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Europe's digi-boss tells YouTube to cough up proper music royalties

S'not fair, says Google

By Kieren McCarthy, 19 Apr 2016

The European Union's digital chief has told YouTube that it needs to start compensating copyright owners properly.

Andrus Ansip is currently updating Europe's copyright rules and spoke publicly about how the Google-owned video site was providing far less to copyright owners than competing services such as Spotify.

"This is not only about rights owners and creators and their remuneration," he said, according to the FT [paywalled], "it is also about a level playing field between different service providers. Platforms based on subscriptions are remunerating those authors. Other service providers do not."

YouTube currently has 800 million users (more than 25 times Spotify's 30 million) and there are roughly one billion songs available on YouTube (roughly 30 times larger than Spotify's 30 million), yet the company pays around a third of the royalties that Spotify pays (€600m ($680m) compared to €1.6bn ($1.8bn)).

Google has argued that such a comparison is unfair, since music is only a part of its content, and claimed it was helping musicians out. "Only about 20 per cent of people are historically willing to pay for music," the company argued in a recent Congressional hearing. "YouTube is helping artists and labels monetize the remaining 80 per cent that were not previously monetized."

But the service remains deeply unpopular with artists, the music industry and music streaming service for making their content widely available for free and with very little compensation.

The devil

Co-manager of heavy rock band Metallica, Peter Mensch, this week called YouTube "the devil," noting, "we don't get paid at all." In an interview with the BBC, he argued that "if someone doesn't do something about YouTube, we're screwed. It's over. Someone turn off the lights."

Also this week, the CEO of streaming service Deezer, Hans-Holger Albrecht, complained that YouTube was paying very little to music labels in comparison to his company. "When you look at services like YouTube, which has a massive distribution, it pays less than we are even paying to the music labels in terms of revenues," he told CNBC.

Meanwhile, YouTube CEO Robert Kyncl has told record labels that their problem is that they exist at all. "The artists who are signed up directly with YouTube are seeing great returns," he argued.

"Not everybody – but if you're generating a lot of viewership, you're making a lot of money."

Referring to the labels as "middle men," he implied that artists were being ripped off not by YouTube, but their agents and the music industry. "There are middle-men – whether it's collection societies, publishers or labels – and what they do is they give advances and they want those recouped. So it's really hard when there's no transparency for the artist."

Meanwhile, the EU is looking at how to give more power to the artists themselves in the digital world, and how to come up with a more uniform system for payment, rather than the wildly different systems currently in place.

Ansip admitted, however, that it was "unclear" exactly how the EU will enforce such a framework, when most of the services in question are based in the United States, and therefore outside the EU's jurisdiction. ®

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