The International Federation of the Phonographic Industry (IFPI) has released its 2017 Music Consumer Insight Report and is none too pleased with the findings.
Despite the fact that listeners on licensed streaming services have increased from 37 percent in 2016 to 45 percent this year, the IFPI remains distressed at what it perceives as a “value gap.” Even though labels receive billions of dollars from uploaded music that has been monetized, they feel it’s not enough. The IFPI sees a significant “mismatch” in value between how much user-upload services like YouTube make in ad revenue and what they pay out to the labels.
“User upload services, such as YouTube, are heavily used by music consumers and yet do not return fair value to those who are investing in and creating the music,” the report says.
According to IFPI CEO Francis Moore, the value gap is the biggest threat to the music industry. It is so intimidating that the record labels are actively lobbying Congress for legislation to force the closure of this gap. YouTube is reportedly not even a break-even business.
The other big thorn in the IFPI’s side is piracy in the form of stream ripping.
The report notes that 40 percent of listeners consume unlicensed music and that the vast majority (35 percent) use stream ripping services. That’s up from 30 percent in 2016. Over half of those using illegal services are in the younger (16-24) age bracket.
“The industry is taking action against these [ripping] sites and fighting for the rights of those creating music,” said Moore. “With the wealth of licensed music available to fans, these types of illegal sites have no justifiable place in the music world.”
Moore’s stance is not just empty words. Earlier this month, stream ripping website YouTube-MP3 was defeated in copyright court and forced to hand over its domain to the Recording Industry Association of America (RIAA). The owner of the stream ripping service, Philip Matesanz, will also pay the labels an undisclosed monetary settlement.
The problem for the record labels with ripping is that there are hundreds of sites that will convert YouTube videos to MP3s. The RIAA v. Matesanz win was only a drop in the bucket toward combating the problem. The issue makes the peer-to-peer legal battles of almost two decades ago look insignificant.
Moore’s hyperbole on the value gap falls flat in the face of the growing problem of stream ripping. However, I can understand the IFPI’s tactic here. There are no more laws that can be enacted to make ripping more illegal than it already is. It is far easier to lobby for new legislation that takes money from legitimately licensed streaming services versus chasing the rippers.
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