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BPI boss responds to Lyor Cohen’s safe harbour remarks 

By | Published on Tuesday 22 August 2017


BPI boss Geoff Taylor has followed the lead of his American counterpart at the RIAA and responded to Lyor Cohen’s blog post from last week in which he bigged up the role of YouTube in the music industry’s digital future, and played down the significance of the big bad safe harbours.

As previously reported, record industry veteran Cohen – appointed to lead music operations at YouTube nearly a year ago – defended his current employer in the blog post on Friday. YouTube, of course, has become enemy number one for many in the music community in recent years, with record labels and music publishers arguing that the Google firm exploits the copyright safe harbour to secure unfair terms in its licensing deals with music rights owners. To that end, said labels and publishers want safe harbour rules in copyright law rewritten so that services like YouTube no longer qualify for protection.

Cohen argued that the safe harbour is one big distraction, and that the music industry should instead focus on the growth of YouTube advertising sales and its Red subscription service – and the new monies both can generate for the music industry. Plus, he insisted, YouTube remains a valuable marketing channel for new music, and his team is busy further enhancing the promo tools the platform offers artists and their business partners.

The boss of the Recording Industry Association Of America, Cary Sherman, was quick to respond with his own blog post denying safe harbour was a distraction, questioning Cohen’s optimism about the potential for a future boom in YouTube royalties, and disputing some of Cohen’s figures regarding what YouTube is currently paying to the music community. Yesterday the CEO of UK record industry group BPI, Geoff Taylor, echoed the many of those sentiments.

“Lyor Cohen argues that YouTube’s advertising business is growing rapidly”, Taylor wrote in a new blog post, “paying out more per stream than other ad-supported services, and is now joined by a subscription business that together will drive the industry to ‘a more lucrative place than ever before’. He praises the role of YouTube in breaking new artists and argues that safe harbours allow platforms like YouTube to give a voice to millions of artists, making the industry more competitive and vibrant”

“Sounds good, right?” Taylor continues, before adding “but from a UK perspective, this ignores a few inconvenient truths. Contrary to his claims, in the UK, at least, there is little if any growth in advertising revenues from YouTube. Ad supported revenues from video streaming grew by just 0.4 per cent for UK labels last year, despite rapid growth in use of the platform”.

Noting that the YouTube Red subscription service is yet to launch in the UK, Taylor also points out that the video platform does little to upsell the streaming service parent company Google does operate in the UK, ie the Google Play streaming set-up. “YouTube isn’t helping to grow our subscriptions business”, he says, “it’s undermining it. According to research from IPSOS, one in five internet users say they don’t pay for music because they get all the music they need from YouTube”.

But what about all that free promo YouTube offers, hey Geoff? “YouTube isn’t such a great music discovery service as it might like to believe”, he reckons. “Research from AudienceNet and from IPSOS shows that two thirds to three quarters of YouTube music users use the service mainly to listen to music that they already know”.

So what does that mean? Well, says the BPI boss, “rather than empowering the artist community, as Lyor argues, safe harbours take away an artist’s freedom to choose. Artists aren’t given the opportunity to decide whether they want their music to appear on the platform, or at what price. For most artists, the only option is to accept pitiful compensation for the use of their work, at a rate dictated by YouTube – since effectively blocking use of their work using the Content ID tool (if it’s even available to them) is not realistic”.

Content ID, of course, is YouTube’s rights management tool that helps labels and publishers manage their content on the platform, in particular when their music appears in videos uploaded by third parties. It’s a pretty damn good tool, but – some in the music community say – not as damn good as YouTube claims. And although individual artists can monetise their own videos by becoming a YouTube content partner – which is very easy to do these days – they will usually have to ally with a music distributor to access Content ID.

“Safe harbours are hardly ‘a distraction’ in the relationship between YouTube and the music industry”, Taylor continues. “If the music industry is getting paid around one twentieth as much as it should by one of the biggest users of music on the planet, that’s a reasonable thing to obsess about”.

“The simple way for YouTube to fix its disconnect with the music industry”, he says, “is to confirm publicly that it does not qualify for safe harbour protection for music content, because it does not play a merely neutral, passive and technical role. This should be uncontroversial, given Lyor’s claim that most music watch-time on the platform comes from a YouTube recommendation”.

Like Sherman at the RIAA, Taylor adds that he believes former record industry man Cohen has good motives, but – he adds – the music industry trade bodies who are busy lobbying for safe harbour reform haven’t seen a shift in attitude higher up the command chain at YouTube and the wider Google/Alphabet business.

“I believe that Lyor Cohen sincerely wants YouTube to be a positive force for music”, Taylor concludes, “[But] that’s going to take more than words. It’s going to take a fundamental shift in YouTube’s business practices so that it pays for the music it uses at a level similar to competing services”.

“It can afford to do so”, Taylor adds. “Alphabet, YouTube’s parent company, is on course for revenues of $100 billion this year. That’s bigger than the GDP of Croatia and Slovenia combined (according to the IMF). If Lyor can persuade the powers at Google to make such a change, he will be a hero to even more people in music”.