Thursday, January 17, 2019

YouTube recently revealed that the global streaming giant has paid out over $1.8bn in advertising revenues to music rights holders in the last 12 months ending Q3 September, 2018. More than $6bn in payments were directed to the music industry, $3bn of that coming from Content ID, the technology YouTube uses to monetized the play of music in their massive catalogue of user-uploaded videos. Although strong numbers by volume, it has been widely reported that YouTube pays $0.00074 per stream on average compared to Spotify's fluctuating per stream rate that has been varying over the last 3 years between $0.00375 – $0.0039. Other competitive platforms are paying higher per stream rates and the competition is heating up.

However, darker clouds could be on the horizon for every streaming platform as data privacy debates rage on overseas about the European Copyright Directive and why are so many people, around the world, are opposing it.

YouTube’s Global Head of Music, Lyor Cohen has called the European Copyright Directive Article 13 into question warning industry players of what he calls a serious danger over the passage of the newly-proposed, European Copyright Directive, that includes a highly controversial provision named, Article 13. Article 13, if fully approved, could lead to the possibility of streaming platforms potentially becoming legally liable for copyright-infringement for any and all content uploaded by the platform's users/subscribers.

Article 13 would require every online platform across the internet that does business or has fans in any of the 28 EU (European Union) countries, to track and prevent the uploading of copyrighted content. They may also be required to demand licenses to be purchased by subscribers in order for them to post any affected content. The regulatory implications could have unintended consequences for large platforms such as Facebook®, Instagram®, Tumblr®, GitHub®, Reddit® and potentially devastating consequences for smaller platforms around the globe. YouTube® and Google® have already developed the technology to meet the requirements, called Content ID, that is designed to protect against copyright-infringement. However, the feasibility of global adoption of such expensive technology will undoubtedly be daunting.

GDPR has other articles of concern to the digital media industries. European Copyright Directive Article 11, is also causing controversy. This proposed article stipulates that companies like Google®, Microsoft®, Twitter® and Facebook® may have to pay publishers for showing snippets of news articles. The implications of the rule could have a chilling effect on the entire digital landscape calling for platforms that are unable or unwilling to pay licensing fees to shut down or stop users from sharing links with snippets. The consequences could prevent social media platforms from showing any kind of snippet of news stories, ultimately suppressing the sharing and linking to content.

In other words, content aggregation will be only be available to the platforms capable of paying for it. In April, 2018, Apple® CEO Tim Cook proposed a U.S. version of GDPR should be implemented in comments he made at the 40th International Conference of Data Protection and Privacy Data Conference in Belgium. Apparently, debate over the controversial directive has intensified. On January 18, 2019, the directive's scheduled approval meeting was cancelled due to opposition from EU members including Germany, Belgium, the Netherlands, Finland, Slovenia, Italy, Poland, Sweden Croatia, Luxembourg and Portugal. The matter intensified even further on January 21, 2019, when France fined Google nearly $57 million dollars for the first major violations of the new European GDPR privacy directive, stating Google failed to fully disclose to users how their personal information is collected and did not properly obtain users' consent for the purpose of showing them personalized ads. With the prospect of other U.S. technology companies facing similar enforcement, the debate will surely rage on.

Written by Staff

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