ARIA CEO Dan Rosen speaks out on ‘value gap’, hopeful for YouTube Red

Dan Rosen, CEO of the Australian Recording Industry Association (ARIA) has joined the chorus of music industry figures expressing their dissatisfaction with YouTube’s payment model.

“Unfortunately, the revenue flowing from YouTube in its first decade has not yet been returned fairly to those who create, own and invest in the music,” Rosen said in a blog post written for Huffington Post Australiayesterday.

Rosen’s comments follow those made by the International Federation of the Phonographic Industry (IFPI) in 2015 and byRIAA (Recording Industry Association of America) Chief Cary Shermanin April. Both believe the fact YouTube is protected by the 1998 Digital Millennium Copyright Act (DMCA) is unfair.

Under the 1998 DMCA Act Google-owned YouTube can’t be held liable as a result of unlicensedcontent that its users might upload. Referred to at the ‘value gap’, its seen as the biggest halt on sustainable revenue growth for artists and labels.

As pointed out by Rosen in his post, the US recording industry made more money selling vinyl albums than it received from YouTube in 2015 (RIAA).

Rosen said last month’s launch of YouTube’s paid ad-free subscription service in Australia, YouTube Red, could be the industry’s saving grace.

“May [YouTube Red] help grow the paid subscription pie, give more money to creators, and help our best musicians, filmmakers and TV shows access global markets,” he said. “And may the first decade of YouTube Red help more of our local creative geniuses move into the black.”

Following negotiations with labels and publishers – Universal allegedly put together both an ‘on YouTube’ strategy and an ‘off YouTube’ strategyprior to its launch – YouTube Red launched alongside a dedicated YouTube Music app in May.

Featuring exclusive and original content from YouTube’s popular creators, it’s costing subscribers $11.99 per month and just like it’s ad revenue model, YouTube said “the lion’s share” of the membership fee goes to the creators.

But Australia is currently spoilt for choice when it comes to SVOD services. The 10 TV catch-up services and subscription streaming websites or apps (for movies and TV) available in Australia are: Stan, Netflix, Presto, Foxtel Play, Quickflix, 9Now, ABC iView, SBS On Demand, PLUS7 and TenPlay.

In the blog post, Rosen also addressed the positive and negative consequences of Australia’s swift uptake of streaming. He said music streaming has seen more Australian artists are breaking into global markets: “In previous decades there would be one or two Australian acts that would break every five years, but we can now see five Australian acts break in a single year.”

However Rosen said Australia’s unlimited choice and feverish consumption of streaming services is “making it harder for local acts to sustain a living on purely the domestic market.”

“So, an Australian act whose music can attract a global audience can make more money than before. But things are going to get tougher for those acts that rely solely on the domestic market,” he said.

Rosen said one way to combat the handicap presented to local artists is to ensure the music playlists on streaming’s biggest competitors feature Australian artists.

“If these playlists are programmed out of Silicon Valley and Stockholm, it will be harder for our local artists to get selected, compete and be heard. It is therefore imperative we work with the global services to localise their offerings and playlists.”