21 September 2017
Reporter: Barney Dixon

YouTube value gap persists, says IFPI

Licensed on-demand streaming continues to grow in popularity as record companies promote digital services, but the so-called YouTube value gap persists, according to a new report from the International Federation of the Phonographic Industry (IFPI).

The report, Connecting With Music, suggested that 45 percent of people engage in licensed audio streaming, up from 37 percent in 2016, compared to 40 percent of consumers accessing unlicensed music.

User upload services account for 55 percent all on-demand music streaming, with YouTube alone accounting for 46 percent.

But, the IFPI says YouTube and other user upload services are not returning fair value to the music community, despite their prevalence as the preferred method of streaming.

The IFPI says: “User upload services, such as YouTube, are heavily used for music, yet do not return fair value for this music to those investing in and creating it. This is a fundamental challenge for the music community which is campaigning for a legislative solution to this issue known as the ‘value gap’.”

More than 80 percent of YouTubers said they had used the service for music streaming in the past month, amounting to an estimated 1.3 billion users. YouTube is estimated to pay less than $1 to rightsholders per user, compared to $20 per user paid by Spotify, according to figures from the IFPI.

Francis Moore, CEO of the IFPI, says: “The value gap remains the single biggest threat facing the music world today and we are campaigning for a legislative solution.”

Earlier this month, music industry coalition musicFIRST accused Google of hiding behind its legal ‘safe harbour’ to make “billions selling ads around unlicensed copies of music”.

It said: “Music creators can accept much lower payments forced on them by Google, or their music will just end up on YouTube anyway, which has a very convenient government-granted safe harbour from copyright infringement.”

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