Are streaming services compensating artists fairly?
Taylor Swift, U2, and 120 other artists signed an open letter calling on lawmakers to reform the Digital Millennium Copyright Act of 1998, or DMCA, according to the article titled, The Music Industry’s New War is About So Much More Than Copyright. Further, this open letter targets ad-supported streaming as a major hurdle for artists, the letter specifically ‘takes aim at “Section 512 of the law, which gives user-generated content platforms “safe harbor’ from liabilities related to copyright infringement.” In the artist’s eyes, YouTube’s ability, which brought it to popularity gave anyone to upload copies of music to the site, where the license to the music and whether it was obtained legally or not is in question. While YouTube did introduce a ‘Content Id’ system for detecting copyrighted content and routing revenues to labels, these artists have been impacted by declining royalties. Further YouTube and online streaming services such as Spotify and Apple Music pay marginally less, as low as a tenth of a penny per stream to artists, leaving some artists like Zoe Keating with no choice by showing their frustrations by revealing their Spotify pay stubs to the public, according to the article Zoe Keating Offers More Evidence That Spotify Royalties Are Declining.
As the way, we consume original content is changing, and as the culture of paying for digital music is waning, the music industry is faced with a challenge to overcome ad-supported revenue. While no specific DMCA law was broken in this case, the authors of the open-letters are seeking a way to update a DMCA law that will prevent YouTube from being a ‘safe harbor’ for user-generated content. In this era, Labels, and YouTuber’s have fewer ways of directly selling their work to consumers. They must rely on companies such as Spotify and YouTube and the market price advertisers are willing to pay per view or listen, count. This can constitute much less revenue than purchasing a CD for example. As the revenues are decided by the market, it’s hard to come to a regulation that would improve creators’ revenues without removing demand advertisers that fund this. With no clear plan of action for the government to take aside from prosecuting those uploading copyright infringing of which ad revenue is already directed to record companies (1), it is hard to determine how regulation can be revised to better accommodate the 100+ signers of the letter.
Negatively: This open-letter has the potential to affect YouTube creators, who often use copyrighted content for parody videos and reviews under the fair-use law. They attribute their success to YouTube’s openness in creating content of their choice, and some popular YouTubers including PewDiePie have criticized the system that aims to protect original content owners of their property. In the article, PewDiePie explains the real problem with YouTube’s copyright system he reveals that any company has the ability to claim his videos and direct his ad-revenue to themselves, “A company is systematically copyright claiming every video I have ever made, despite me owning the rights to all music used in them,” he wrote. “Please tell me I don’t have to manually dispute all 1800 claims.” Furthermore, the Content ID system leaves YouTuber’s in precarious positions, their ad revenue can be lost from false claims by companies and incorrect detections by the YouTube algorithm before being proven. This copyright system is not popular among YouTubers and often directs less than satisfying revenues to the content owners as well. It appears the current implementation of DMCA laws which Taylor Swift and others called broken “broken and no longer works for creators” while YouTubers are saying just the opposite at the record labels. A breakdown of revenue seems (1) to examines that artists are receiving less than 7% of royalties, labels are receiving 45.6%, while platforms such as YouTube, Spotify, and Apple Music average at around 20.5%. While Bono and Taylor Swift may have signed this letter, the greatest stake is in the label’s hands. Positively, the open letter brings to attention the changing model artists and content creators are having to deal with. It brings to attention that creator revenues have been declining even as YouTube requires creators to meet certain standards for advertisers. But from this, no clear conclusion on what can be done can be decided as the overall pool of revenues has changed from before.
As the interests of independent creators clash with those with label-backing, both parties are disappointed by their revenues. And while a platform called Patreon has allowed YouTubers to receive direct monthly patronage for their content created, according to the article, What is Patreon? And how Patreon is helping YouTubers, prominent creators relying solely on royalties have still seen declining revenues. Whether the signing of the open letter was justified is an open question, but from a Utilitarian perspective, according to A Framework for Ethical Decision Making, their request seems to disguise a request of the record companies to further their dominance controlling the content that is available on YouTube. The problem is that the size of the pie has overall been reduced, more control will not increase the price advertisers are willing to pay. Further, independent YouTube creators already in turmoil with the Content ID system will be further limited by this in the content that they are allowed to use. Thus, the goal of this open-letter appears to be unjustified, as its outcome could a much more negative result than bring positive change. Clearly a different solution for major labels is needed, but how is a whole other question. Can major labels rebuild the paradigm that music had operated before digital streaming became the standard?