Last week Nikki Sixx and his band Sixx:A.M. spoke out against YouTube and its royalties rate, citing its current royalties rates doesn't give younger artists much of a chance. Not to let the attack hang in the air completely unanswered, Youtube's Head of the International Music Partnerships, Christopher Muller, responded in a rather lengthy statement via the site's blog.
Here's a particularly interesting excerpt, which I'd also imagine is also a response to Metallica's management too.
Like radio, YouTube generates the vast majority of our revenue from advertising. Unlike radio, however, we pay the majority of the ad revenue that music earns to the industry. Radio, which accounts for 25 percent of all music consumption in the US alone and generates $35 billion of ad revenue a year, pays nothing to labels and artists in countries like the U.S. In countries like the UK and France where radio does pay royalties, we pay a rate at least twice as high.
Instead of talking about a “value gap,” we should be focusing on a “value shift;” if the ad revenue currently spent on radio instead flowed to online platforms, it would double the current size of the music business.
The decades-long argument radio makes for not paying artists is that it’s a promotional tool, raising awareness that artists use to cash in elsewhere. But YouTube offers promotion, too—promotion that pays. And that gets at another argument the industry is making: YouTube hurts emerging artists most.
Every musician knows how challenging it can be to get a deal with a label or their song heard on the radio. YouTube is one of the only platforms that allows anyone to get their music heard by a global audience of over one billion people. And it allows artists like Justin Bieber, Tori Kelly and Macklemore to explode from obscurity to build a massive community of fans that generates hundreds of millions of dollars for the industry.
YouTube also gives artists data they can use to plan tours, land press and even secure record deals. We believe that transparency is critical to ensuring the music industry works for artists. We’re engaged in productive conversations with the labels and publishers around increasing transparency on payouts which we believe can answer many artist concerns.
The final claim that the industry makes is that music is core to YouTube’s popularity. Despite the billions of views music generates, the average YouTube user spends just one hour watching music on YouTube a month. Compare that to the 55 hours a month the average Spotify subscriber consumes.
Make no mistake: regardless of the amount of time people spend watching music, we still feel it’s core to YouTube. That’s why we worked with labels and publishers to build and implement Content ID. It’s why we created a model that offers promotion that pays—to date, we have paid out over $3 billion to the music industry and that number is growing significantly year-on-year. And it’s why we created a custom YouTube Music app and recently introduced YouTube Red, our own subscription service, so that we could drive even more revenue to musicians and songwriters.
It’s these investments and strong ties that demonstrate our love of music and our commitment to strengthening the industry. And while there may occasionally be discord, history shows that when we work together, we can create beautiful harmonies.
The radio bit is definitely a good point, but how many listeners are really discovering new artists via the radio now versus 10 years ago? Though it's interesting that he calls out Spotify's rates indirectly through the rant as well, essentially saying that maybe the current outcry is misdirected… though raging against Spotify is nothing new.
It's a response that could really go a long way in terms of dissection from Sixx:A.M., but the band chose to respond with an attack.
Thank you YouTube for your recent response to Sixx:A.M.’s statement about artists payments.
Unfortunately your response does not directly address the issues and is merely a public deflection. Comparing modern music consumption to old school radio is like comparing apples to oranges.
Are you or are you not willing to pay artists fairly and when will you stop hiding behind safe harbor? (You never answered this the first time).
Don't Be Evil, Do The Right Thing also suggests not spinning misinformation.
Maybe Muller and company will respond again? I don't think that was the right way to ask for an answer since it doesn't provoke much thought – it just sort of accuses them of no answer and leaves it. So we'll see, I guess?