BPI questions Lyor Cohen's YouTube revenue claims

BPI questions Lyor Cohen's YouTube revenue claims

The BPI is the latest record label industry body to respond with a degree of incredulity to the widely discussed blog by YouTube’s head of music, Lyor Cohen.

The former Def Jam and Warner Music executive made the surprising suggestion that the YouTube value gap doesn’t exist, claiming that YouTube pays out more than other streaming services. He also dismissed industry concerns about safe harbour laws which protect online platforms over user-generated copyright infringement.

Following a robust response from the RIAA, BPI chief executive Geoff Taylor has stated Cohen is ignoring a few “inconvenient truths”.

“Contrary to his claims, in the UK, at least, there is little if any growth in advertising revenues from YouTube,” he said. “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.”

Taylor pointed out that there is no YouTube pay tier in the UK and no effective funnel for users to Google Play subscriptions. “YouTube isn’t helping to grow our subscriptions business, it’s undermining it,” he said. “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.”

Taylor also rebuffed claims that YouTube is a major music discovery service. The research suggests many YouTube users listen to music they already know, he said.

After the RIAA called for clarification on the safe harbours legal framework dating from the days of dial-up internet, Taylor added his voice to the debate about the relationship between YouTube and the music industry. Cohen had claimed that safe harbours has become a music business “obsession”.

“If the music industry is getting paid around 1/20th as much as it should by one of the biggest users of music on the planet, that’s a reasonable thing to obsess about,” said Taylor. “The simple way for YouTube to fix its disconnect with the music industry 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.”

He added: “I believe that Lyor Cohen sincerely wants YouTube to be a positive force for music. 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.

“If Lyor can persuade the powers at Google to make such a change, he will be a hero to even more people in music.”

The value gap reaction to Cohen's blog that's exploded in recent days also coincides with a warning about the streaming rate disparities issued by Beggars Group in its latest set of accounts.

 

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