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Recording Industry Claims Imaginary Value Gap As A Bigger Threat Than Piracy

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Recording Industry Claims Imaginary Value Gap As A Bigger Threat Than Piracy

Postby sunnyd » Thu May 18, 2017 3:07 pm

Story :

One of the most significant events that took place at this month's meeting of the World Intellectual Property Organization (WIPO), that EFF attended, wasn't part of the meeting's formal agenda. It came at a side-meeting organized by the International Federation of the Phonographic Industry (IFPI), an affiliate of the Recording Industry Association of America (RIAA). At that meeting, IFPI panelist David Price made the startling admission that copyright infringement is no longer the recording industry's biggest concern.

Apparently, the industry's biggest concern is no longer those who distribute music illegally for free. It's platforms like YouTube that do pay copyright holders, but don't pay enough. According to the IFPI, YouTube's reliance on the U.S. DMCA and Europe's E-Commerce Directive to allow it to host user-uploaded music videos has created a "value gap" that deprives the recording industry of royalties they believe should be theirs. The sudden elevation of this supposed "value gap" above the bugaboo of piracy is all the more surprising because term didn't even exist until about 2016, when it was created out of whole cloth as a device to explain why copyright holders should be entitled to a larger slice of Internet platform revenues.

Interestingly, Price and his co-panelists at the WIPO event admitted that there ought to be free music services for those who don't wish to pay. Currently, YouTube provides this free service for millions of users around the world. It pays royalties to copyright holders for doing so, even for user-uploaded content, where the copyright owner can be identified using ContentID fingerprint matching. (The law doesn't require YouTube to do this, although plans are afoot in Europe to change this.) ContentID has serious problems, including imposing advertising and monetization on critical videos that are clear fair uses, against the wishes of video creators. But in the right circumstances, it also provides an important revenue stream for recording artists.

The record labels' contention is that YouTube streaming depresses the rates that subscription-based music streaming services, such as Spotify, are willing to pay for streaming licenses. That's an interesting theory, but research released by Google casts significant doubt on it. At least according to the Google-sponsored research, YouTube actually diverts users not from other paid services, but from infringement. Were YouTube to go away, 85% of views would simply disappear, or would move to lower-value alternatives such as illegal file sharing.

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