[Editor Charlie sez: Cherie Hu presents a good argument for why artists and fans should demand the “user centric” royalty, or what Chris Castle calls the “Ethical Pool” approach that he’s working on.]
Fraud is applicable because there’s a tangible price tag involved in the consumption of a song: Labels and other rights owners are paid on a pro-rata basis, according to proportional volumes of on-demand streams. The average per-stream payout may not look like much — $0.004 for Spotify, slightly more for services like Apple Music and Tidal ($0.008 and $0.012, respectively), although exact rates depend on the type of artist or song….
But they can add up. A top hit like Ed Sheeran’s 2017 monster “Shape of You” would distribute millions of dollars in performance royalties to its songwriters and even more to the master-rights owner. Using Goldman Sachs’ projection that the streaming sector will hit $34 billion by 2030, millions of dollars in fraudulently acquired funds could be making their way through the royalty chain. Though unlike Twitter, which wiped out 6% of its users, the number of fake music streamers has not been determined. Says one major label head: “It’s not something we’re currently concerned about, but that’s not to say we won’t be in the future.”
“Music streaming payouts are a zero-sum game,” says another industry insider. “It is imperative that services are vigilant and sophisticated in their controls to ensure that streaming fraud doesn’t dilute payments to the artists who have rightfully earned those payments”….
Here’s how “playola” works at playlist-promotion companies like Spotlister: A customer pays the company to secure prominent placement of a song on key playlists, such as those on Spotify. When a track is uploaded, it is analyzed and its metadata is used to send it to the most appropriate playlists.
[Chris Castle says: Remember that high profile criminal payola cases were prosecuted under state law commercial bribery statutes and not only the federal anti-payola or plugola laws. Alan Freed pleaded to commercial bribery for actions which are literally nothing compared to what Spotify does every day. While the federal payola laws apply to FCC licensed radio stations, commercial bribery prohibitions are not restricted to radio–so Internet companies need to take this a lot more seriously. “Because Internet” is less of a defense every day.]
Martin Vassilev makes a good living selling fake views on YouTube videos. Working from home in Ottawa, he has sold about 15 million views so far this year, putting him on track to bring in more than $200,000, records show.
Mr. Vassilev, 32, does not provide the views himself. His website, 500Views.com, connects customers with services that offer views, likes and dislikes generated by computers, not humans. When a supplier cannot fulfill an order, Mr. Vassilev — like a modern switchboard operator — quickly connects with another.
“I can deliver an unlimited amount of views to a video,” Mr. Vassilev said in an interview. “They’ve tried to stop it for so many years, but they can’t stop it. There’s always a way around.”
After Google, more people search on YouTube than on any other site. It is the most popular platform among teenagers, according to a 2018 study by the Pew Research Center, beating out giants like Facebook and Instagram. With billions of views a day, the video site helps spur global cultural sensations, spawn careers, sell brands and promote political agendas.
As James Brindle recently posted, “Someone or something or some combination of people and things is using YouTube to systematically frighten, traumatise, and abuse children, automatically and at scale, and it forces me to question my own beliefs about the internet, at every level.”
But great news–now YouTube is delivering its dreck to 100 countries in a subscription package. Here’s a few more fish stories from Susan Wojcicki:
YouTube plans to roll out its subscription offering YouTube Red to around 100 countries this year, according to CEO Susan Wojcicki. Speaking at the Code Media conference in California, Wojcicki described Red as “really a music service,” which it now plans to expand into many more markets after agreeing music licensing deals.
The service lets users watch or listen to YouTube content ad free, offline and in the background on mobile devices. Over the past two years YouTube has also invested in around 50 original series for Red.
Wojcicki explained that while YouTube started out by working with popular YouTubers on YouTube Red originals, it is now doing more around music, drama and other shows – adding this as a complement to what it now sees as fundamentally a music-focused offering.
Asked whether YouTube needs to buy a big company like Netflix or Spotify to up its content ambitions, Wojcicki said: “I think our goal is to continue to increase what we’re doing.”
“We are building that muscle of creating content; we’ll continue to do more and more and we’ll see what’s successful, we’ll see what our users respond to, what’s driving subscriptions, what’s being watched. I think one of the really amazing things about YouTube is the platform and the data that we have.”
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[Editor Charlie sez: Just in time for the Spotify IPO…or debt rollover…Billboard is poised to visit agita on streaming boosters when it corrects the absurd equal weighting of free streams and subscription streams in its sales/airplay/streaming chart, which should also change the way some people…ahem…average the revenue value of the ad/paid streams.]
One of the biggest stories of 2017 is playing out right now, as Billboard works on a revamp of its Top 200 album chart that will give greater weight to paid streams, while ad-supported streams will be devalued. Most majors have been lobbying for just such a revenue-based revamp.
Presently, all streams are weighted equally, with 1,500 streams counted as one album. Those in the know believe the formula for paid streams will be adjusted to 1,250:1, while ad-supported streams will be devalued to 5,000:1. In other words, premium streams would have four times the weight of ad-supported. Under the existing metric, 100m streams of any kind would count as 66,667 albums, while under the new proposal, 100m ad-supported streams would count as just 20k albums, and 100m paid streams would count as 80k albums. On the other hand, albums that rely heavily on ad-supported streams for long periods of time could lose thousands of chart units.
YouTube streams will supposedly continue to be excluded from the Top 200, following vehement protests by rights holders over their possible inclusion.
[Editor Charlie sez: And Google is opposing the Stop Enabling Sex Traffickers legislation?]
Major companies have suspended advertising campaigns on YouTube after their ads were displayed with videos depicting children in threatening situations—while the tech giant investigates ‘disturbing’ autofill results that users flagged over the weekend.
The Wall Street Journal reports that Mars Inc., Adidas and Diageo, maker of spirits including Tanqueray and Captain Morgan, have suspended their advertising on YouTube.
The videos were highlighted in a BuzzFeed report that described a “vast, disturbing, and wildly popular universe of videos” that included live-action footage of children depicted in compromising situations. YouTube took down some videos and responded by saying it would do a better job of enforcing its community guidelines.
Dozens of users have also claimed that YouTube’s autofill results include phrases that promote pedophilia—for example, typing “how to have” into the search box brought up “how to have s*x with your kids.”
In a ground-breaking report, Music Canada, a national trade organization, documents the scale of harm being caused by the Value Gap – defined as the significant disparity between the value of creative content that is accessed, particularly through user upload content services like YouTube, and the revenues returned to the people and businesses who create it.
“This is the story you will not hear from Google,” says Graham Henderson, President and CEO of Music Canada. “YouTube would never have emerged as the largest music service without distorting the use of safe harbour protections in copyright law that were created to protect ‘mere conduits’ or ‘dumb pipes.’ We now know that today’s digital platforms are the smartest pipes that have ever been imagined.”
Creators and governments around the world are taking notice, and taking action. In Canada, thousands of musicians, authors, poets, visual artists, playwrights and other members of the creative class, have urged the Canadian government to address the Value Gap in a campaign called Focus On Creators.
The Value Gap: Its Origins, Impacts and a Made-in-Canada Approach is available for download at https://musiccanada.com/resources/research/the-value-gap-report/.