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IFPI and BPI hit back at YouTube over cannibalisation report


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Did music industry bodies the IFPI and BPI have something to say about the YouTube-commissioned report suggesting that Google’s video service isn’t cannibalising higher-value streaming services? Of course they did.

The IFPI has published a statement this afternoon criticising the report – which was published by Google this morning – and reiterating its desire to see safe-harbour legislation reformed, to YouTube’s disadvantage.

“Google’s latest publicity push once again seeks to distract from the fact that YouTube, essentially the world’s largest on-demand music service, is failing to license music on a fair basis and compensate artists and producers properly, by claiming it is not liable for the music it is making available,” said the IFPI’s statement.

“Record companies invest in artists, their music and the systems that support the evolution of the digital music business – licensing more than 40 million tracks across hundreds of digital services around the world.”

“As the Global Music Report data just made clear, music fans are increasingly willing to engage with licensed streaming services. However, services like YouTube, that are not licensing music on fair terms, hinder the development of a sustainably healthy digital music market.”

The ‘value gap’ between consumption of music on YouTube and the royalties paid out to rightsholders was a theme at the IFPI’s recent launch event for its Global Music Report.

“Rather than Google/YouTube’s ‘my way or the highway’ approach, where they say they can’t behave as other digital music services do, legislative action is required to address the ‘value gap’ that is denying music creators a fair return for their work and investment so that the recent upturn will be sustainable for the long term.”

As for the BPI, its chief executive Geoff Taylor also put out a statement this afternoon to criticise the YouTube-commissioned report, but with a different angle of attack.

“Despite its misleading headlines, the data in this Google-commissioned report reinforces the fact that YouTube is having a negative impact on revenues from recorded music,” said Taylor.

“RBB’s report for Google confirms that a significant proportion of YouTube consumption would move to onto a higher value service if music were not available on YouTube. [Author] RBB’s data shows that nearly a fifth of YouTube usage in the UK would divert onto higher value platforms, such as paid subscription services.”

The BPI has been analysing the numbers to attempt to prove its point.

“If that usage were evenly distributed among YouTube’s users and 19 per cent of YouTube users chose to take out a music subscription, it would generate approximately £415 million per annum additional retail spend on music – doubling the current value of the UK streaming market,” said Taylor.

“Even if only half this number chose to subscribe, the shift would still make an enormous difference to the UK’s artists, songwriters and labels and to the growth of our digital music sector.”

Taylor went on to maintain that YouTube’s report supports the argument of rightsholders that the ‘value gap’ needs to be sorted out, rather than combats it.

“YouTube continues to rely on a legal loophole to pay only a tiny fraction of the rate that competing services such as Spotify and Apple pay for music,” said Taylor.

“This patently unfair distortion in the digital content market must be fixed once and for all, and we again call on the UK Government and on EU policymakers to clarify that online platforms must secure fair arms’ length licences for the content that they commercially exploit.”

This argument will run and run, although legislators on both sides of the Atlantic are in the process of deciding how safe-harbour laws should be modernised, with further developments in the US and Europe expected later this year.

Stuart Dredge

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