For the past month, YouTube has been under siege. The video site has faced criticism from various members of the music industry, who have accused it of short-changing the creators who have posted music videos on its platform. When compared to other formats like subscription audio, digital download, and physical media, the critics say, YouTube’s ad-supported approach doesn’t pay out nearly enough.
Now, the video site is offering some counterpoints. In a blog post titled “Setting the Record Straight,” YouTube rebutted the arguments against its treatment of musicians before underscoring its own “love of music” and its “commitment to strengthening the industry.”
The first and most significant argument lobbied YouTube’s came from the RIAA. In March, the recording industry’s chief body reported that streaming services now make up the biggest piece of its revenue pie, but it didn’t see too happy about that fact. Instead, it decried YouTube for creating a “value gap” in which its total streaming volume increased at a faster rate than revenue.
YouTube’s response to this is simple: It’s not a “value gap” but rather a “value shift.” As a larger piece of the pie shifts to streaming, YouTube is generating revenue that previously did not exist.
To back up that point, the blog post cites radio, which for nearly 70 years has played music without compensating artists at all. If radio ad dollars moved online, YouTube reasons, the result would be a net gain for the music industry. Radio’s compensation-free music broadcasts are explained away by the promotion it provides for artists, but that area is arguably YouTube’s strongest suit. In its blog post, it cites top 40 hitmakers like Justin Bieber, Macklemore, and Tori Kelly, all of whom achieved fame thanks to videos they posted on their YouTube channels.
A secondary riposte within YouTube’s blog post answers attacks from musician Debbie Harry, who said the video site does not do enough to crack down on users who re-upload songs without permission. “YouTube and Google know better,” said the Blondie frontwoman. “They are profiting from the law; the people who make the music are not.”
Harry may not quite understand how digital rights management works (and she wouldn’t be the only musician with an ill-informed opinion in that area), but YouTube was to explain the subject to her. “Only 0.5 percent of all music claims are issued manually; we handle the remaining 99.5 percent with 99.7 percent accuracy,” reads the video site’s blog post. “Today, the revenue from fan-uploaded content accounts for 50 percent of their revenue.”
YouTube’s counter-arguments are nuanced and effective, but there is certainly some truth to the argument that pre-roll advertising is an inefficient mechanism for generating revenue. To combat that, YouTube has launched ad-free subscription service YouTube Red, which includes a music platfor,m in its $9.99/month price. With that offering, YouTube hopes it will be able to “drive even more revenue to musicians and songwriters.”