Exploration Weekly - YT Paid Out $4B to Music Biz / Music Pubs Hit Twitch With DMCA Takedown Notices / Congress Questions Spotify’s “Discovery Mode”

“Our biological rhythms are the symphony of the cosmos, music embedded deep within us to which we dance, even when we can't name the tune.”

Deepak Chopra

YouTube’s head of music Lyor Cohen announced in a recent blog post that the company paid out more than $4 billion in royalties to artists, songwriters, and rights-holders over the past twelve months. He also added that it added more paid members to its streaming service in Q1 2021 than in any other quarter since launch.

Live streaming platform Twitch was hit with new copyright infringement claims from music publishers last week over the use of copyrighted music played in the background of recorded VODs (on-demand videos). The company stated that it believes that music publishers used automated tools to identify the copyrighted music in its users’ clips, and says it expects there will likely be more DMCA takedown notices on the way.

The House Judiciary Committee is requesting more information regarding Spotify’s new feature “Discovery Mode,” which lets artists and labels agree to take a lower royalty rate on certain tracks in exchange for higher priority in its algorithms. In a letter to Spotify founder and CEO Daniel Ek, Rep. Jerry Nadler and Rep. Hank Johnson, Jr. expressed their concerns that the program could lead to lower pay for artists and fewer choices for consumers.

In this newsletter:

YouTube Says It Paid Out $4 Billion to Music Industry Over Past 12 Months
Twitch “Disappointed” With Music Publishing Industry As It’s Hit With 1,000 Copyright Infringement Claims
Spotify’s “Discovery Mode” Being Probed by House Judiciary Committee
Apple’s 2020 App Store Billings Grew by 24% to $643 Billion
European Commission to Review TikTok’s Consumer Policies

Now, the details...
Compiled by Heidi Seo

Exploration Weekly - June 4, 2021

YouTube Says It Paid Out $4 Billion to Music Industry Over Past 12 Months

YouTube paid out more than $4 billion in royalties to artists, songwriters, and rights-holders, according to a new blog post from the streaming giant’s global head of music Lyor Cohen. He continued by saying, “YouTube has paid over $4 billion to the music industry in the last 12 months alone and has added more paid members in Q1 ’21 than in any other quarter since launch.” He also added that the money was derived from ads and premium subscriptions, and that more than 30% of that $4 billion came from user-generated content. The blog post explained that YouTube’s aim is “to become the leading revenue generator for the music industry”. Spotify co-founder and CEO Daniel Ek announced that his company paid out over $5 billion to the music industry in 2020. “We’re continuing to innovate with direct-to-fan products such as ticketing, merch, memberships, paid digital goods, and virtual ticketed events,” he wrote.

Twitch “Disappointed” With Music Publishing Industry As It’s Hit With 1,000 Copyright Infringement Claims

Amazon-owned live streaming platform Twitch told its users on May 28 that it’s been sent a “batch” of new copyright infringement claims from music publishers. The company sent out an email stating that these new DMCA takedown notifications include “about 1,000 individual claims” over the use of copyrighted music played in the background of recorded VODs (on-demand videos). In the email sent to users on Friday, shared by journalist Rod Breslau on Twitter, Twitch stated that “this is our first such contact from the music publishing industry”. Twitch states that it believes that music publishers used automated tools to identify the copyrighted music in its users’ clips, and says it expects there will likely be more takedown notices on the way. This new round of DMCA takedown requests follows news from October that “thousands” of videos had been deleted by Twitch over infringement notices. Then, in March, the site added tools to make it easier for users to manage takedown requests and delete clips to avoid strikes against their channels.

Spotify’s “Discovery Mode” Being Probed by House Judiciary Committee

A new feature Spotify is testing out in a pilot program has caught Congress’ attention. Discovery Mode, which was first announced in the fall, lets artists and labels agree to take a lower royalty rate on certain tracks in exchange for higher priority in its algorithms. Spotify’s Nov. 2 announcement described its personalized recommendations as “complicated,” and said it wanted to find a way to account for an artist’s priorities while also ensuring listeners are getting what they want. House Judiciary Committee Chairman Rep. Jerry Nadler (D-NY) and Subcommittee on Courts, Intellectual Property, and the Internet Chairman Rep. Hank Johnson Jr. (D-GA) are concerned the program could lead to lower pay for artists and fewer choices for consumers. On Wednesday, they sent a letter to Spotify Founder and CEO Daniel Ek requesting more information on the feature. “This may set in motion a ‘race to the bottom’ in which artists and labels feel compelled to accept lower royalties as a necessary way to break through an extremely crowded and competitive music environment,” states the letter. Spotify, which has not yet responded to a request for comment, has been instructed to answer their questions by June 16.

Apple’s 2020 App Store Billings Grew by 24% to $643 Billion

Apple says that its App Store ecosystem “facilitated $643 billion in billings and sales during 2020, a 24 percent year-over-year increase”. So, this is not just purchases of apps and in-app purchases, but also the money generated by apps selling other kinds of products and services, from groceries to taxis. Apple’s report claims that 90% of total billings and sales “occurred outside of the App Store”, while also noting that ‘small’ firms (defined as those with fewer than 1m downloads and less than $1m of annual revenues) are 90% of its App Store developers. On the same day the report was published, the European Consumer Organisation (BEUC) lobby group joined the EC’s music-streaming antitrust case against Apple as an ‘interested third party’, saying it wants to “ensure that Europe’s consumers have access to a full range of music streaming services without their choices being unfairly restricted or prices being artificially inflated”.

European Commission to Review TikTok’s Consumer Policies

The European Commission announced that it recently had “a formal dialogue” with ByteDance’s social app TikTok to “review its commercial practices and policy”. This is focusing on consumer rights: “Areas of specific concern include hidden marketing, aggressive advertising techniques targeted at children, and certain contractual terms in TikTok’s policies that could be considered misleading and confusing for consumers,” as the EC’s announcement explained. The “formal dialogue” process gives TikTok a month to “reply and engage” with the Commission and its network of consumer protection authorities.

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