RIAA head joins Value Gap chorus, hits out at YouTube

Following a lengthy courting process in 2014 that saw labels initiallyreject YouTube’s licensing terms, and the first call from the IFPI to rectify the ‘value gap’ last year, the label sector has again expressed its dissatisfaction in YouTube’s payment model.

In an interview withRecode, RIAA (Recording Industry Association of America) Chief Cary Sherman said the fact YouTube is protected by the 1998 Digital Millennium Copyright Act (DMCA) is unfair.

“It’s a dramatically different internet, and it’s time to take a fresh look at whether the balance that was struck in 1998 is effective in 2016,” he said.

Currently under the 1998 DMCA Act, services like Google-owned YouTube can’t be held liable as a result of unlicensedcontent that its users might upload. In order to fight his infringement of copyright, label groups are forced to issue take-down notices, but users have been quick to re-upload content.

Sherman told Recode: “The way the negotiation goes is something like this: ‘Look. This is all we can afford to pay you,’ YouTube says. ‘We hope that you’ll find that reasonable. But that’s the best we can do. And if you don’t want to give us a license, okay. You know that your music is still going to be up on the service anyway. So send us notices, and we’ll take ’em down as fast we can, and we know they’ll keep coming back up. We’ll do what we can. It’s your decision as to whether you want to take our deal, or whether you just want to keep sending us takedown notices.’

However, YouTube has argued that take-down notices can be automated, thanks to its digital fingerprinting system Content ID. In the platform’s filing with the Copyright Officeon April 1 it addresses the accusations:

“Those pressing the “value grab” argument also assert that the royalty rates in these licenses are too low, allegedly because the DMCA’s notice-and-takedown process makes it too difficult for record labels to withdraw their works from YouTube in the face of users re-uploading those works.

“This claim, however, ignores Content ID, which has been in existence since 2008 and which record labels (and many other copyright owners) use every day to monetize their works on YouTube. Thanks to Content ID, record labels do not have to rely solely on the DMCA’s notice-and-takedown process on YouTube—they can remove any or all user-uploads of their works from the platform on an automated and ongoing basis.”

The IFPI has been vocal about its frustration at some major digital services who are able to circumvent the normal rules that apply to music licensing. Speaking during a conference call from IFPI’s London headquarters on Monday night IFPI chief executive Frances Moore said change is needed to create a fair correlation between the consumption of music and the value that it is generating.

“If we’re going to see year-on-year growth we need to solve the problem of the ’value gap’,” she said when presenting the 2015 Global Music Report.”[…] This isn’t just harming record companies and artists it’s also harming other companies that are playing by the rules. […] We need now to look to policy makers, politicians, and it has to be done by legislation.”

Moore’s comments are particularly timely as YouTube readies its subscription service. The streaming giant is negotiating licensing deals with labels and according to a reportby MBW,Universal has “put together both an ‘on YouTube’ strategy and an ‘off YouTube’ strategy– the latter very much an ‘in case of emergency’ fallback”.