Music Industry to YouTube: $1 Billion Isn't Enough

By Michelle Nicolson February 06, 2014

Tension between Google-owned YouTube and the music industry is nothing new, as the Internet video giant has long since rankled music executives over copyright issues.

But Google has made an effort to make good to musicians, paying out more than $1 billion to music rights holders over the last several years, according to Tom Pickett, YouTube vice president of content, in a panel discussion this week at the Midem music industry show in Cannes, France.

"We are very much into music," Pickett said, adding later during the discussion that, "If you think about it, we’ve paid out to the music industry over the last several years over $1 billion. So there is money being generated in this ad-supported model. It is going to artists."

However, Pickett acknowledges that since the money goes out to thousands of right holders, the per-view payment is relatively small for many artists.

Therein lies the problem, says the music industry. “When I looked at the billions of streams there were in music videos, and the pounds and pence coming in to the industry from that, it was a very small number,” said BPI chief executive Geoff Taylor in an article for The Guardian.

Google has made strides in helping the music rights retain those rights as well as make money when they are used, installing technology that identifies when users upload videos containing copyrighted music. Ad revenue on YouTube and revenue generated through the Google Play music subscription service are two other ways the Internet giant has tried to work with the music industry.

But it’s not enough, says some music executives.

“I am concerned with YouTube entering the market because for YouTube everything is about dominance, and dominance is connected to destruction,” said Horst Weidenmueller of !K7, an indie firm, in The Guardian. “I would rather prefer perhaps Google not being in music.”

However, Google’s YouTube is very much in music, as music videos account for 38.4 percent of all views on YouTube, according to Videolink and Tubular Labs. That means both parties have a lot of reasons to try to work together.

Part of the problem is the music industry’s business model, already usurped in the last two decades by digital technology like MP3 services, is still in flux. The growth in streaming music services is also shaking things up industry.

 “It’s not a place to make money right now, but it’s not primarily because of YouTube or Google in my mind, it’s because the people representing the content primarily don’t understand the marketplace,” said Jordan Berliant, of The Collective Music Group.

Edited by Cassandra Tucker

TechZone360 Contributing Writer

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