Last week, the UK music industry revealed that artists earned more from the vinyl sales in 2016 than payments from YouTube generated from music video views. BPI, the record label’s association that promotes British music said that this is the perfect example of YouTube’s exploitation of the value gap between what it earns from online advertising shown alongside the music videos and the money that makes its way into the artist’s pockets.
To add insult to the injury, it was reported that Google and its subsidiary YouTube gained the lion’s share of the £10 billion online advertising spend in the UK last year. According to figures from BPI, UK vinyl sales grew for the 9th consecutive year in 2016 to a 25-year high of 3.2 million units driven by David Bowie’s last album Blackstar. In contrast, music video streaming that is dominated by YouTube generated only £25.5 million for the industry.
Allen Kovac who has been managing bands that include the Bee Gees, Motley Crue and Blondie said the Google drives audiences to YouTube that devalues the music of artists. Is it the right thing to pay only one-seventh of the rates that other music streaming services pay? While it is a win-win situation for Google and YouTube, the artists become the biggest losers.
Last December, YouTube said that it paid more than £1 billion globally to the music industry from the advertising of brands alongside the music videos. YouTube claimed that the money was only generated from light users that do not actually subscribe to paid services. This is money that labels and artists will not benefit from because it is generated from advertisements.
YouTube said that it is cooperating with the music industry so that artists, labels and publishers will earn more money. However, IFPI, the global recording industry body claimed that with the 800 million users, YouTube is only paying a little more than $1 per user per year.
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