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‘YouTube pays creators just £0.00054p per stream’: UK Music CEO talks big tech in music biz

Here, Michael Dugher reveals why he believes tech giants need to be held to account in order to ensure a ‘fairer future’ for the music business

Michael Dugher
Michael Dugher

For several years now, the music industry has been at war with YouTube over the royalties – or lack thereof – that it pays music creators.

Does Google pay enough tax? Is enough being done by tech giants to protect our data and our democracy? Are social media companies doing all they can to tackle terrorism or online bullying? Can the boss of Facebook really refuse to answer questions from MPs? How much screen-time should our children have before bedtime? Questions about our relationship with the internet and technology are never out of the spotlight. Essentially, this is a debate about getting the balance right. It’s about how we harness the enormous benefits and the huge opportunities that technology brings, whilst ensuring that proper protections and safeguards are in place for the negatives.

In the first industrial revolution, at some point people said: “It’s great we have a coal industry. But you know what? It’s not OK to send kids down the mines”. Eventually change came.

Today, after years in which a free, unfettered internet was allowed to run riot without any restrictions, people and governments around the world are now saying that it’s time for large global technology firms to recognise they have social responsibilities, as well as multi-billion dollar rewards.

This debate about the behaviour of big tech is every bit as relevant for the music industry. In recent months, as the Copyright Directive was debated endlessly in Europe, creators and rights holders have been slogging it out with Google’s YouTube.

But when we accuse YouTube of ripping-off creators, that doesn’t mean we’re ‘anti-big tech’. We’re not latter-day Luddites and we’re not seeking to live in the past. We just want the future to be fairer, to protect the long-term sustainability of a music industry that brings enjoyment to millions and contributes £4.5 billion to the UK economy.

But let’s be clear about this: the music industry is not anti-big tech; it’s anti-bad tech. Astonishing developments in technology have meant aspiring artists can create and record the sound of a whole orchestra from a laptop in their bedroom, and then have their music and videos streamed across the world to reach previously undreamt-of audiences.

In the music industry, we have productive relationships with companies like Spotify and Apple Music. Global industry revenues for these paid services amount to £4.7 billion, meaning streaming is now the largest single source of recorded music industry revenue. UK artist Ed Sheeran’s song ‘Shape Of You’ is the most streamed track of all time on Spotify.

But, as Labour’s shadow culture secretary, Tom Watson, pointed out in a speech he gave on big tech and its responsibilities in February, there are problems too. Using UK Music figures, he highlighted what he called the way some platforms “cater to the business interests of the few at the expense of the many”. He went on to say: “Just look at how YouTube profits from musicians’ work without fair remuneration. YouTube pays creators just £0.00054p per stream.”

YouTube is now one of the main ways people listen to music. It accounts for 84 per cent of all video streaming services with 85 percent of visitors regularly coming to the site for music.

However, at present, a song needs to be streamed on YouTube 14,500 times before a creator can earn the equivalent of just one hour on the National Living Wage for a 25-year-old. How can we encourage kids from all backgrounds to become singer/songwriters or performing artists if they would be better off working at Sports Direct?

Tom Watson was also right when he put the spotlight on Google for the amount it was spending on Brussels lobbyists to undermine “simple copyright reforms” that would benefit many creators in the music industry. YouTube exploits legal loopholes, which enables it to pay creators a tiny amount in royalties and rates that are way below that of other digital music services. These loopholes are a result of so-called ‘safe harbours’ created long before something like YouTube could even be imagined. That’s why we need copyright changes to close those loopholes.

YouTube and its allies spent a fortune running scare stories about the impact of copyright changes. Contrary to what has been dramatically predicted by YouTube, copyright protections will not mean the “death of the internet”. Neither will it spell the end of memes and mash-ups. Those are just myths spread as part of a desperate attempt by certain tech companies to keep the vast majority of money they make out of the creative content of others.

Ultimately, tech giants must not allow their services to be used to subvert democracy, to spread online abuse or to cheat music creators out of their deserved rewards. I am certain that Margot James, the government’s minister for Digital and the Creative Industries, gets this. So too does the Conservative chair of the cross-party DCMS Select Committee, who has been trying to hold the Facebook CEO to account.

In an era when politicians from all parties seem divided on almost every issue facing the country, the need for big tech to face up to its responsibilities would appear to be a refreshing source of political consensus. Legislation, a new regulator, is all on the way.

Once they were the great change-makers, empowering people, bringing innovation and forging a brave new world. Today it is the likes of Google that are swimming against the tide of history. Our rapidly evolving relationship with them – in the music industry and in every other part of our lives – is turning into one of the defining battles of our times. In a song that has been streamed more than 53 million times, somebody once sang, “a change is gonna come.”