Since its inception, the music industry has had a bumpy relationship with YouTube. As artists wage legal war on the platform, is there any way YouTube and the music industry could get along?

 
This month, around one thousand artists began lobbying the US government to rewrite the Digital Millennium Copyright Act (DMCA). Specifically, they want YouTube to be held accountable for the copyright infringement that is prevalent on its service.

Though YouTube is fast becoming one of the world’s largest music sources, artists and rights holders are increasingly dissatisfied with the way the website works for them. There are several key areas in which YouTube and the rest of the music industry do not get along, but are there any good sides to the service? Can rights holders and YouTube eventually coexist?
 

Less than royal royalty payments

 
The infamously low royalty payments artists receive from audio streaming services like Spotify, Tidal and Apple Music have caused outrage in the music community. YouTube pays even less.

Between 2014 and 2015, streams of music videos on YouTube increased by 132%, yet rights payments to artists and labels rose by just 11%. In effect, this means the average payment made per stream decreased from $0.002 to $0.001. In comparison, Spotify pays rights holders from $0.006 to $0.0084 per stream – still a minuscule amount, but much more than YouTube.

YouTube pays so little because it monetises its videos differently than audio-only services. While Spotify and its ilk pay rights holders (be they labels, managers or musicians) a set amount of money based on streaming figures, YouTube pays them an amount based on advertisements.

With YouTube’s time-based payment system, longer videos have the potential to earn more money. YouTube places ads before videos depending on how much time the viewer has spent on the service in that session. A viewer watching four 20 minute tutorials will see an ad before every video, whereas someone watching an hour of music videos will only see ads before three of them. This is not welcome news considering music videos tend to last around four minutes, though some artists have cannily started lengthening their video runtime perhaps to accommodate this.

Researchers at MIDiA told Forbes they do not think YouTube is ever likely to switch to the more favourable pay-per-stream model in the near or distant future.
 

Copyright capture done wrong

 
Another problem that the music industry has with YouTube is the prevalence of copyright-infringing material found on the service. Since anyone in the world can upload a video of anything they want, it is unsurprising that users sometimes upload songs they like, whether cover versions, remixes, or full music videos. YouTube say their Content ID software allows rights holders to easily find their content on the website and request takedowns or monetisation, but many in the industry disagree.
 

Is there a bright side of YouTube?

 
With these very low downsides in mind, is there an upside to YouTube for rights holders and artists? There could be.

YouTube allows the music industry to monetise music videos, decades on from ‘the MTV mistake’ – a 1980s deal in which record labels agreed to air music videos on the then-new channel for free, seeing them as purely promotional. The idea was that MTV viewers would watch music videos and subsequently go out and buy the music. All the while, MTV was actually making money from playing the videos, and the rights holders were missing out.
 

 
Thanks to YouTube’s monetisation, music videos are now generating income for rights holders directly. The obvious downside to this upside, though, is that YouTube’s rights payouts are so low.

There is another bright side. Young artists frequently find YouTube as a way to build a fanbase and even drum up interest from record labels. Some smaller artists say their concert attendance has grown thanks to YouTube. One of the biggest-selling artists of recent years, Justin Bieber, got his start uploading copyright-infringing cover versions to his YouTube channel, and subsequently brought millions of dollars into the music industry.

The problem with this promotional upside is that it is completely intangible. There is no real way to measure how many people buy a record or concert tickets because they saw a video on YouTube. The lack of substantial financial payments, on the other hand, is a very quantifiable red flag.

In the end, the music industry has to decide whether the perks of YouTube outweigh the losses. Judging by the recent legal action against the site, it appears many have made up their minds.