RIAA Claims YouTube “Exploits Legal Loopholes” To Pay Musicians Lower Rates

In a new blog post, the Recording Industry Association of American (RIAA) — a leading music trade organization — took the opportunity to celebrate that, in 2016, music streaming overtook all other listening formats with a total of 22 million industry-wide subscriptions. Streaming revenues grew to $3.9 billion in 2016 — a 68% increase year-over-year. At the same time, however, YouTube remains in the RIAA’s crosshairs.

“The unfortunate reality is that we have achieved this modest success in spite of our current music licensing and copyright laws, not because of them,” writes RIAA chairman and CEO Cary Sherman.

Sherman adds that on subscription services Apple Music and Spotify, artists receive $7 for every 1,000 on-demand streams, while YouTube pays creators just $1 per 1,000 streams. Sherman attributes this disparity to the fact that YouTube is “wrongly exploiting legal loopholes to pay creators at rates well below the true value of music…It may be the same song requested by the user, on the same device, but the payouts differ enormously because of an unfair and out-of-date legal regime.”

The legal loophole that Sherman is referring to here is the Digital Millennium Copyright Act (DMCA), which states through a safe harbor provision that platforms are not responsible for copyright infringement by third party users. As a result, CNBC reports, the music industry claims that copyrighted content proliferates across YouTube even amid perpetual takedown notices, giving labels no negotiating power in trying to strike licensing deals.

YouTube counters these claims by noting that it is an ad-supported platform as opposed to a paid subscription service. And, despite this fact, the video giant paid out $1 billion to the music industry in 2016. As far as the DMCA, YouTube argues that its Content ID system stamps out copyright infringement widely, and that the automated service is responsible for 99.5% of all claims related to music.