But many of the arguments don’t do justice to the partnership YouTube has built with artists, labels and the fans who support them. So let’s attempt to cut through the noise.
First, let’s start with where we agree. Music matters. Musicians and songwriters matter. They deserve to be compensated fairly. We believe this deeply and have partnered with the music industry for years to ensure it happens on our platform.
That’s why it’s surprising to see those same labels and artists suggest that YouTube has allowed a flood of “unlicensed” music onto its platform, depriving artists of revenue.
The truth is that YouTube takes copyright management extremely seriously and we work to ensure rightsholders make money no matter who uploads their music. No other platform gives as much money back to creators-- big and small-- across all kinds of content.
Decades ago, fans shared their favorite songs or performances on mixtapes. Then the sharing moved online. This was all considered piracy, costing the industry billions.
Today, thousands of labels and rightholders have licensing agreements with YouTube to actually leave fan videos up and earn revenue from them. They agree that a world where fans express love for their favorite artists by uploading concert footage and remixes is something to be celebrated. And they see that fan-uploaded content can be a way to drive exposure and boost sales; just this month, a funny video of a Ben Affleck interview helped propel Simon and Garfunkel’s “Sound of Silence” to the Top 10 Hot Rock Songs chart fifty years after it was released.
All of this is possible because our technology, Content ID, automates rights management. Only 0.5 percent of all music claims are issued manually; we handle the remaining 99.5 percent with 99.7 percent accuracy. Today, the revenue from fan-uploaded content accounts for 50 percent of their revenue.
The next claim we hear is that we underpay compared to subscription services like Spotify. But this argument confuses two different services: music subscriptions that cost $10 a month versus ad-supported music videos. It’s like comparing what a cab driver earns from fares to what they earn showing ads in their taxi.
So let’s try a fair comparison, one between YouTube and radio.
Like radio, YouTube generates the vast majority of our revenue from advertising. Unlike radio, however, we pay the majority of the ad revenue that music earns to the industry. Radio, which accounts for 25 percent of all music consumption in the US alone and generates $35 billion of ad revenue a year, pays nothing to labels and artists in countries like the U.S. In countries like the UK and France where radio does pay royalties, we pay a rate at least twice as high.
Instead of talking about a “value gap,” we should be focusing on a “value shift;” if the ad revenue currently spent on radio instead flowed to online platforms, it would double the current size of the music business.
The decades-long argument radio makes for not paying artists is that it’s a promotional tool, raising awareness that artists use to cash in elsewhere. But YouTube offers promotion, too—promotion that pays. And that gets at another argument the industry is making: YouTube hurts emerging artists most.
Every musician knows how challenging it can be to get a deal with a label or their song heard on the radio. YouTube is one of the only platforms that allows anyone to get their music heard by a global audience of over one billion people. And it allows artists like Justin Bieber, Tori Kelly and Macklemore to explode from obscurity to build a massive community of fans that generates hundreds of millions of dollars for the industry.
YouTube also gives artists data they can use to plan tours, land press and even secure record deals. We believe that transparency is critical to ensuring the music industry works for artists. We’re engaged in productive conversations with the labels and publishers around increasing transparency on payouts which we believe can answer many artist concerns.
The final claim that the industry makes is that music is core to YouTube’s popularity. Despite the billions of views music generates, the average YouTube user spends just one hour watching music on YouTube a month. Compare that to the 55 hours a month the average Spotify subscriber consumes.
Make no mistake: regardless of the amount of time people spend watching music, we still feel it’s core to YouTube. That’s why we worked with labels and publishers to build and implement Content ID. It’s why we created a model that offers promotion that pays—to date, we have paid out over $3 billion to the music industry and that number is growing significantly year-on-year. And it’s why we created a custom YouTube Music app and recently introduced YouTube Red, our own subscription service, so that we could drive even more revenue to musicians and songwriters.
It’s these investments and strong ties that demonstrate our love of music and our commitment to strengthening the industry. And while there may occasionally be discord, history shows that when we work together, we can create beautiful harmonies.
Christophe Muller, Head of YouTube International Music Partnerships, recently watched carpool karaoke with James Corden and Justin Bieber
