This streaming war could bring YouTube and Spotify to their knees

Apr 30, 2014
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This streaming war could bring YouTube and Spotify to their knees

YouTube, Spotify, and other streaming music providers like Pandora are reportedly facing a potential revolt from songwriters, angry at the meager slice of the royalty pie they receive, and threatening to veto tracks being included in some regions. Publishers - representing songwriters - have long had smaller rewards from streaming licensing compared to record labels, for instance making around 12x less from playback through Pandora, with chatter of a push-back brewing.

"When you have nothing to lose, you have everything to gain," one unnamed publisher told The Guardian. "What we get paid by these streaming services is so insignificant that losing it won't make a difference."

That could affect European services first of all, with songwriters able to prevent their music from being included in streaming providers' catalogs. Spotify, YouTube, and others might find themselves with a significantly smaller range of tracks to offer, if publishers collectively pull the plug.

The risk in the US is less dramatic, with different rules around licensing permissions effectively meaning that songwriters can't refuse to allow their tracks to be offered.

Nonetheless, with profits in the streaming business still scarce, any disruption in one region could have a significant impact across the board.

Although negotiations between services such as Spotify and Beats Music, and record labels, have been fierce, publishers have to some extent been the forgotten party. On YouTube, it's suggested, a record label could make anything up to $4,000 for a popular song getting 1m plays; in contrast, the song's writer would only get around $90 for the same degree of playback.

The goal, songwriters insist, is a more equitable split from their perspective, rather than undermining services themselves.

SOURCE The Guardian


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