Transfer of Value: Why is it a problem?

Get tuned in on one of the biggest challenges of the music industry in 2018. 
The lack of righteous payment on dominant and popular streaming providers such as YouTube and Facebook.

 

The essential problem

Today, the creators of music gets none or very little payment, when their music is streamed from big online providers such as YouTube and Facebook.

The lack of righteous payment is not only an issue for the individual composer. It's a problem for the musical ecosystem as a whole. A problem, which in time will effect the variety of music available to the consumer. The musical ecosystem depends on the copyright income; and the creators, who invest valuable time and resources in creating new music, are dependant on a fair payment for access to their works.
At the same time it harmes the streaming providers who do pay, like Spotify and Yousee Music, when they have to compete with providers, who do not pay for the music their businesses rely on.


Transfer of Value and Value Gap

The terms 'Transfer of Value', and 'Value Gap' describes the mismatch between the significant income generated on musical distribution on e.g. YouTube and Facebook, and the sparce payment that is sent to the creators of the content.

Why is someone paying more than others?

Outdated legislation from 2001, is the main reason streaming providers, such as YouTube and Facebook, are paying way less than other providers. The specific legislation is called 'Safe Harbour' and was originally intented to protect Web Hosting Operators, in order to promote investments in the early online market. Today that same legislation is misused by some of the major distributors that argue, they only provide a passive platform for the users, and that they are therefore not obligated to pay for use of the content.
However, they do indeed arrange, aggregate, recommend, promote and monetise content the same way as the subscription based providers.


But YouTube do pay?

Yes, YouTube pays, but the amount is significantly lower than their competitors, the subscribtion based providers. And as long as the EU-regulation are unchanged, fair payment is very difficult to argue.
Some online providers, such as Facebook, refuses to pay anything at all for music made available on their platform.

 

How can the unfair regulation be solved?

By reforming EU's copyright-rules so it clearly states that online providers, that proactively distributes and makes music accessible to the public, has to pay fairly for the use of the music just as everybody else. Together with our European sister-companies, Koda has been fighting for a change in regulation for the last couple of years, with the aim to precisely stating common rules for everybody, through transparant and fair legislation.

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