At WIPO, Music Industry Points Fingers At YouTube For Hiding Behind Safe Harbour

YouTube is recognised by many as the world’s biggest music platform. Listening to music on YouTube is free for users. However, according to the music industry, it pays very little in terms of revenue, mostly from advertising. It is time that the safe harbour laws behind which YouTube is hiding, creating a market distortion, be revised or better applied, music industry speakers asserted this week at a World Intellectual Property Organization side event.

The International Federation of the Phonographic Industry (IFPI) held a 10 May side event to the WIPO Standing Committee on Copyright and Related Rights (SCCR) on building a sustainable music industry.

Music Industry on Recovery Road

Ole Obermann, executive vice-president of digital partner development and sales at Sony Music Entertainment, said that after years of decline, the global music market in 2015 showed over 3 percent growth in revenue.

According to the Global Music Report 2016, total industry revenues reached US$ 15 billion, “leading to the industry’s first significant year-on-year growth in nearly two decades.” Digital sales contributed 45 percent of industry revenues in 2015, IFPI said, overtaking revenues from physical products. Skyrocketing are revenues generated by streaming, which showed over 45 percent increase in 2015.

Music consumption is “exploding” globally, Obermann said, with for example a 93 percent increase of streams consumption in the United States. However, he said, consumption outpaces the revenue it is able to generate, as some partners are not paying the industry fairly.

YouTube Protected by Safe Harbour

Platforms such as Google subsidiary YouTube, which is the most prominent, are benefitting from safe harbour rules in a number of countries, and they should not, according to Obermann.

According to Lauri Rechardt, IFPI’s director of licensing and legal policy, safe harbour rules are creating an exception for copyright liability. YouTube claims it is entitled to this exemption, he told Intellectual Property Watch.

“Users are uploading millions and millions of user-generated versions” of music included in Sony catalogue, Obermann said. Although YouTube shares some revenue from advertising, the responsibility is entirely borne by right holders, he said. If Sony does not want music to be available on YouTube, they have to pay people to ask that the music be taken down, which is a very expensive exercise, he said.

A song which generated 15 billion views would yield about US$1 million in revenue, which is only a fraction of what the company – the second-largest music publishing company – could earn through paying streaming services, he said.

A song should be written for the joy of crying to it, not for the joy of buying to it – songwriter Crispin Hunt

Crispin Hunt, songwriter and record producer, said the exposure through social media is “fantastic,” but figures from social media do not translate into real audience. YouTube was originally set up to offer an opportunity to publish user-generated content, but the service has started to promote a number of other things, without proper remuneration, he said.

Nearly half of the music is basically accessible for free, he said, adding that the system through which artists earn remuneration on YouTube through advertising is pushing the artists into formatting their songs in ways that will draw advertising, and this threatens creativity.

“A song should be written for the joy of crying to it, not for the joy of buying to it,” he said.

Adriána Restrepo, president of Codiscos, a record label in Colombia, said most labels in Colombia and elsewhere in Latin America have closed down over the last ten years. However, the digital era has opened new paths for Codiscos, she said, for example allowing for content generated in the country to be accessible throughout the world. She underlined the necessity to be adaptable and willing to make structural changes, but argued the core industry did not change, it still needs talent.

Codiscos, said Restrepo, now invests three times more in young artists than it did three years ago. The company was able to bolster its income, she said, as the digital age allows to cut on costs such as storage, transports, and returns. “Now we can invest differently,” she said.

Marc Lynn, a Swiss bass player and musician, said nowadays musicians have to be present on all digital platforms, which represents a lot of work, and are getting less and less remunerated for their work. On the positive side, he said the digital world provided new tools to reach consumers and allowed for new marketing strategies.

“It is deeply depressing” for a songwriter that the value of recorded music is now being dismissed, Hunt said. The use of recorded music is absolutely massive, he added, and music has become very cheap to get.

According to IFPI’s Rechardt, the law does not really need to be changed. Rather its application should be in line with what the safe harbour rule is really supposed to cover. However, if clarification is needed, “we should clarify the law.” There is a need for a level playing field, he said.

Safe Harbours Revisited in US, EU

Some governments have begun looking again at their safe harbour agreements.

The United States Copyright Office has undertaken a “public study to evaluate the impact and effectiveness of the safe harbor provisions contained in section 512 of title 17, United States Code.”

According to the Copyright Office, section 512 enacted in 1998 as part of the Digital Millennium Copyright Act, “established a system for copyright owners and online entities to address online infringement, including limitations on liability for compliant service providers to help foster the growth of internet-based services.”

The office received over 92,000 initial submissions by the 1 April 2016 deadline for initial comments, the office said. The office was expecting to hold public roundtables on 2-3 May in New York and 12-13 May in San Francisco “to seek further input on the section 512 study.”

The European Commission launched a public consultation which addressed the role of online platforms in September 2015. According to the commission, the objective of the consultation “was to gather evidence and views on the regulatory environment for platforms, liability of intermediaries, data and cloud and collaborative economy. It was launched on 24 September 2015 and closed on 6 January 2016.”

The first preliminary results of the consultation were released in January.

“The public consultation is part of a broader analysis of the role of platforms in the economy and society, included in the Digital Single Market Strategy for Europe adopted on 6th May 2015,” according to the commission.

A full report is expected to be published “in the spring of 2016,” it said.

 

Image Credits: Catherine Saez