The music industry has spent years complaining about YouTube, but artists and record companies have been especially critical of the video streaming site throughout 2016, claiming it doesn’t pay them a fair amount for the use of their music. Now, YouTube has responded by saying it handed the music business over $1 billion in the last 12 months.
YouTube’s chief business officer, Robert Kyncl, revealed the figure in a blog post yesterday. He wrote that the $1 billion came from advertising alone, “demonstrating that multiple experiences and models are succeeding alongside each other,” a reference to services that license music directly, such as Spotify and Apple Music.
Back in June, Nine Inch Nails frontman and chief creative officer at Apple music, Trent Reznor, said YouTube is built on the back of stolen content. The remarks were partly because of YouTube's attempts to rework copyright legislation to grant the service safe harbor status for content uploaded without the copyright holder’s permission.
Just one week after Reznor’s comments, music labels and artists such as Taylor Swift, U2, and Paul McCartney sent an open letter to congress calling for a reform of the Digital Millenium Copyright Act (DMCA).
The music industry's main objection to ad-supported sites such as YouTube is that while the money it receives from them has been increasing, it hasn’t matched the rate that viewer numbers are growing.
In a Medium post from March, RIAA boss Cary Sherman talked about “the alarming disparity between the growth in the number of ad-supported streams compared to the growth in revenues generated from those streams.” He added that this “value grab” allowed YouTube to pay far less for songs compared to services such as Spotify, which paid out $1.8 billion in 2015.
YouTube argues that the site is a fundamentally different type of service than the likes of Spotify. It also notes that its ContentID system allows rights owners to make money from videos that use their material.
“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,” wrote Kyncl.