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CMU Beef Of The Week #193: The Music Industry v YouTube

By | Published on Friday 7 February 2014


Earlier this week, MIDEM’s organisers were enthusing about how positive everyone had been at this year’s edition of the big Cannes bash. The conference was apparently filled with record industry folk thrilled at the (very slight) return to growth that has been seen in their strand of the music business in various territories in the last year or so. All was well again in the world. We’ll be rich… rich I tell you!

Of course, prior to that statement the most reported on panel during the conference this year was called ‘Fuelled By Video Success’. And while that sounds pretty positive, it’s the session where Google’s Vice President of YouTube Content Tom Pickett took a bit of a beating.

The main headline from that panel was the vague stat from Pickett claiming that YouTube has paid out $1 billion to “the music industry” over “the last few years”. Which sounds pretty positive, though is also fairly throwaway. Which bits of the music industry? Labels? Publishers? Both? And how long is a few years? It’s the best part of eight years since YouTube signed its first record company licensing deal.

Much of the commentary following the panel noted that, in particular, Spotify also makes claims of having paid out around $1 billion to labels and publishers since it launched, but $500,000 of that came in the last year alone. And given that Spotify has a vastly smaller reach than YouTube, that doesn’t make the payouts on Google’s video platform sound that great. What exactly, some then thought, does that mean for the royalties that are being offered by YouTube for its proposed Spotify-style audio streaming service?

In the panel itself, however, the biggest confrontation actually came during the Q&A at the end of the session. One audience member asked why YouTube has such strict rules on the buying of fake video views (enforcement of which it’s apparently planning to step up even further), but seemingly turned a blind eye to websites that allow users to rip the audio from videos on YouTube to MP3. And why do these sites come up so highly in Google searches?

Pickett started by pointing out that Google search is “a reflection of what’s out there on the web”, and said that the problem was that as soon as one of these sites went down, more popped up in their place, which makes it very hard to fight against them. A valid point, perhaps, but then the questioner retorted that he’d been using one such site to illegally rip music for between three and five years.

Back in 2012, Google did actually stop one such audio-ripping service from accessing YouTube’s servers, and its search business’s action against Rap Genius for a breach of its SEO rules late last year shows that Google can and will act when it feels like it.

Concluding the panel, the BPI’s Geoff Taylor agreed with the questioner, saying: “I’ve got a lot of sympathy for what is being said on the floor, because we’ve been asking YouTube to deal with these stream ripping applications for many, many years. And the point is that YouTube is supposed to be an ad-funded streaming service, not a free download service”.

He added: “I don’t think it’s good for YouTube’s business model that those sites should steal and [take a] free ride on what YouTube is offering, and we can’t understand why it’s taken so long for Google and YouTube to do something about this. It’s very similar to the problems we’re having with Google search, where, as people know that the BPI sent 50 million notices to Google in the last year alone, to remove music, which is being indexed illegally on Google’s search engine. And despite the fact that we’ve sent 50 million notices, and two million of those are to a particular site, it still comes top of search, in search results”.

This is a point that has been echoed many times in recent years, as Google slowly raises itself up to enemy number one status in the music industry. The problem is, of course, that the web giant is also quite a good friend of the music industry – providing services which artists and labels have come to rely on a great deal. But for this relationship to continue and become “a really productive partnership”, said Taylor, then Google has a responsibility to do something to push illegal sites down or out of its search rankings.

That was all a bit serious, wasn’t it? And why no discussion about what the music industry can really learn from YouTube? In 2014 the art of short form video is really all about bouncing cats: