RIAA Rips Apart Lyor Cohen’s Claims About YouTube’s Payments to Music Creators

The fight between RIAA and YouTube has just got a little more intense.

Yesterday, Lyor Cohen, the global head of music at YouTube, posted a blog about YouTube’s relationship with the music industry and how it’s trying to help grow the revenue numbers. As we know, YouTube has long been a target for the music industry due to what it considers the platform’s low royalty payments to music creators which includes musicians, artists, songwriters and producers. It has been proven time and again that YouTube has one of the lowest payment rates out of all subscription services.

Lyor also mentioned that with YouTube Music and Google Play merging, the situation is further going to improve and will grow more globally. “For instance, critics complain YouTube isn’t paying enough money for ad-supported streams compared to Spotify or Pandora. I was one of them! Then I got here and looked at the numbers myself. At over $3 per thousand streams in the U.S., YouTube is paying out more than other ad supported services,” said Lyor in his encouraging post.

But RIAA isn’t buying it at all. In a direct response to Lyor, Recording Industry Association of America’s Cary Sherman has countered Lyor’s point about the payments part to start with. “YouTube pays music creators far less than those services on both a per-stream and per-user basis, and nowhere near the $3 per thousand streams in the U.S. that Lyor claims. Last year’s actual payout per 1,000 streams was closer to half that amount, according to industry data and Nielsen and BuzzAngle estimates, and seven times less than Spotify, which also is both an ad-supported and subscription service,” wrote Sherman on his blog, supported by the graph posted below.

While he says that “Lyor’s heart may be in the right place,” Sherman asserts that “the numbers and YouTube’s actions tell a different story.”

He further disputes Cohen’s blog post, particularly the point about safe harbor: “YouTube is the world’s biggest on-demand music service, with more than 1.5 billion logged-in monthly users. But it exploits a ‘safe harbor’ in the law that was never intended for it, to avoid paying music creators fairly. This not only hurts musicians, it also jeopardizes music’s fragile recovery and gives YouTube an unfair competitive advantage that harms the digital marketplace and innovation. Lyor claims the focus on this safe harbor is ‘a distraction,’ but it’s YouTube that seems obsessed with this legal pretext, probably because it’s the safe harbor that enables YouTube to drive down payments to creators, inappropriately. The safe harbor was intended to protect passive Internet platforms with no knowledge of what its users are doing, not active music distributors like YouTube.”

RIAA also asserts that the video streaming giant under-reports its streams and constantly disputes rights holders’ claims about figures by never revealing the actual subscription numbers. “YouTube likes to talk a good game, but it won’t even make public its subscriber figures, and continues to underreport the number of music streams played on its service, let alone substantiate any of its many different claims about payments to music creators. In fact, every time they’re challenged on this point, Google and YouTube simply change their claims yet again.”