $6 billion in total to the music business -- approximately half of which was from the the monetized use of music in videos using Content ID. But as the IFPI points out, the tech giant didn't provide much insight into how they calculated those numbers.

"We welcome Google's recognition that it and Google's YouTube need to operate responsibly and properly value creators and their work," said IFPI Chief Executive Frances Moore in a statement. "However, the figures in Google's anti-piracy paper don't match our own."

Moore continued, "It is difficult to get any clarity on Google's claims as it doesn't explain its methodology, but IFPI data shows that revenue returning to the record industry through video streaming services (including but not limited to YouTube) with 1.3 billion users amounted to US $856 million in 2017 -- less than half of Google's claim and less than US $1 per user per year.

"By contrast, a much smaller user base of 272 million users of audio subscription services (both paid and ad-supported), which don't misapply the 'safe harbour,' compensated creators some US $5.6 billion -- a little more than US$20 per user per year.

"This is the reality of the 'value gap' -- in which user-upload platforms, such as YouTube, exploit music for profit without returning fair compensation to music creators."

YouTube responded to the IFPI, asserting its numbers are correct and, in a sense, agreeing with the organization that it does not have enough information to accurately analyze the video streaming service's rights holder payouts.

"We stand by the numbers in our report," a YouTube spokesperson said in a statement to Billboard. "IFPI has a limited view of payments that we make across the industry, including to collecting societies, and our direct advertising deals with music partners."

Google's piracy report was released amidst the company's ongoing campaign to sink copyright legislation in the European Union, taking particular issue with the new Copyright Directive's Article 13 component, which requires user-generated content platforms like YouTube to implement automatic content recognition systems that would block any works infringing copyright. It also mandates they setup "easy redress" systems for works mistakenly taken down and that those platforms negotiate licenses with rights holders, effectively ending safe-harbor provisions in Europe.

In September, the Copyright Directive passed in European Parliament and now is being negotiated with members states and the European Commission -- a process that could be completed by the end of the year.

Last month YouTube CEO Susan Wojcicki warned the network's creators that Article 13 "threatens to shut down the ability of millions of people ... to upload content to platforms like YouTube." Following that, Global Head of Music Lyor Cohen outlined his views on the issue in a Q&A article with Shots Studios' founder John Shahidi, warning, "We believe that the current proposal will create severe unintended consequences for the whole industry."

The IFPI has been an ardent supporter of Article 13, as it seeks to address the "value gap" many have accused YouTube of perpetuating with a larger user base than any single streaming service but lower payouts to rights holders -- even compared to other free, ad-supported service tiers.

According to the IFPI's 2018 Music Consumer Insight Report 47 percent of all time spent listening to on-demand music is on YouTube. Furthermore, 35 percent of music streamers say a main reason for not using a paid audio subscription service is because everything they want to listen to is on YouTube.