YouTube has been aggressively vocal in its opposition to the European Copyright directive, which was approved by the European Parliament in September — particularly its Article 13, which makes the platform YouTube legally responsible for any copyright-infringing material uploaded by its users. As the European Parliament negotiates with the European Council and Commission to finalize wording for the directive, the streaming giant has amped up its efforts.
In a blog post last month, YouTube CEO Susan Wojcicki wrote that Article 13 “threatens to shut down the ability of millions of people — from creators like you to everyday users — to upload content to platforms like YouTube.” She also singled out Luis Fonsi and Daddy Yankee’s massive global hit “Despacito” as a song that might never have been posted onto YouTube under Article 13 because “some of the rights holders remain unknown.”
YouTube Music chief Lyor Cohen doubled down on that stance in a strongly worded 900-plus word op-ed published Tuesday in the U.K.’s Music Business Worldwide (the company also took out a wrap-around advertisement in the current issue of the U.K. publication Music Week).
Industry executives in Europe and the U.S. shared strong opinions with Variety about Cohen’s post, in which he says, among other points:
*under the current version of Article 13, “artists, labels and the entire music industry … will make less money from YouTube, not more. Emerging artists will find it harder to be discovered and heard on a global stage.”
*YouTube has “paid the music industry over €5 billion to date from ads alone and over €1.5 billion in the last 12 months also from advertising revenue”;
*that a “lack of transparency between the money YouTube pays to labels and the money artists see in their pocket” exists, and proposes “To fix this, we commit to disclosing revenue earned on YouTube to artists and songwriters directly IF their labels and publishers waive their contractual prohibitions that prevent us from doing this. We welcome more transparency so we can put to rest false accusation from the IFPI and others about our payments”;
*that “Well over 50 percent of music has some portion of unknown ownership,” and that “publishers can block content that does not have complete copyright information,” thus Article 13 would “[open] us up to unmitigated liability and such a large financial risk that we would be forced to block huge amounts of video.”
In response, American Association of Independent Music CEO Richard James Burgess told Variety, “YouTube isn’t wheeling out Susan Wojcicki out of concern for artists. They are trying to protect their business model that is built upon depriving creators of rightful revenue and in doing so YouTube endangers the entire streaming ecosystem.”
While the IFPI did not immediately respond Variety’s request for comment on Tuesday, the “false accusations” Cohen cites come from its annual and mid-year reports, which regularly state that YouTube’s comparatively low royalty rates and safe-harbor protections that exempt it from policing copyright-infringing material create a “value gap” that is the single greatest threat to the music industry’s financial health. In a response to Wojcicki’s October blog post, IFPI CEO Frances Moore questioned YouTube’s claims about its financial contributions to the music industry:
“The figures in [YouTube parent company] Google’s anti-piracy paper don’t match our own,” she wrote. “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 $856 million in 2017 – less than half of Google’s claim and less than $1 per user per year.”
By contrast, she noted that the much smaller user base of 272 million users of audio subscription services compensated creators $5.6 billion: slightly more than $20 per user per year. “This is the reality of the ‘value gap,’” she concluded, “in which user-upload platforms, such as YouTube, exploit music for profit without returning fair compensation to music creators.” The RIAA had a similar stance in response to a 2017 blog post from Cohen.
That perspective was seconded, in somewhat milder terms, by John Phelan of the Brussels-based International Confederation of Music Publishers, who told Variety on Tuesday, “Article 13 simply says nothing about making life difficult for emerging musicians. What definitively does make life unnecessarily difficult is certain Big Tech [companies]’ desire for the status quo: ‘no rules, or our rules.’ The unity within the music sector is rock-solid on this: The value gap is there and needs closure if we’re to see fairer reward from how our music is used on these very particular services.
“As for the missing-ownership allegations, that just doesn’t stand scrutiny,” he continued. “We can provide music instantly, accurately and digitally today to every global corner.”
A major-label executive who preferred to remain anonymous agreed. “The notion is that YouTube couldn’t post ‘Despacito’ if they didn’t know who owned 10% of the publishing, or that it would cause them to take on an inordinate level of risk, is disingenuous,” the executive said. “Spotify takes that risk every day, and YouTube is obviously part of a much more highly bankrolled company. No one has sued to take down [the Sheeran and Bieber songs Cohen mentions] on any of the streaming services. They’re all ‘the sky is falling’-type predictions.”
Phelan continued on that point. “Laws not blogs should decide this matter,” he concluded. “Let’s be crystal clear: ‘mitigating’ the objective of Article 13 would complicate licensing, risk reducing the value returned to creators and renege on the clear instruction given in September by 438 Members of the European Parliament from all 28 European Member States to conclude negotiations on this Directive.”
At press time, reps for the three major label groups, the IFPI, IMPALA and the RIAA either did not immediately respond or declined Variety’s request for comment.