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Time to Think in New Ways of Distributing Music?

Danish Artists Are No Longer Welcome on YouTube?

On the 30th of June Google declared that they would remove all music by Danish artists from YouTube. The drastic decision was due to failed negotiations with the Danish non-profit organization Koda, which is the responsible entity for managing and collecting songwriters’ and composers’ royalty fees in Denmark.

The negotiations with Google concerned a new common-Nordic agreement about the use of Norwegian, Finnish, and Danish composers’ and song writer’s music on Youtube, which were supposed to replace the respective countries’ national agreements. The Danish agreement with Google expired in April. As a condition for a new temporary agreement, Google demanded that the commissions composers and songwriters receive for YouTube’s use of their music is reduced with nearly 70 %.[1] It is worth keeping in mind that musicians are already hopelessly underpaid by YouTube as it is.[2] Michael Dugher, CEO of UK Music, revealed in 2018 that YouTube paid creators 0.00054 GPB per stream.[3] This means a track streamed one million times would earn the artist around 540 GBP (601 EUR or 710 USD).[4]

As a response to Googles rather outrageous demand and sudden de-platforming of music by Danish artists, the managing director of Koda, Gorm Arildsen, says[5]:

It is no secret, that our members through many years have been strongly discontented with the level of payment on YouTube. And it is not a secret either that we at Koda have been active advocates for an adjustment of the tech-giants freeriding and underpayment of artistic content in connection with EU’s Copyright Directive. That Google now demands the payment to be reduced with nearly 70 % in a temporary agreement on extension, seems almost bizarre.”

Director of YouTube Music in Europe, Dan Chalmers, explains Google’s action to the Danish National News[6]:

Koda is asking for significantly more than what we pay our partners around the world, and we do not believe that it is fair to our other partners and content creators (..) Without a license, we are not capable of making content available in Denmark. But our door is open to continue the dialogue and bring the musical content back to YouTube.”

A lot of interesting legal questions arise in the wake of the controversy, especially in regards to the EU Copyright Directive. A broader, more general, and more political issue concerns the apparent and unapologetic lack of respect for artistic expression, which is pronounced in today’s music industry.Time to Think in New Ways of Distributing Music.

YouTube is an online video-sharing platform that cannot be completely equated with a streaming platform like Spotify. The main difference being that music and music videos can be accessed freely by users on YouTube. Additionally, a streaming platform such as Spotify sort out copyrights with the record labels, while the music on YouTube in some cases are uploaded by users with no legal entitlement to distribute it. However, it is commonly known that the commission artists receive from the streaming services in 99.9 % of the cases barely cover a struggling artist’s electricity bill. The calculations of the actual pay-out the artists receive are rather complex. For an in-depth explanation of the topic, I recommend reading Dmitry Pastukhov’s article on SoundCharts Blog: https://soundcharts.com/blog/music-streaming-rates-payouts.

From CDs to Blockchain Technology

I recall when I collected CDs as a kid. What I liked about my CD collection was the sense of ownership I had over the music. I had made a transaction with the artist/record label and it felt as if I then owned a small stock in their creative output. By buying CDs, I supported the artist (and record label) by investing in a physical manifestation of their work. Back then, the music industry applied a user-centric business model, where I as a consumer was in focus.

When I browse through my Spotify Library or click through the recommendations on YouTube nowadays, I do (of course) not have a similar sense of ownership. The streaming platform owns the music now. If YouTube/Spotify and other streaming services decide to remove the music from their digital platforms, there is no longer any clear link between the artist and the market. The business-model applied today in the music industry is platform-centric.Time to Think in New Ways of Distributing Music

In the view of technological development over the last couple of years, I do not suggest that we go back in time and revive CDs from the antique stores, rubbish dumps, and cardboard boxes in suburban areas. Now that the streaming platforms have made their entrance into the market with all the new benefits they provide to the consumers, there is no way of going back in time. However, something clearly needs to change. YouTube’s decision to de-platform Danish music from their platform with the snap of a finger, clearly demonstrates how highly they regard musicians creative work apart from revenue streams. They simply do not care.

In an interview from 2015 the Grammy-winning composer and musician, Imogen Heap, expressed her concerns about the music industry[7]:

It’s so fragmented; there’s so little leadership, and there’s so much negativity around the business side of it (..)It’s all upside down. The artists are at the end of the food chain. It just doesn’t make sense. Music is everywhere, all the time. It’s on our phones, it’s in our taxis, it’s everywhere. But the artists are getting less and less.

Imogen Heap’s statement seems to carry even more weight in 2020 than in 2015. The large streaming platforms increasingly reap the rewards of the musician’s creative effort without compensating the rightful creators adequately. And not much can be done about it from the artists perspective. In the words of David Byrne from the band “Talking Heads”, it seems as if “the internet will suck the creative content out of the world until nothing is left.” [8]

How can the property rights of music be placed into the hands of the musicians? One solution may be new streaming platforms based on blockchain technology. Such platforms combined with smart contracts, have the potential to cut-out the middlemen, and instead put the intellectual property rights and the “major piece of the pie” in terms of revenue into the hands of the creators. The music industry would no longer be user-centric as was the case with CDs, not platform-centric as the music industry is now, but artist-centric, where the artists are put in focus and can make a decent revenue and be in control of their work.Time to Think in New Ways of Distributing Music.

In my next post, I will explore current issues of the music industry, how blockchain technology can potentially solve these issues, and also take a look at existing challenges in implementing the new technologies. Stay tuned.

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[1] Translation of Koda’s Danish press release -> https://www.koda.dk/om-koda/nyheder/google-fjerner-al-dansk-musik-fra-youtube (opened 31-07-2020).

[2] https://www.musicbusinessworldwide.com/youtube-are-under-paying-exploiting-creators-and-getting-away-with-it/ (opened 31-07-2020).

[3] https://www.psneurope.com/business/uk-music-ceo-investigates-big-tech (opened 31-07-2020).

[4] https://www.ebuyer.com/blog/2018/09/youtube-royalties-hit-a-bum-note-with-uk-musicians/ (opened 31-07-2020).

[5] Translation of Koda’s Danish press release -> https://www.koda.dk/om-koda/nyheder/google-fjerner-al-dansk-musik-fra-youtube (opened 31-07-2020).

[6] Translation from Danish: https://www.dr.dk/musik/google-og-koda-kan-ikke-finde-melodien-loerdag-kan-al-dansk-musik-forsvinde-fra-youtube (opened 31-07-2020).

[7] Don Tapscott & Alex Tapscott (2016), Blockchain revolution: How the technology behind Bitcoin is changing money, business, and the world. Toronto: Portfolio/Penguin, pg. 226.

[8] Ibid. pg. 227.

Time to Think in New Ways of Distributing Music.

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