YouTube stars from Taylor Swift to Ed Sheeran, Beyonce and Jay-Z could be in line for big paydays after the video giant lost a crucial vote in Brussels over new copyright laws that will force it to pay billions of dollars in fees for users watching music videos.

For years the music industry has argued that YouTube exploits the lack of legal protection around music videos being viewed on its service to pay minimal amounts to artists and labels when they are viewed. The music industry has lobbied that this “value gap” between the true worth of the music videos and what YouTube decides to pay needs to be addressed with legislation.

EU votes for copyright law that would make internet a 'tool for control' Read more

On Wednesday, a crucial vote by the European parliament’s legal affairs committee went the way of the music industry with an agreement to adopt copyright laws that will force platforms such as YouTube to seek licences for music videos.

“The importance of today’s vote cannot be overstated; this proposal is a once-in-a-generation opportunity to create a new balance in the online world,” said Helen Smith, the executive chair of the European music body Impala, which represents labels behind acts including Adele, Arctic Monkeys and Franz Ferdinand. “It is about copyright and making sure creators and their partners get a fair share of the value they create.”

YouTube has an estimated 1.3 billion users who regularly watch music videos and it paid $856m (£650m) in royalties to music companies last year – an estimated 67 cents per user annually. In the UK, record labels and artists earn more than double the royalties from the sale of 4.1m vinyl records than they did from the 25bn music videos watched on YouTube last year.

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By contrast, income from the 272 million music fans who paid for ad-supported services such as Spotify, generated $5.6bn in royalties, or about $20 per user annually.

While the legal affairs committee vote marks a landmark moment – it is the lead committee on the legislation that has been the subject of vociferous lobbying by tech companies and the music industry for 18 months – it will face a further challenge before becoming law. The committee voted 15 to 10 to adopt the controversial article 13.

It is expected that a challenge will be lodged by members of the European parliament opposed to it, which will result in the entire parliament voting in July to decide whether to approve or reject Wednesday’s result. A final vote on the adoption of the overall legislation will be made later in the year.