YouTube is a point of contention for the current industry, though I'd argue that it doesn't draw as much fire as services like Spotify. Nine Inch Nails' Trent Reznor has said some unkind words about the video service in the past, and YouTube ripping sites have also becomes an issue.
Fortunately, YouTube Chief Business Officer Robert Kyncl says in a recent blog post that the service has paid out over $1 billion to the music industry this year from advertising alone, and "this is just the beginning."
As more advertising dollars shift from TV, radio and print to online services, the music industry will generate even more revenue from ads. In the future, the music business has an opportunity to look a lot like television, where subscriptions and advertising contribute roughly equal amounts of revenue, bolstered by digital and physical sales. 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.
So that's good, right? If you believe the numbers, yes. The International Federation Of The Phonographic Industry (IFPI) is not one of those entities that believes the numbers, and is calling this $1 billion into question. The IFPI says Google's numbers are "unexplained" and that YouTube is not paying out nearly as much as services like Spotify and Deezer is.
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.
The IFPI further calls for legislation to address the "value gap" between music rights holders and sites like YouTube.
YouTube has a history of responding to criticism as well, so we'll see if this follows suit.
[via Uproxx]
