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.

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.