Safe Harbor Cost the US Music Industry Up To $1B in Lost Royalties Per Year, Study Finds (musicweek.com)

An anonymous reader shares a report: For the first time, researchers have quantified the "value gap" and its impact on the US recorded music industry. A study published yesterday (March 29) by Washington, DC-based economy think tank the Phoenix Centre For Advanced Legal And Economic Public Policy Studies attempted to calculate how much revenue the recording industry loses from the distortions caused by the safe harbor provisions. Entitled Safe Harbors And The Evolution of Music Retailing, the study was conducted by T. Randolph Beard, George S. Ford and Michael Stern who applied "accepted economic modelling techniques" to simulate revenue effects from royalty rate changes on YouTube. It showed that if YouTube were to pay the recorded music industry market rates, similar to what other streaming services pay, its economic contributions to the sector would be significantly bigger. The premises used by the Phoenix Centre economists was that, according to the music recording industry, YouTube evades paying market rates for the use of copyrighted content by exploiting the Digital Millennium Copyright Act's "safe harbor" provisions, which allow to post creative content online in good faith and remove it if rights holders so require. Using 2015 data, the Phoenix Centre found that "a plausible royalty rate increase could produce increased royalty revenues in the US of $650 million to over one billion dollars a year."

Comments

Wait - WHAT?

[Anonymous Coward]

Half the music posted on YouTube is by the musicians for promotion.
So they are stealing from themselves?

My how have the tables turned

[OrangeTide]

The musicians are stealing from the record companies.

Re:My how have the tables turned

[Anonymous Coward]

And the record companies, as usual, are claiming the "loss" of something they never had in the first place.

Re:My how have the tables turned

[Anonymous Coward]

Bingo.

Also the problem with RIAA specifically, is that it does not consider licensing.

Eg, if I upload random song from my mp3 player to Youtube, and tick the "monetize" box. I don't have rights to that song, so I should not be allowed to make money off of it, but who actually does? The recording artist? (Eg see the *VEVO channels), The recording company directly? Google makes maybe a penny per 1000 views. If Google was paying RIAA rates for playing of music, youtube would have no music on it what-so-ever, because google has devalued advertising to the point where nobody makes anything from advertising revenue, and now the people who use music as background noise is inconsequential.

The RIAA is barking up the wrong tree. They've simply over-valued music in non-contractually agreed to rates.

From the study:
" Industry data indicates that playing a song a subscription music service pays the recording industry about $0.008 per play,
while the same play on YouTube offers compensation of only about $0.001"

Yeah, and Youtube doesn't own that content and hasn't contractually agreed to pay the recording industry at those 0.008 rates. This is because people uploading the video aren't putting up a deposit to cover licensed use of the music, and the RIAA doesn't know if something has been licensed privately or not.

So I take issue with the argument that these are "losses", the quality of using Youtube as a poor mans Spotify is terrible. If the RIAA really wants to get a handle on this issue, they should upload their entire back catalog to youtube, complete with instructions on how to buy and license the track, and then subsequently have youtube take down all non-fair use (eg straight uploads of the music, not music videos) copies off youtube. That solves the entire problem of Youtube being a piracy haven, by letting the RIAA get 100% of the revenue instead of the shitlord pirates.

Re:My how have the tables turned

[gmack]

Youtube already has a fix for this problem. Just use their Content ID sytem

that lets you decide how to deal with other people using your music. You can block, mute, or monetize the infringing video.

Re:My how have the tables turned

[sneakyimp]

>Looking back, was there anything your record label did that you couldn't have done yourself? The song was featured in a flim that had a wide release in many theaters. Our record label paid the recording costs -- it was done by some really good engineers and mixed by Tom Lord-Alge. I'm a decent engineer myself (ahem, self promo) but there's no way I could achieve that kind of sonic quality. And the promotion we received was worth a LOT. I could never afford that kind of promotion. >As for the losers on youtube ripping you off, it sucks that you're a little guy. The big guys have the resources to search and get YouTube to take that stuff down. You can track down and stop some guy in Cyprus from using your music, but he'll just go rip off some other small artists, he's not going away. I'm not saying you should accept the futility of it and do nothing, but that you may have to accept that what you have to do for yourself probably won't change things in the grand scheme.

I hope you'll acknowledge the impact the safe harbor provision has on little guys like me. Our label was a little guy too and has since folded as a functioning record label. I've filed a lot of DMCA notices. I can't put a song up on youtube without some bot scraping the audio and offering MP3 files for download. It's whack-a-mole from hell. If there was no safe harbor provision, I could sue a company (e.g., Youtube) that lets the cypriot asshole post my music and profit from it. Then, they might be motivated to help me profit from my music instead of criminals. I'm pretty sure you'd still get your music affordably. Removal of the safe harbor provision would not prevent you from making playlists of your favorite songs on youtube. I'd still put my music on youtube. It'd have no impact whatsoever on iTunes or Spotify or Rhapsody, etc. Safe harbor provision sucks IMHO.

Re:My how have the tables turned

[Anonymous Coward]

I don't make music, but I write novels. I've seen my novels on pirate websites (search for my name and pdf and they pop right up). It doesn't concern me in the slightest, and I'll tell you why.

Possible consumers of my novels fall into three buckets - those that like my stuff and are willing to pay me for it, those that like my stuff but don't pay me for it because I'm charging too much/don't allow them to shift my book to their desired device/some other reason, and those who like my stuff, but aren't willing to pay a penny for it under any circumstances. There's absolutely nothing I can do to move people from that third group to another group. Nothing. But by trying to hinder that third group, through DRM for example, I can chase people from the second group into the third. So those people who regularly download my books are lost to me regardless, but that doesn't mean I've lost forever. Maybe they become a big enough fan through their pirated books that they decide to pay for some someday. Maybe they can't find all my books pirated and are forced at some point to actually break down and buy one if they want them all. Maybe they like it enough to mention it to someone who then goes and buys one. So many possibilities, and as a relatively unknown author, if nothing else, it serves as free publicity. Publicity is gold - Forty percent of people who read my first novel come back for more.

Another Bullshit Study From the Music Industry

[locopuyo]

Someone watching a youtube video does not equate to a lost "sale" from a streaming service. The youtube viewer would have never paid to listen to your song.

Re:Another Bullshit Study From the Music Industry

[bluefoxlucid]

You wouldn't pay for the Youtube content, and Google doesn't necessarily have the money to pay (it's allocated elsewhere). You paid for the CDs and for Spotify and whatever else.

You're not a lost sale; you're a successful sale.

I posit that

[BronsCon]

If YouTube were to pay the recorded music industry market rates, similar to what other streaming services pay, its economic contributions to the sector would be 0. This would be so because YouTube would simply not allow copyright music on its service.

Re:Study was paid for by music industry...

[OrangeTide]

I've bought numerous albums on bandcamp because I stumbled onto them on YouTube.

Now I understand that Bandcamp isn't likely included in the concerns of mainstream record companies. But I do believe that I am an active consumer that is spending money in this industry, and that I am not "stealing" billions of dollars.

On the other hand...

[NormalVisual]

...I wonder how many billions of dollars excessive copyright terms have cost the U.S. citizenry directly. Half the Beatles are dead, for crying out loud, and it's been almost 50 years since their last album was released. There's no way copyright can encourage them to record another album.

Re:Who are these guys?

[jandrese]

Update: I found the closest thing to a mission statement I could find buried in a wall of text on page 17 of their 2013 tax return.

Although the Phoenix Center does not meet the safe harbor test for public support (33-1/3%) in 2013, it believes that the following facts and circumstances support the organization's continuance as a public charity. The Phoenix Center has grown and developed since its inception to become a voice for consumer welfare by promoting free markets, competition, and individual freedom and liberty.

In other words, its exacta what everyone thinks. This is yet another one of those corporate mouthpiece "think tanks" that release studies to push a corporate agenda.

The logic, as I understand it

[argStyopa]

Snickers candy bars are priced at $1, sold 20 million units last year.

If we'd priced them at $5 each, we'd have made $100 million, meaning we lost $80 million underpricing Snickers!

Anyone see the faulty logic there?