The music industry has never been shy of using exaggeration as a negotiating tactic. Its deployment long precedes the mic drop as a way to shut down a debate. The manager Peter Mensch, whose roster includes Metallica and Red Hot Chili Peppers, is only the latest industry player to slam the emergency button marked “hyperbole”. “YouTube, they’re the devil,” he claimed during a recent Radio 4 documentary about the music industry. “We don’t get paid at all.”

It’s an arresting insult that deserves unpicking. It is a relatively unoriginal diss – Michael Jackson called Sony head Tommy Mottola “devilish” in 2002 during his long dispute with the label – it is also incorrect. YouTube said in late 2015 that its parent company, Google, had generated more than $3bn (£2bn) for the music industry since its launch in 2005. The point here is that YouTube does pay, but not enough for artists, managers, labels and publishers.

This formed the basis of last week’s IFPI’s global music report, which argued that after 15 years of decline the record business is only starting to recover from a “value gap” that has threatened to sink it. IFPI said that last year an estimated 900 million users of ad-supported services such as YouTube generated only $643m in royalty payments for record labels, whereas 68 million paying subscribers to services including Spotify, Apple Music and Deezer collectively generated $2bn. (Facebook, which is heavily promoting its role as a channel for music videos, currently pays no royalties.)

Subscription and ad-supported revenues in IFPI’s 2016 global music report. Photograph: IFPI

If YouTube is the devil, you have to ask: who is the angel?

YouTube responded to these criticisms by claiming that 80% of people who consume music online would never pay £10 a month for a subscription service and so the service has to be “monetised” through ads. That said, it has launched its own subscription service, YouTube Red, in the US and is expected to debut it in the UK later this year. This week it debuted the YouTube Music Foundry programme to help acts build their profile online. Some will consider these projects proof that YouTube is a good partner for the music business. Others will think it’s mere lip service, a cynical attempt to deflect attention from its low royalty rates.



The subtext of Mensch’s statement also needs to be dissected. To label someone or something the devil is to mark a dichotomy in which someone or something else must be the angel. But who? The artists? Maybe. Record labels and managers? Anyone who understands the music industry will snort with derision before picking out hundreds of examples in which the aforementioned have been far from angelic and routinely screwed over everyone in their path.

The fundamental problem here is that the music business loves to trade in absolutes and rarely deals with nuance. Its relationship with YouTube is perhaps the most nuanced in the digital world.

This war on YouTube has been brewing for years, although it is not quite like the time Mensch’s charges Metallica gunned for Napster – a move that dramatically backfired. In 2000, they tried to sue Napster when it was an unlicensed peer-to-peer file-sharing service but faced a fan backlash and were branded as both materialistic and dangerously out of touch.

‘It’ll be in the first five minutes of my obituary’ … Lars Ulrich in 2013 discussing Napster

Labels are rumoured to soon offer singles to streaming services like Spotify and Apple Music up to six weeks before they are uploaded to YouTube. Indeed, One Direction and Ellie Goulding tested this strategy last year - but it is a serious high-wire act to get this right.

While the business departments of labels might look at royalty statements from YouTube and call for a boycott, the marketing departments know that a hit on YouTube can do most of the heavy lifting for them. Psy’s Gangnam Style is an extreme example here, but most acts benefit from the buzz that YouTube can create.

Last year, I interviewed the Icelandic singer Sóley about these very issues. She said her song Pretty Face was uploaded to YouTube by a German fan in 2011 without her knowledge. When it had been played more than 2m times (it’s now at 21m plays), friends told her what was happening. From that exposure Sóley has successfully toured Germany, a country she had considered far beyond her reach. What YouTube takes away with one hand, it gives with the other.

Of course, users uploading songs to YouTube is a huge concern for the music industry. In March, the BPI trade body said it had issued 200m takedown notifications to YouTube since July 2011 on behalf of its label members. It argues that, even with YouTube’s content ID system, there is a disparity between videos being taken down and those videos staying down. In the US, there are growing calls to revise the Digital Millennium Copyright Act, enacted in 1998, to close down the safe harbour exemptions that mean a site such as YouTube is not liable for copyright infringement for videos uploaded by its users.

You might think, from all this, that YouTube is public enemy No 1 for the record business. Yet the BPI was happy to have it as an official “media partner” at the Brit awards for the last two years. Streams on YouTube, meanwhile, have counted towards the US chart since February 2013. To use a phrase popularised by Facebook’s relationship status options: “It’s complicated.”

YouTube and the music industry are locked in a marriage that is equal parts mutual dependency and mutual hatred

Why, you might wonder, doesn’t the record industry build its own YouTube? It already has in Vevo, which launched at the end of 2009 and only shows premium videos (users cannot upload videos as they do to YouTube). Proving yet again that the music industry can be its own worst enemy and oblivious to irony, YouTube’s parent company Google is a partner in Vevo (alongside Abu Dhabi Media, Universal Music Group and Sony Music Entertainment). On top of this, it has not licensed any music from Warner Music Group, so it is trying to fight YouTube with a fraction of the videos.

Perhaps part of Mensch’s attack on YouTube stems from him, and many others, in the 1980s handing the keys over to MTV before realising what a huge mistake it was. Cliff Burnstein, his long-standing management partner, has been quoted in the past saying that MTV was key in breaking Def Leppard, who they managed at the time and made them into, for a period, the biggest band in the world. MTV happily played expensive music videos but paid no broadcast royalties in the US, allowing its parent company Viacom to become one of the biggest media companies in the world. There are echoes here of what is happening with YouTube, and Mensch is understandably not keen to be bitten for a second time.

Rather than reduce everything to binary terms, as Mensch has done, we should think of YouTube and the music industry as being locked in a marriage that is equal parts mutual dependency and mutual hatred. It’s less angels and devils, more George and Mildred.