YouTube is at loggerheads with music labels – again – after US industry body the Recording Industry Association of America (RIAA) criticised Google’s video service for the low royalties it pays out to music rightsholders.
In its annual report on the US recorded-music market, the RIAA called out the “meagre” royalties paid out by YouTube and other free streaming services.
However, Google has responded by criticising “apples to oranges” comparisons to subscription-based music services like Apple Music and Spotify’s premium tier.
The row came as the RIAA revealed that Americans’ spending on recorded music rose 0.9% to $7bn in 2015, with streaming overtaking music downloads to become the largest chunk of those revenues.
Streaming revenues in the US rose 29% to $2.4bn last year, including a 52% rise in paid subscriptions to $1.22bn, with more than 13 million Americans paying for a streaming service by the end of 2015.
However, RIAA chief Cary Sherman said that the money labels are making from free, advertising-supported, “on-demand” services is not growing fast enough.
“In 2015, fans listened to hundreds of billions of audio and video music streams through on-demand ad-supported digital services like YouTube, but revenues from such services have been meagre – far less than other kinds of music services. And the problem is getting worse,” wrote Sherman in a blog post.
“This is why we, and so many of our music community brethren, feel that some technology giants have been enriching themselves at the expense of the people who actually create the music.”
Google responded with a sharply-worded statement of its own, defending its impact on the music industry.
“To date, Google has paid out over $3bn to the music industry – and that number is growing year on year,” said the company in a statement.
“This revenue is generated despite the fact that YouTube goes way beyond music to include popular categories such as news, gaming, how-to, sports and entertainment.”
YouTube pointed to the recent launch of its standalone YouTube Music app as evidence of its intention to “deliver even more revenue to both artists and the music industry more broadly”, and hit back at comparisons to services like Spotify and Apple Music.
“Past comparisons to other audio-only, subscription music services are apples to oranges.”
Sherman made another comparison in his blog post about 2015, however, noting that the sales of 17m vinyl albums that year made more money than the “hundreds of billions of streams” on ad-supported streaming services – $416m and $385m respectively.
Almost exactly the same criticism was levelled at YouTube by Geoff Taylor, Sherman’s counterpart at British industry body the BPI, in November 2015.
There are apples-to-oranges caveats here: think of the costs of producing and distributing 17m vinyl albums, and the likely impact on the profits they generate for labels. Still, the comparison is a telling sign of the tension between music rightsholders and YouTube, even though the latter remains an important promotional partner for labels.
YouTube has also launched a subscription service of its own, YouTube Red, which includes music as well as exclusive shows from YouTube stars like PewDiePie. It launched in the US in late 2015, and is expected to cross the Atlantic soon.