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Study Claims That YouTube Avoids $1 Billion in Music Royalties Using DMCA Safe Harbor

Accepted submission by takyon at 2017-03-31 22:31:09
Techonomics

https://torrentfreak.com/dmca-helps-youtube-avoid-up-to-1bn-in-royalties-per-year-study-claims-170330/ [torrentfreak.com]

The safe harbor provisions of the DMCA allow Internet platforms to avoid liability for the infringements of their users. However, it also helps them avoid paying for content, critics say. A new study from the US which aims to put a value on the revenues lost claims that the sums are huge, potentially up to $1 billion per year on YouTube alone.

[...]Exactly how much money is at stake is rarely quantified but a new study from the Phoenix Center in Washington claims to do just that. The numbers cited in 'Safe Harbors and the Evolution of Music Retailing' by authors T. Randolph Beard, PhD, George S. Ford, PhD, and Michael Stern, PhD, are frankly enormous. "Music is vital to YouTube's platform and advertising revenues, accounting for 40% of its views. Yet, YouTube pays the recording industry well-below market rates for this heavy and on-demand use of music by relying on those 'safe harbor' provisions," the paper begins.

Citing figures from 2016 provided by IFPI, the study notes that 68 million global subscriptions to music services (priced as a result of regular licensing negotiations) generated $2 billion in revenues for artists and labels at around $0.008 per track play. On the other hand, the 900 million users of ad-based services (like YouTube) are said to generate just $634 million in revenues, paying the recording industry just $0.001 per play. "It's plainly a huge price difference for close substitutes," the paper notes.

What follows in the 20-page study is an economist-pleasing barrage of figures and theories that peak into what can only be described as an RIAA-friendly conclusion. As an on-demand music service, YouTube should be paying nearer the same kinds of royalties per spin as its subscription-based rivals do, the paper suggests. "More rational royalty policies would significantly and positively affect the recording industry, helping it recover from the devastating consequences of the Digital Age and outdated public policies affecting the industry," the paper notes.

http://www.phoenix-center.org/PolicyBulletin/PCPB41Final.pdf [phoenix-center.org]


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