“We don’t get paid at all,” Mensch said in a new BBC Radio 4 documentary, The Pirate Ship, which examines the effects of the internet and piracy on the music industry. Mensch added: “If someone doesn’t do something about YouTube, we’re screwed. It’s over. Someone turn off the lights.”
YouTube’s current model allows musicians to make money by placing ads around their videos, but the International Federation of the Phonographic Industry’s recent annual report cited a growing “value gap” between the amount of music consumed on platforms like YouTube and SoundCloud and the amount of revenue generated for the music industry. The IFPI estimated that 900 million consumers on free upload platforms generated $634 million in 2015, while 68 million paying subscribers to various streaming services worldwide generated approximately $2 billion.
“It’s hard to make people pay for what they’ve been getting for free,” Mensch said. “That’s consumer behavior 101.” Metallica, of course, infamously fired the opening salvo against free online music when they took on Napster in 2000 and settled a year later.
YouTube’s Chief Business Officer Robert Kyncl, however, suggested that cash flow to artists from YouTube plays could also depend on their arrangements with record labels. He singled out violinist Lindsey Stirling as one example of a performer who set up her ad agreement directly with YouTube, has 7.8 million subscribers and raked in $6 million from the service last year.
“She sees all of her consumption and how much money she’s making and it’s very clear,” Kyncl said. “In other cases, maybe it’s less so. There are middle-men — whether it’s collection societies, publishers or labels — and what they do is they give advances and they want those recouped. So it’s really hard when there’s no transparency for the artist.”
Mensch and Kyncl’s comments come as YouTube and the three major labels — Sony, Warner and Universal — prepare to renegotiate their licensing agreement this year. YouTube and similar sites are also hoping to reform “safe harbor” laws, which protect them when users upload copyrighted material, so long as they remove it upon request.