YouTube Says Artist Royalties Will Suffer If Government Regulation Increases

YouTube artist royalties
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YouTube artist royalties
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Photo Credit: Leon Bublitz

Is that a threat, or a promise? Google-owned YouTube now says that increased regulations on behalf of the music industry could lead to declining artist royalties in the UK.

YouTube is the major subject of an inquiry launched into the economics of streaming. Over the last few months, artists have revealed what they receive from their digital streaming royalties. It’s a pittance compared to how much YouTube is raking in via advertising.

David Joseph, the UK CEO of Universal Music, told the committee that 70% of his artists’ music is accessed on YouTube. However, artist royalties from YouTube only account for 5% of the company’s revenues. In 2019, UK record labels earned £35m ($47.73 million) from artist royalties paid by YouTube. For comparison, that’s about half of the £66m ($90 million) revenue generated by vinyl records’ sales.

EU laws could force YouTube to begin licensing music like streaming services, instead of relying on safe harbor loopholes.

Of course, both Apple Music and Spotify agree to a fee in advance for the use of a label’s catalog. If they don’t pay, they don’t play. But YouTube typically hosts music without a license; instead, it strikes deals with rights owners for a cut of advertising fees. It’s worth noting that any EU laws won’t impact the UK since Brexit, however.

YouTube’s written submission to the DCMS committee outlines its case. YouTube says there are over 500 hours of video content uploaded to the site every minute. The global music industry has received £8.7bn ($12 billion) in royalties from YouTube as of January 2020. YouTube says it believes it may outstrip Spotify as the “music industry’s number one source of revenue” by 2025.

But it argues that any legislation concerning artist royalties may be “too difficult to adhere to,” potentially resulting in blocked content.

“We are concerned that any overboard implementation of legislation of that type may lead to vague, untested requirements that could result in online services needing to over-block content to mitigate potentially significant legal risk,” YouTube writes in its submission. “Such an overbroad implementation would also risk lowering the revenue to traditional media and music companies from YouTube and will potentially devastate the many creators, artists, and songwriters who have built their businesses on our platform.”

YouTube complains that the data regarding ownership of music rights is too muddy. It says trying to determine who should get a cut of artist royalties would be too onerous for it to work out.

“Historically, it has been very difficult for platforms to obtain all of this data,” writes YouTube. “This lack of data is what could lead to over-blocking. If you multiply these risks with the scale of YouTube, the potential liabilities could be so large that no company, especially startups, could take on such a financial risk.”

Music videos account for around 83% of all videos exceeding one billion views on YouTube.

2 Responses

  1. Wrong Again

    You Tube

    Where to begin.

    You Tube has been stealing millions


    Any govt intervention will only harm their brazen theft of musicians profits

    Anything to starve the beast!

  2. Johnny

    Youtube makes more money than me FROM MY MUSIC! WOW! How does this work? Well, thousands of versions of my songs are uploaded by fans to Youtube then they and Youtube make money from my music BUT I DON’T! And somehow Youtube thinks this is fair and us poor starving artists should endorse this new business model! 60% of PROs have already quit the business thanks to Google/Youtube. Who allowed this to be legal? Were any artists or songwriters consulted when this new ‘business model’ was approved by the Govt.? And when you complain they tell you to go out on tour and make money by selling T shirts! Disgraceful what has been allowed to happen in our once great industry. But you should now still spend all day sending in DMCA take down notices instead of writing new music – that is the future of free music on Youtube.