YouTube paid out $1 billion in royalties over the last 12 months, but the music industry isn’t satisfied

YouTube on a smartphone: the company is accused of playing Goliath to small indie music labels.

In the midst of looking back at its year, YouTube is under attack by the music industry, which believes the over $1 billion that it has been paid in royalties over the last 12 months isn’t enough. The IFPI, an organization that represents musicians worldwide, believes that Google ad revenue doesn’t make up for the huge number of people streaming music for free…

In a blog post published yesterday by Robert Kyncl, the Chief Business Officer of YouTube, Kyncl states that “YouTube has paid out over $1 billion to the music industry from advertising alone…” in the past 12 months. It is argued in the post that as the world changes from traditional media to new media such as YouTube, the music industry has more opportunities than ever to make money through ad revenue:

As more advertising dollars shift from TV, radio and print to online services, the music industry will generate even more revenue from ads. In the future, the music business has an opportunity to look a lot like television, where subscriptions and advertising contribute roughly equal amounts of revenue, bolstered by digital and physical sales.

The BBC talked to an IFPI spokesperson who was less than pleased by the announcement, though. The spokesperson went on to explain that with over 800 million music users across the globe, the $1 billion in revenue means that YouTube only paid out roughly $1 per user for the entire year. As they point out, this number is lacking when comparing it to Spotify who alone in 2015 “paid record labels some $2 [billion], equivalent to an estimated $18 per user.”

This argument opens the door to previous and ongoing discussions on how YouTube should treat music that is uploaded illegally by other users. As it stands, anything can be uploaded to the service but if the copyright owner of the content requests to have it taken down, YouTube must take measures to either remove it or give ad revenue to the rightful owner.

As Kyncl states in his post, “…there is a lot of work that must be done by YouTube and the industry as a whole…” The system isn’t perfect but it does appear that Google is working to find a better solution for everyone.

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Avatar for Justin Duino Justin Duino

I’m a writer for 9to5Google with a background in IT and Android development. Follow me on Twitter to read my ramblings about tech and email me at Tips are always welcome.