YouTube is handing six-figure promotional budgets to artists – in exchange for a guarantee that these performers won’t publicly criticize the platform’s royalty payouts.
That’s according to a new report from Bloomberg, which says that YouTube also requires other partners to agree to these ‘non-disparagement agreements’ – including those who create shows for its paid-for YouTube Red service.
YouTube has, in recent weeks, reportedly given a handful of artists marketing budgets of around $200,000 to produce videos and take out billboard advertising campaigns.
And some of these musicians, say Bloomberg’s sources, are being asked to guarantee that they will not openly talk down the amount of cash YouTube pays out to copyright holders.
The news comes little more than 18 months after over 180 prominent artists – including Sir Paul McCartney, Taylor Swift and Beck – signed a petition criticizing the ‘safe harbor’ provisions found in the US Digital Millennium Copyright Act (DMCA), which allow platforms such as YouTube protection from legal liability for copyright infringement taking place on its platform.
Relations between the major record industry and YouTube have arguably improved a little since then, following the hiring of Lyor Cohen as YouTube’s Global Head of Music in December 2016.
In the same month, YouTube’s Chief Business Officer Robert Kyncl claimed that the platform had paid music rights-holders $1bn in ad revenue over the previous 12 months.
And in August last year, Lyor Cohen claimed that, in the US, YouTube was paying out more as a per-stream average than other ‘free’ services (namely: Spotify’s free tier) – a statement which was vocally challenged by the likes of the RIAA and, most stridently, by Irving Azoff.
Regardless, 2017 proved to be a landmark year for YouTube’s relationship with the major labels.
Warner Music Group signed a new global licensing deal with YouTube in May, while Universal Music Group and Sony Music Entertainment both completed fresh agreements with the service at the end of the year.
However, industry frustration is certainly still prevalent over the so-called ‘Value Gap’ – the perceived gulf between the amount of money paid out by YouTube versus the amount of music listening taking place on its platform.
YouTube is expected to take a fresh run at challenging the likes of Spotify and Apple Music in the coming months, with the launch of a new music-focused streaming service currently codenamed ‘Remix’.Music Business Worldwide