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YouTube’s Monopoly Effects and Keeping an Eye on Those Songwriters

April 8, 2014

In case you didn’t believe there was a reason why YouTube executives were booed at this year’s MIDEM global music industry trade conference, you may find this reporting from the Music Tank meeting in London this week as reported by Complete Music Update:

Last night’s MusicTank debate…was…generally optimistic….And though the debate was technically initiated by Thom Yorke’s Spotify-bashing of last year, the DSPs were generally portrayed as good partners for artists and rights owners. With perhaps one exception – any DSP bashing last night was reserved for YouTube.

The Google-owned platform is an important partner for the music industry everyone agreed, but the music community’s relationship with the content giant – skewed by the firm’s opt-out rather than opt-in approach to dealing with rights owners – needs to change.

There has been a real swing against YouTube in the music community in the last year, with growing resentment over the particularly low royalties the platform pays out, and the limited control it offers artists and rights owners over their content. There’s also a growing fear that the market-leading content service will prevent other more industry-friendly platforms from ever going into profit.

“Market leading”?   That’s very kind.  The fact is that YouTube is a horizontal extension of Google’s monopoly over ad supported search and is essentially a horizontal extension into ad supported video search that was itself subsidized for years by Google’s monopoly profits from search, not to mention Google’s massive “dark fiber” purchases and the federal and state subsidies Google gets in State of Oregon, home to Palo Alto High’s favorite son, Senator Ron Wyden.

In case Mr. Almunia was looking for some evidence of Google’s abuse of its market power in Europe, he might be interested in interviewing some of the European based indie labels that suffer from the “benefits” of Google’s monopoly.

We could say the same of the U.S. Federal Trade Commission, but we know they can’t be bothered to lift a finger.

The songwriters, however–now, the songwriters have to have every move they make scrutinized by the federal government in the U.S.  Yes, the FTC cannot be bothered with the politically influential Google–it can acquire whoever it likes.  True, the Google executives (including Sheryl Sandberg) leaned in to a close call with a federal grand jury on those seedy drug charges, but that was before Google manipulated an election…sorry, learned how the lobbying game actually works.

Songwriters, however, have to live under a consent decree with each PRO being ruled by a single judge in Manhattan–both of whom render extremely results oriented decisions while trying to set a market price for use of music for songwriters.

Songwriters have to live under a mechanical royalty regime dating back to 1909 in which the government set and artificially suppressed the royalty for songwriters for 70 years at the same 2¢.  That’s right–$0.02.  Only in 1976 did the government deign to allow songwriters a cost of living adjustment and let the rate float upward to the current 9.1¢.

Had the government decided to apply the inflation adjustment retroactively to 1909 and prospectively from 1976 to compensate the generations of songwriters it screwed–sorry, that were subject to the price fixing–the current mechanical royalty rate would be approximately 50¢.

That’s right–songwriters have not enjoyed the unfettered freedom to bargain in their lifetimes.

But the no government seems interested in YouTube’s market dominance and unfair royalties, and the U.S. government is not interested in reparations to correct the wrong visited on songwriters.  No, we still have the grotesque situation where Google gets free reign over consumers and a free ride over songwriters.

No wonder people hate YouTube.

So here’s the question for Mr. Almunia and the U.S. government–do you want to fix it now that the townspeople with the pitchforks are going after YouTube, or do you want to wait until they’re coming after you?

Last night’s MusicTank debate also threw the spotlight on the often hidden costs associated with digital content, which while perhaps not as high as pressing, storing and distributing CDs, are still significant, not least the investment needed to develop technology that can cope with and process the mountain of data generated by digital services, some of which is relevant to royalty payments, and some of which is needed for marketing and campaign evaluation.

Despite all this, there was a generally optimistic mood on the panel last night – the music industry was facing big challenges in adjusting to a consumption-based future, but these were challenges that artists, labels and digital service providers could rise to. And though the debate was technically initiated by Thom Yorke’s Spotify-bashing of last year, the DSPs were generally portrayed as good partners for artists and rights owners. With perhaps one exception – any DSP bashing last night was reserved for YouTube.

The Google-owned platform is an important partner for the music industry everyone agreed, but the music community’s relationship with the content giant – skewed by the firm’s opt-out rather than opt-in approach to dealing with rights owners – needs to change.

There has been a real swing against YouTube in the music community in the last year, with growing resentment over the particularly low royalties the platform pays out, and the limited control it offers artists and rights owners over their content. There’s also a growing fear that the market-leading content service will prevent other more industry-friendly platforms from ever going into profit.

– See more at: http://www.completemusicupdate.com/article/beggars-reviewing-5050-streaming-split-with-artists/#sthash.R6soHLvg.dpuf

Last night’s MusicTank debate also threw the spotlight on the often hidden costs associated with digital content, which while perhaps not as high as pressing, storing and distributing CDs, are still significant, not least the investment needed to develop technology that can cope with and process the mountain of data generated by digital services, some of which is relevant to royalty payments, and some of which is needed for marketing and campaign evaluation.

Despite all this, there was a generally optimistic mood on the panel last night – the music industry was facing big challenges in adjusting to a consumption-based future, but these were challenges that artists, labels and digital service providers could rise to. And though the debate was technically initiated by Thom Yorke’s Spotify-bashing of last year, the DSPs were generally portrayed as good partners for artists and rights owners. With perhaps one exception – any DSP bashing last night was reserved for YouTube.

The Google-owned platform is an important partner for the music industry everyone agreed, but the music community’s relationship with the content giant – skewed by the firm’s opt-out rather than opt-in approach to dealing with rights owners – needs to change.

There has been a real swing against YouTube in the music community in the last year, with growing resentment over the particularly low royalties the platform pays out, and the limited control it offers artists and rights owners over their content. There’s also a growing fear that the market-leading content service will prevent other more industry-friendly platforms from ever going into profit.

– See more at: http://www.completemusicupdate.com/article/beggars-reviewing-5050-streaming-split-with-artists/#sthash.R6soHLvg.dpuf

Last night’s MusicTank debate also threw the spotlight on the often hidden costs associated with digital content, which while perhaps not as high as pressing, storing and distributing CDs, are still significant, not least the investment needed to develop technology that can cope with and process the mountain of data generated by digital services, some of which is relevant to royalty payments, and some of which is needed for marketing and campaign evaluation.

Despite all this, there was a generally optimistic mood on the panel last night – the music industry was facing big challenges in adjusting to a consumption-based future, but these were challenges that artists, labels and digital service providers could rise to. And though the debate was technically initiated by Thom Yorke’s Spotify-bashing of last year, the DSPs were generally portrayed as good partners for artists and rights owners. With perhaps one exception – any DSP bashing last night was reserved for YouTube.

The Google-owned platform is an important partner for the music industry everyone agreed, but the music community’s relationship with the content giant – skewed by the firm’s opt-out rather than opt-in approach to dealing with rights owners – needs to change.

There has been a real swing against YouTube in the music community in the last year, with growing resentment over the particularly low royalties the platform pays out, and the limited control it offers artists and rights owners over their content. There’s also a growing fear that the market-leading content service will prevent other more industry-friendly platforms from ever going into profit.

– See more at: http://www.completemusicupdate.com/article/beggars-reviewing-5050-streaming-split-with-artists/#sthash.R6soHLvg.dpuf

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