‘Article 13’ Advances In Europe, Potentially Costing YouTube Billions — And Closing the ‘Value Gap’ Forever

YouTube may finally have to pay the music industry— and thousands of artists — the money they deserve.

YouTube has a long, rocky relationship with the music industry.

Thanks to a longtime exploitation of ‘safe harbor’ loopholes in copyright law, YouTube has only paid the bare minimum in royalties.  Despite having nearly 1.4 billion users uploading and watching user-generated content – including music videos – payouts are notoriously low.  According to the latest calculations, artists and other content creators only receive $0.0007 per video play.

Now, Google could be forced to pay the music industry billions.

Earlier today, the European Union’s legal affairs committee approved the controversial measure known as Article 13.  Members of European Parliament (MEPs) seek to ensure content creators, artists, authors, and journalists are “paid fairly” for their work online.

If approved by the EU, internet tech giants — including Google, Microsoft, and Facebook — would have to install “effective technologies” to prevent copyright infringement.  Basically, this amounts to a copyright filter or content scanner.

Similar to YouTube’s Content ID, the filters would automatically detect whether an uploaded image, video, or other media content infringes on existing copyrights.  The difference is that the platforms would have to automatically reject infringing content.  Or, pay the negotiated price for content that is recognized.

The measure faces stiff competition from tech lobbyists, consumer groups, and civil liberty organizations.  This could force the European Union to ultimately dismiss today’s ruling.

But what does Article 13 mean for the music industry?

Simple.  YouTube could no longer exploit the lack of legal protection on digital media to avoid paying full royalties.  Google would have to pay artists and major labels what’s fair.

The video platform has long billed itself as a “neutral intermediary.”  Users – not YouTube – break the law by posting infringing content.  Google merely hosts it on the video platform.

The Vienna Commercial Court didn’t buy that argument.  Two weeks ago, the court found that YouTube actively sorts, filters, and links all video content, including those containing copyrighted material.

In other words, YouTube’s not a “neutral content provider.”  And yes, it can be held liable for copyrighted material users upload if Austria’s ruling stands.  Goodbye, low artist payouts.  Say farewell to the company’s abysmal “value gap.”  That is, if the latest round of court rulings and pro-copyright voting survives.

Of course, Article 13 wouldn’t only apply to YouTube.

Websites that depend on user-generated content – Facebook, Twitter, and Vimeo, among many others – would have to closely monitor what their users upload.  The measure would hold all internet platforms liable for unfiltered content that infringes on existing copyrights.  For example, should a user post a clip from a music video on Instagram, Facebook would have to pay.  If it’s unauthorized, then it’s infringement.

Opponents have argued that the EU would force these platforms to block as much content as possible.  They fear that Article 13 creates a surveillance framework.  The EU – including member countries – could then decide what content to censor.

With today’s narrow 15-10 vote, Article 13 will likely face few changes.  Representatives of 28 member countries will debate the controversial measure next month.

Analysts expect the EU to approve the committee’s ruling.   Then, a final vote would take place later this year before finally becoming law.


Featured image by Håkan Dahlström (CC by 2.0)

12 Responses

  1. elPzee

    What a joke. This article is garbage. And literally the ONLY article I’ve found defending article 13.

    • DaviusWavius

      Indeed. All YouTube has to do is shut down all streaming to EU ip addresses. All EU citizens have to do is VPN to a host outside the EU. YouTube -> VPN Host -> EU. No one can see what EU citizens are receiving on an encrypted channel; meaning no enforcement or liability. YouTube will never know their content is being routed to EU; they are not liable. Artists won’t make any money but VPN providers will.

  2. Remi Swierczek

    YouTube makes only few billions a year – it is Google’s SECRET lately!

    I can assure you that my gut math skills put it at the best at brake even with electricity and server construction bills!

    Without MUSIC it is THE BIGGEST PIECE OF SHIT in digital business!
    Take MUSIC and Google WILL DAMP IT!

  3. Mr. Reality

    The cost that will be incurred to comply with Article 13 will be enormous, not to mention that any filtering system will not be able to catch all new content being uploaded, will not be able to distinguish fair use, and any web site will be financially liable for any infringing content. The easiest solution to such a law is to simply block any IP address from the EU. That can be done easily and at minimal cost to the company. When that happens there will be no YouTube or Google in the EU.

    • Blobbo

      That would be awesome. Google and Youtube can go screw themselves. The EU is leading the way on pushing back on these tech engineer MBAholes while in America, of course, the bending over never stops.

      GO Europe! Make the copyright thieves pay…

      • Nope

        That’s literally the worst thing I’ve ever heard someone say considering YouTube is a large reason why artists including myself thrive and earn more than just a few bucks. Considering this only benefits major record labels mostly who already have a firm grip on the current content id system, any artist in the EU now has to add this to their list of obstacles in making it big. So those companies and the EU can go lick an ashtray with their garbage laws and the ridiculous record labels who support it.

  4. Anonymous

    I suppose it depends on the definition of “effective technologies”. I think we can all agree that it is impossible to block all copyrighted material from being posted, particularly with respect to new releases, unregistered content, and cover versions. If there is a reasonable threshold as to how much content is successfully blocked for a company to have safe harbor protections from anything it isn’t able to catch (i.e. a so-called “reasonable commercial effort”), then it may work out.

    I do know that something has to change when it comes to safe harbor and uncontrolled illegal UGC. What we have now just won’t work. Content creators need to get paid for their efforts. Copyright needs to matter. Otherwise, at some point, we just won’t get any new content anymore, as it won’t be worth the effort for them. If we have to break the internet to find a viable solution, then so be it.

  5. Ghostly Beard

    That’s great news. And to all that says that it cannot be done, that kind of content screening and filtering is already in place… for example there’s no porn on Youtube. Do you think this is because no one is posting it? No, it’s because Youtube/Google is actively filtering it. And with Content ID in place, they are already monetizing all copyrighted material, except the proceeds of ads go mostly to them and a only a few crumbs are reversed to the owners.

    • Paul Resnikoff

      Same thing with other objectionable content, including child pornography.

  6. Theodore Roosevelt

    YT/Google are getting away with a virtual hustle. Circumventing the intent of the law to steal with a BS Safe Harbor provision. BS because if companies like Sound Hound and Haawk can track so can YT/Google.

    According to the math in the article YT/Google pays $0.70 CPM and or $700.00 per 1 million plays. I’d like to buy my Google ad words at that price. 1 million clicks for $700 that’s a good trade. I’d like to get my CPC at $0.0007 a click that math would work for me.No wonder these Plutocrats and Technocrats are ruling the financial world.

    I believe we need some good old fashioned Teddy Roosevelt trust busting. We need more government activities aimed at breaking up monopolies and trusts. Like Facebook, YT, Google and Apple.

    There is a power larger than the power of even the biggest, wealthiest business organization. That superior power is the power of the people, and of the public interest, as represented in the presidency in particular and the executive branch of the federal government in general. Call your representatives, make your voices count, complaining is as start.

  7. lucian

    This is so stupid..artists complaining about low earnings ??they have options like advertising on the videos..and so many more ways to monetize.they don’t have to live of 0000000000007 or how much they complain that yt is paying them..is just a war started by youtube. I’m sure that most of the artists don’t agree with yt shuting down