Inside YouTube’s War With the Music Industry
Last year, Deadmau5 sent his lawyer, Dina LaPolt, a Skype message: "Please shut this down." He'd found a YouTube channel with 400 unauthorized videos containing his songs: album tracks, remixes and full live shows. "We had to have a paralegal sit in my office for six hours and send 400 takedowns," says LaPolt. "After that, the channel shut down – and it popped up again two days later. It's a big issue for him."
YouTube, with more than 1 billion users, is the most popular source for music streaming on the Internet. But it's become a source of frustration for artists including Taylor Swift, Paul McCartney, Beck, Kings of Leon and others, who recently signed an open letter to Congress calling for reform on the law that allows YouTube to host millions of unauthorized videos. "The artist has no choice – their music is on YouTube even if they don't want it there," says Irving Azoff, manager of acts such as the Eagles and Van Halen. Azoff has published a separate letter to YouTube, calling for action on two issues: its relatively small royalty payments to artists, and its inability to efficiently remove content from the site.
The music business has less bargaining power than ever: As album sales have fallen about 60 percent in the past decade, YouTube has become increasingly important – 98 percent of American Internet users ages 18 to 24 visit the site – and the company says its ad sales have delivered $3 billion to artists and content creators. "YouTube has become radio for kids," says Ken Levitan, who manages Kings of Leon, Cheap Trick and others.
But unlike radio, Azoff says, YouTube is a bad business partner. It allows leaked material and poor-quality live music to stay online. And it pays far less on average than streaming services like Spotify and Apple Music. "YouTube revenue for a superstar artist is a joke," says Azoff. "Their accountings are too complicated and opaque to give an accurate per-stream number. They're acting like an old record company by making the accountings so difficult, the artist remains in the dark."
Like any site, YouTube can stream material without artists' permission thanks to 1998's Digital Millennium Copyright Act (DMCA). The law allows companies to post copyrighted content online if they agree to take it down upon request. But in the YouTube age, this means artists' representatives need to monitor hundreds of millions of new videos every day. YouTube says it has addressed the issue, spending $60 million to build a "Content ID" program, which uses digital "fingerprints" to identify pirated material.
This system catches 99.5 percent of copyrighted material, says Robert Kyncl, YouTube's chief business officer. "I challenge somebody to find a better system of copyright management anywhere," says Kyncl. "It's been nearly a decade of us investing in the system when no one else does anything."
Azoff says YouTube's 99.5 percent claim isn't good enough: He estimates that the videos it doesn't catch account for "48 million unauthorized plays per day. That still requires an army to manually claim the remaining videos."
"YouTube destroys my business and makes money by enabling theft worldwide." –Steve Miller
Some artists hire private services to manage the flood of content. Queen uses Believe Digital, a music-distribution company that employs a 40-person staff, to issue takedown notices or monetize unofficial videos. "If we don't want something, we block it," says Denis Ladegaillerie, the company's chief executive. "If we want it available, we make money. It's a significant source of revenue that did not exist before." Other artists throw up their hands: "YouTube destroys my business and makes money by enabling theft worldwide," says Steve Miller, whose material, including full albums like Greatest Hits 1974-1978, can be found on YouTube.
Azoff points out that YouTube can fully control content when it wants to – it keeps pornography off, plus it charges $10 per month to watch original shows. "Taylor Swift should be able to decide which of her songs are available for free and which are part of a paid subscription service," he wrote. His proposal? For YouTube and its parent company, Google, to join him in lobbying Congress to reform the DMCA. So far neither is onboard, and the tech industry's response has been lukewarm ("Note to Irving Azoff: YouTube Doesn't Need Change. You Do," read a recent Fortune headline).
Corynne McSherry, legal director for the Electronic Frontier Foundation, which advocates for digital rights, points out Azoff may be forgetting that things have gotten better in recent years: "I don't think copyright owners appreciate what they got. In 1997, if you wanted to get music taken offline, you had to go to court."
But Azoff isn't backing down. "Some of us believe we live in an era of government by Google," he says. "Their power to influence Washington is unprecedented. But you can't walk away from a fight just because it is going to be hard."