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Report: YouTube Music Shows High Profits & Low Royalty Payout
"So if YouTube Music has grown ad revenue by 36 percent and climbed to over 20 million paying subscribers, music creators must be raking in the royalties, right? Wrong..." –Conversations In Advocacy #74
According to a new report, things are looking up for YouTube Music… way up. Considering YouTube's continued growth in the streaming marketplace, this should mean good things to come for creators who rely on royalties. But unfortunately, that's not the case.
Let's start with the good news for YouTube. The popular website's ad revenue increased by 36 percent, reaching $15.15 billion for 2019, and they have passed 20 million paying subscribers for YouTube Music and 2 million paying subscribers for YouTube TV. According to recent findings from the International Federation of the Phonographic Industry (IFPI), 77 percent of internet users have used YouTube to listen to music, making it the most popular music service.
But for creators, the windfall has yet to reach their wallets. Despite the massive growth in audience size, there's still a great divide between YouTube Music's profits and its payouts.
The report also states YouTube pays out creators at $0.00074 per stream, the least amount out of the major streaming services in terms of gross payout to labels per stream. In comparison, Spotify pays over five times more than YouTube at $0.00397 per stream, while Apple Music pays over ten times more than the online streaming giant at $0.00783 per stream.
The bottom line is that as the streaming giant continues its dominance on the backs of the very creators who populate it, YouTube is making it even harder for those creators to continue to create.
Worse still, YouTube has little incentive to change their ways. As the Recording Academy has previously noted, the notice-and-takedown requirement for removing infringing content is ineffective and leads to soaring profits for the platform and below market pay for creators. YouTube is actually protected by Section 512 of the Digital Millennium Copyright Act (DMCA) against infringement claims, so creators seeking to stick up for their work have a hard time.
Fortunately, Congress is taking notice with the Senate Judiciary Committee holding a hearing on the DMCA next week. Section 512 was intended to provide a process by which creators can work with platforms to control illegal use of their work online, but has fallen out of balance in the 22 years since it was enacted.
At next week's DCMA hearing, lawmakers will have a chance to revisit this critical policy and make it fair in the context of today's streaming marketplace, content giants like YouTube, and hard-working creators reliant on royalties.
To learn more about this and other important music policy issues, visit the Recording Academy's issues and policy page and contact your members of Congress today to let them know it's time to hold today's streaming giants accountable for their big-time profits by making sure creators of all types and levels see a fair piece of the pie.