rbb-economics-youtube-music

Thanks to some critical statements made by Warner Music CEO Steve Cooper, the contentious battle between YouTube and the music industry has been reheated, and the video site wants to state its case. Its owner, Google, has published a study it backed that supports YouTube’s claim as a positive force in the music industry. The study, which was run by RBB Economics, states that 85% of “heavy users” who listen to songs on YouTube would get their music from a “lower value platform” if said music was no longer available on YouTube.

The timing of the study is convenient, as it allows Google to respond to Cooper’s recent attack. In a memo to employees, which he authored after Warner agreed to re-up its licensing deals with YouTube, Cooper claimed that YouTube and other similar sites use the Digital Millennium Copyright Act’s safe harbor provision as leverage in order to prevent labels from sufficiently negotiating for better deals. Cooper comments have added more fuel to a fire that has now burned for more than a year.

Cooper’s implication is that YouTube knows that pirated versions of popular songs appear on the site all the time (and will continue to appear so long as safe harbor is in effect), and so users can always find the new Bruno Mars song even if Warner hasn’t licensed it for use on YouTube. Because of this truth, Warner has little choice; the label either makes no money on YouTube and consumers listen to its artists there, or it makes some money on YouTube and consumers listen to its artists there.

In its latest salvo, YouTube attempted to refute that idea. RBB’s study survey 6,000 people across four European nations and asked them where they would get their music if it were to be removed from YouTube. Only 15% of heavy users said they would turn to high value platforms like subscription streaming services. The rest cited platforms like TV, radio, internet radio, and torrent sites as their destinations of choice. Some key results from the survey are depicted above.

Obviously, the fact that this is a Google-funded study should immediately add a big grain of salt to any conclusions drawn from it. What makes a platform “higher value?” How many of the respondents use an ad blocker when they watch on YouTube, thus generating no revenue at all? Both of those questions are left suspiciously unanswered in RBB’s report, which can be read in its entirety here.

In its own retort to this data, however, music execs chose to focus on those who would venture to a higher value platform if RBB’s hypothetical situation were real. Geoff Taylor, the CEO of industry trade body BPI, said in a statement that the 19% of UK respondents who said they would make a higher value switch could account for £415 million ($535 million) per year. “Even if only half this number chose to subscribe, the shift would still make an enormous difference to the UK’s artists, songwriters and labels and to the growth of our digital music sector,” he said.

Whether you see YouTube’s argument or agree with that of the music industry or both, one thing is clear: This long-standing feud does not seem as if it will die down any time soon.

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