Music industry has a point with its complaints about YouTube

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The headline figures in “Measuring Music”, produced by trade body UK Music, suggest that the good times are (rock and) rolling for one of Britain’s most successful industries. 

Music contributed £4.4bn to the UK economy (up 6 per cent) in 2016, with live music accounting for £1bn (up 14 per cent) and recorded music adding £640m (up 5 per cent). Exports – handy give the UK’s abysmal trade balance – added £2.5bn (up 13 per cent) and the industry’s workforce has risen by nearly a fifth (19 per cent), to more than 142,000 people.

So why is CEO Michael Dugher complaining so vociferously about YouTube, which has become the most popular medium for the consumption of music in Britain by some distance?

Mr Dugher says that there is a “value gap” when the royalties paid by ad-funded channels like YouTube (or Facebook) are compared to those from subscription services such as Amazon Music, Apple Music or Spotify. The revenues they provide, when compared to what is generated through physical products (such as vinyl or CDs) are low. But the industry at least feels that it is getting a fairer piece of the pie. 

For its part, YouTube has defended what it hands over, and argued that it offers an alternative to piracy – which is true. But its critics say this hugely profitable business doesn’t pay enough, and that its systems don’t always capture what is there.

Should we really worry about a wealthy industry arguing with another wealthy industry? Business is, after all, booming, and the likes of Ed Sheeran, Coldplay and Adele are hardly going hungry. 

Remember the South Park episode “Christian Rock Hard”, in which Stan, Kenny and Kyle’s band Moop leads a musician strike over the then-problem of illegal downloading, after Britney Spears was seen having to trade in her Gulfstream jet for a slightly less snazzy model? 

“Maybe our songs will get downloaded for free,” says Stan, ending the strike. “But if people like the music they’ll still buy tickets to see us live.”

So they will. Live music is booming – although if the problem of venue shortage isn’t addressed soon, that happy situation won’t last.

But we’re not just talking about the impact of YouTube on the revenues of wealthy superstars. There is a vast fauna of artists below their level, many of whom are struggling financially. 

I can’t help but remember seeing roots band The Black Feathers at Cheltenham’s Wychwood festival. They were using a rather nice retro microphon: purchased, they said, with money that should have gone towards paying their council tax. 

It’s hard to see the duo’s gentle, melancholy, Americana reaching Adele-type levels of popularity. But they might be able to more easily pay their bills (as well as purchasing the equipment they need) if YouTube would pony up as it ought to for content that it relies upon to generate its enormous profits. 

The industry is certainly doing well, but it might do even better, providing employment for even more people and contributing more money to a UK economy that needs all the help it can get, if that were the case. 

Once again, what we see here a digital monopoly that is arguably exploiting that status, sometimes with the aid of legislation – for example, the EU’s E-Commerce directive and its US equivalents – that isn’t always fit for purpose, given the way the market has developed. 

Music, and musicians, are far from alone as content providers who are losing out as a result, and it needs to change. It’s actually in the long term interests of YouTube, and its peers (such as Facebook) if they could but see it. It is funding that keeps the content they rely upon flowing.