It’s been 20 years, but the music industry’s arguments about music streaming haven’t changed at all

When most people think of YouTube their first thought is usually video, but the service is increasingly a massive destination for listening to music.
In fact, in 2016, approximately 900 million users used the service to listen to music.

But the music industry isn’t entirely happy about YouTube’s dominance in the area, and would much rather people pay for more premium streaming services like Spotify and Apple Music that generate much more revenue for record labels.

To protect its reputation, YouTube recently commissioned a survey into music listening habits by law specialist RBB Economics to try and argue that it’s not cannibalising music streaming services in the way the music industry claims.

YouTube and lost sales

The top line of the survey is that ultimately, if all music were to disappear from YouTube overnight, only 15% of people would switch to higher value music streaming services.

Not surprisingly the music industry’s response to the report has been swift. The IFPI’s (the International Federation of the Phonographic Industry - a body that represents the music industries interests worldwide) response has focussed around YouTube’s refusal to pay more to license the music that it streams as a compromise rather than removing music from YouTube entirely.

The BPI’s (British Phonographic Industry - essentially the British version of the IFPI) response is slightly more puzzling with its chief executive stating that, “RBB’s report for Google confirms that a significant proportion of YouTube consumption would move to onto a higher value service if music were not available on YouTube. [Author] RBB’s data shows that nearly a fifth of YouTube usage in the UK would divert onto higher value platforms, such as paid subscription services.” (emphasis added).

That “significant proportion” that he’s referring to? The one that’s “nearly a fifth” of YouTube’s users? It’s 15%, which doesn’t seem like nearly as much when you look at the number itself.

20 years of the same arguments

If these arguments seem familiar then that’s because it’s the same drum that the music industry has been beating for years.

But the simple truth is that one track downloaded for free is not the same as a single lost sale, and not every YouTube listener will immediately subscribe to a premium music streaming service if the tracks suddenly disappear from the video platform.

It’s hard not to have at least some sympathy for the music industry over the amount of royalties YouTube gives them, especially since short of blocking their music from YouTube (which one record label is reportedly thinking of doing) it’s difficult to know exactly what they can do. In particular the report's findings suggest that, “tracks that are blocked on YouTube typically do not perform better on streaming platforms than tracks that remain available on YouTube”.

But as initiatives like YouTube Red (which removes advertising from YouTube and allows music to be played in the background - an essential feature in any music streaming app) grow in scale, YouTube increasingly needs to keep the music industry onside if it wants to convince people to pay for its service.

For now, then, it seems all music labels can do is ensure that the service offered by high-value streaming services exceeds that which YouTube is able to offer, otherwise it risks sounding like a broken record that’s been on repeat for the last 20 years.